Pesek on Asia: Auditing Abenomics
Good morning. Here's my take on some of the stories driving the debate in politics, finance and social issues across Asia today.
A timely Abenomics audit.
Financial Times columnist David Pilling offers a timely reality check on Prime Minister Shinzo Abe's efforts to end Japan's deflation 15 months on. The report card? Rather mixed. Pilling starts out from the premise that Abenomics has been a qualified success in general, but explores what needs to be done to produce the vibrant, self-sustaining recovery that eluded Japan for 20 years. To him, it all comes down to the effects of next month's sales tax hike -- from 5 percent to 8 percent -- and whether companies raise wages. While both remain imponderables, my own worry is that Abe's window to force deregulation through a change-resistant parliament is closing fast.
The Philippine peso mystery.
Smuggling is rarely the first place one looks when figuring out why the currency of an investment-grade nation is sliding. Unless, of course, we're talking about the Philippines. In recent reports, analysts at Deutsche Bank and Credit Suisse Group explore how understated import data since as early 2007 are sapping the strength of the current-account surplus and the peso. As I pointed out in a March 3 column, think tank Global Financial Integrity reckons that since 1990, smuggling has cost Filipino taxpayers at least $23 billion (almost 10 percent of today's annual economic output). The peso's weakness bears that figure out and should be a wakeup call to President Benigno Aquino, telling him that he needs to intensify his crackdown on the Bureau of Customs.
Why China won't save Hollywood.
The most populous nation would appear to be a dream come true for Tinseltown. China, after all, is the first overseas market to exceed $3 billion in ticket sales. But like many film scripts, looks can be deceiving. While piracy is one barrier, this Quartz News item explores the myriad difficulties the West is encountering in selling its productions amid regulatory and cultural barriers. A happy ending for Hollywood? Perhaps not as lucrative a finale as many movie moguls hoped.
Money can't buy you good infrastructure .
In Sydney last month, the Group of 20 nations turned to the oh-so-boring topic of infrastructure. All economists understand the importance good roads, bridges, ports and power grids in helping nations such as Indonesia and India thrive. Far less known is the best means of financing a process pivotal to reducing poverty. Then again, perhaps money isn't really the problem -- execution is. In this Project Syndicate Op-Ed, World Bank Managing Director Bertrand Badré argues that even more important than money is "ensuring appropriate governance, predictable pricing structures, and a credible regulatory environment."
What bad ergonomics costs Singapore.
Singapore's government is typically concerned about its global posture in very dynamic economic times. A new report from the Workplace Safety and Health Council suggests the government should start worrying about the bad-chair kind, too. Turns out, stiff necks and numb wrists cost the island of 5 million people a whopping $3.5 billion a year. That's a number that won't sit well with government bean counters when the medical bills roll in.
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