Pesek on Asia: Australia's Fake Crisis
Good morning. Here's my take on some of the stories driving the debate in politics, finance and social issues across Asia today:
Joe Hockey hypes fake Australian crisis.
"Minister for Gloom." That's what Sydney Morning Herald editor Michael Pascoe calls Treasurer Joe Hockey as he tries to scare Australians to death. In a world facing genuine doom and gloom, Australia has thankfully been spared. the country has avoided a recession for over two decades, it's growing at 2.8 percent and gross national debt is just 28.8 percent of gross domestic product (a fraction of America's 105 percent ratio and Japan's 243 percent). Yet Hockey says a crisis is brewing, taking a disingenuous page from the Tea Party's playbook in the U.S. This supposed catastrophe is being manufactured to give Prime Minister Tony Abbott political cover to slash welfare spending. If there really were a budget emergency, why not rein in corporate welfare, like fuel-tax rebates for miners, instead? Hockey's gloomy outlook is really just a shameless ploy to trim spending at the expense of society's weakest links.
Three questions hovering over Alibaba 's IPO.
As the investment world holds its breath for the biggest initial public offering since Facebook, loads of questions are filling the void. One, of course, is how the Chinese e-commerce giant paints itself -- as an eBay/Amazon/PayPal mashup, or something else? This Quartz piece raises three more questions investors should be asking. One, will founder Jack Ma's approach to corporate governance irk Wall Street? Two, can Alibaba police its platforms to clamp down on fraudsters? Three, will Ma's need to kowtow to the Communist Party hurt profitability? We are months, or years, away from truly knowing the answers. All we know for sure is that some caution is warranted amid the euphoria.
Loss of Afghan family tells economic tale.
"I'm broken." What an incredible understatement by Mohammad Hassan, a man who last week watched in horror as part of a mountain collapsed onto his northern Afghan village -- burying his wife, seven sons and farmland. He even lost his donkeys in a May 2 mudslide that left 2,000 people missing and destroyed a third of Ab-e-Barik village in Badakhshan province. Along with chronicling Hassan's heartache, Eltaf Najafizada, my Kabul-based Bloomberg colleague, shows how this tragedy also tells an economic story. "The high death toll," he writes, "shows the development gap in a nation preparing for its first leadership transition since the Taliban were ousted in 2001. Little relief is in sight for residents of one of the most destitute provinces of Asia's poorest country, which spends nearly half of its national budget on security after 13 years of war."
Saying " drill, baby, drill " in Chinese.
China appears to have settled on a strategy to get its way in territorial disputes in Asia, particularly at energy-rich sites: just show up with a giant ship and start drilling. Vietnam is howling with anger now that Beijing has done just that, moving a $1 billion-plus oil rig into contested waters and catching Hanoi flatfooted. The gambit will force leaders and military tacticians in Manila, Taipei and Tokyo to confront the question of how they'd respond if a Chinese rig suddenly appeared off their shores. At the very least, it's time to learn how to say "drill, baby, drill" in Mandarin.
A leg-up for Barack Obama 's Asia pivot?
The reviews are in for the U.S. president's recent Asia tour, and they're not great. In Tokyo, Seoul, Kuala Lumpur and Manila, much of the media chatter is asking where America's vaunted "pivot" is. Obama, the conventional wisdom says, put little meat on the bones of a promised eastward shift in American priorities. But for a contrarian take, here's a Newsweek piece touting Obama's success in upping America's troop presence in the Philippines. Obama "scored big," argues writer Benny Avni, with a move that down the road may be credited for "breathing life into Washington's Pacific rebalancing, a policy shift that to date has mostly been rhetorical."
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