Pesek on Asia: Indonesia's Fat Subsidies, India’s Middle ClassWilliam Pesek
By William Pesek May 7 (Bloomberg View) -- Good morning. Here's my take on some of the stories driving the debate in politics, finance and social issues across Asia today: Get ready for fresh chaos in Bangkok. Riot police are gearing up for fresh chaos in Bangkok after Prime Minister Yingluck Shinawatra was ousted by Thailand's Constitutional Court, the second member of her family to be removed from office since 2006. Yingluck never did shake the perception she was a mere placeholder for her brother, former Prime Minister Thaksin Shinawatra, who was tossed out in a 2006 coup and fled the country to avoid corruption charges. Expect a powerful, and potentially violent, response from Yingluck’s mainly rural supporters called the Red Shirts in the days ahead. As the nation descends into another about of political uncertainty, its economy and markets will be caught in the crossfire as rarely before. If you thought things couldn't get any crazier in Bangkok, think again. Indonesia's presidential frontrunner makes a bold proposal. Jakarta's Mr. Fix-It is already giving investors around the globe reason to cheer. Joko Widodo, governor of the Indonesian capital and presidential frontrunner, is putting his popularity to the test with a call to cut fuel subsidies. It's a hugely controversial step in the fourth most-populous nation, one struggling to lift tens of millions out of poverty. But it's the right move from a fiscal-responsibility standpoint. It's also a welcome sign that a leader with a reputation for getting things done and forward-looking leadership isn’t losing his nerve on the national stage. Whither India's middle-class revolution? "India’s Bourgeois Revolution." That's how United Nations diplomat turned politician Shashi Tharoor describes a dynamic changing the face of Indian economics and politics. The sheer number of non-elites running for office in this election cycle is a game changer all its own. "If the current trend continues," he argues in this Project Syndicate op-ed, "India’s middle-class voters will have more representatives with whom they can identify, rather than having to pay allegiance to politicians for whom they constantly need to make excuses. That will be Indian democracy’s salvation." Why China will remain a top-down nation. When political scientists and pundits ponder China's future, they tend do so through the lens of the American experience. The focus isn't on whether China will embrace U.S.-style representative democracy and its federalist model of governing, but when. This item from TheGlobalist.com challenges these notions, explaining why Beijing will be much slower to loosen control over regional governments than the U.S. or Australia. This go-slow approach would be a mistake for a Communist Party that will face any number of existential crises in the future -- not least its waning legitimacy among the masses far from the Chinese capital. Abenomics sales pitch goes on tour. Shinzo Abe took his shock therapy program on the road, proclaiming in Paris that the "Japanese economy is back." Back home, though, evidence to the contrary continues to mount, including growing expectations for a stronger yen as the U.S. withdraws liquidity from global markets. Any success Abenomics has had in boosting stocks and corporate profits is a product of a more competitive exchange rate. That benefit is about to go away. Perhaps Prime Minister Abe should spend more time at home implementing structural reforms than touting them overseas. Hats off to Beijing amid emissions trading. China tends to drag its feet on its global responsibility as the No. 1 generator of greenhouse gases -- a line of criticism that's well deserved. But Beijing's move to build an emissions-trading market is an intriguing and potentially important step. CGN Wind Energy unveiled plans to introduce China’s first structured notes linked to the price of carbon offsets. Should this fledgling market take off it would necessitate a huge pool of data and produce reams of new statistics about the magnitude of China's pollution challenge. A small step toward greater carbon-emissions transparency, yes. But hats off to China for trying. That's progress in and of itself. (William Pesek is a Bloomberg View columnist. Follow him on Twitter at @williampesek.) To contact the writer of this article: William Pesek at email@example.com. To contact the editor responsible for this article: Mark Gilbert at firstname.lastname@example.org.
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