Opinions < 2003 < December |
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The Rise of Asia Gathers Speed The Financial Times December 29, 2003 A new Economic power is emerging in Asia, one with a potent present and afar more significant future. Adjusting to China’s rise is likely to be among the great challenges of our era. But China is not alone. India also stirs. For the past 100 years, the US has had the world’s largest integrated national economy. The other dominant center of economic activity has been Europe, a rival of the US in economic size, thought still not as integrated. The rise of Japan and several smaller high income Asian economies has added another, rather smaller, pole of wealth. In 2003, North America (excluding Mexico), together with the European Union, generated 59 percent of global gross product. The US alone produced 31 percent. The Asian high-incomes countries (with Australia and New Zealand included) generated a further 18 percent, of which Japan contributed 14 percent. Together, these high income countries, with less than a sixth of the world’s population generated more than three quarters of global GDP.
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As
the name suggests, an Asian Bond Fund (ABF) is simply a fund that
invests in bonds of Asian Countries. These could be sovereign bonds,
i.e. bonds issued but the governments or sovereign of the countries
in question, and would typically be denominated in dollars or they
could be local currency bonds, including corporate paper. The
need for an ABF can be traced back to the Asian Financial Crisis
of 1997-98. The crisis forced economists and policy makers everywhere
to try and think of ways to prevent a recurrence of such developments
in future. There are many explanations for the crises, but they
can be broadly divided into two categories. The first emphasis that
the crisis was self made, the result of crony capitalism. The other
emphasises panic. It points out that by conventional indicators
the SE Asian economies were in comparatively good health and there
is no explanation for this abrupt loss in confidence other than
the fact that that international capital is extraordinarily fickle,
footloose and suffers from herd mentality. Click
here to read the full Article : http://economictimes.indiatimes.com/articleshow/373265.cms |
The
Asian Development Bank President, Tadao Chino, taking up the case
of Japan, expressed his view that protectionism was slowing up the
process of Asian integration. Click
here to read the full Article : http://www.japantimes.co.jp/cgi-bin/getarticle.pl5?nb20031219a4.htm |
Prime
Minister Atal Bihari Vajpayee’s idea that South Asian countries
can build an economic union on the lines of the European Union needs
to be assiduously worked upon over a period of time. Vajpayee has
even talked of a single currency in the long run for this region.
He has said popular sentiment is in favour of creating an expression
of “enlightened regional self interest” such as that. Of
course skeptics will rush to reject this as utopian and invoke the
reality of protracted Indo-Pak hostility as the main reason why
this cannot be achieved. But history does have a way of throwing
up surprises that turn received wisdom on its head. After all no
one had imagined that after the second world war Germany , France
and Britain would envisage a common market, and a single currency
in the decades to follow. The political and intellectual elite never
leads the march of history but is invariably led by it. So the idea
of a South Asian Union(SAU) could well become a reality in
the years to come. Click
here to read the full Article : http://economictimes.indiatimes.com/articleshow/360508.cms |
During
the ASEAN Japan Commemorative Summit, leaders from Japan and the
Association of Southeast Asian Nations, or ASEAN, agreed to establish
a broad-gauged relationship that includes not only trade and investment
but also political and security cooperation. Described as the "Tokyo
declaration," the accord sets an ambitious long-term goal of
creating an "East Asian community." Click
here to read the full Article : http://www.japantimes.co.jp/cgi-bin/getarticle.pl5?ed20031217a1.htm) |
For
a number of reasons, it will be a while before we get to the stage
of flexible exchange rates. But can we try and replicate the financial
markets of the west? That way, whatever else the motivation for
buying dollars, at least it will not be to guard against the consequences
of capital flight. It
is here that an Asian Bond Fund on the lines proposed at the recent
meeting hosted by the Hong Kong Monetary Authority and attended
by Australia , China , Japan and many other South-East Asian countries
could make a difference. Unlike the original Asian Bond Fund proposed
in the aftermath of the Asian financial crisis (which was to invest
in sovereign and quasi-sovereign Asian bonds), the new Bond Fund
would invest in local currency bonds, including corporate bonds.
Today the bulk of Asian central bank reserves are invested in western
assets, mainly treasuries. This is an extremely inefficient state
of affairs as money needed in capital scarce countries where it
is certain to earn higher returns is, instead, invested in low-return
US treasuries. Click
here to read the full Article : http://economictimes.indiatimes.com/articleshow/358439.cms |
India
is a happening place. You will make more money here than in the
country east of us, external affairs minister Yashwant Sinha told
the Indo-EU business summit in Delhi late last month. Click
here to read the full Article : http://www.outlookindia.com/full.asp?fname=Diplomacy%20(F)&fodname=20031215&sid=1 |
Compared
with Europe, Asia’s distinction is diversity and homogeneity. We
will put importance on diversity (of each Asian nation) as countries
in the region expand cooperation for development. Japan does not
believe that the European Union, with its legally bound community
featuring close relationships with shared policies and a common
currency, is the sole model for an Asian community to be based on.
Click
here to read the full Article : http://www.japantimes.co.jp/cgi-bin/getarticle.pl5?nn20031209b1.htm |
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