Government debt in emerging Asian economies hit 50% of gross domestic product in the third quarter of last year, according to estimates by the Institute of International Finance, in a trend that suggests a regional shift away from fiscal conservatism. “Entering a financial crisis with a weak fiscal position worsens the depth and duration of the ensuing recession, particularly in emerging-market economies, because fiscal policy tends to be procyclical in these cases,” said Vitor Gaspar, director of the International Monetary Fund’s Fiscal Affairs Department. While government debt in emerging Asia is creeping up, it remains low compared with Japan’s 223.1% of GDP and 100.8% in the U.S. “The relatively low public debt gives the region more buffer against a potential global downturn, enabling policymakers to use expansionary fiscal policy to support demand,” said Frederic Neumann, co-head of Asian economic research at HSBC.
JAKARTA — Governments across Asia are seeking to bring millions of informal workers into regulated employment, and stem a major economic drag on the world’s fastest-growing region. Bangladesh, Indonesia and China have taken steps this month that could help formalize employment for a vast pool of workers that are struggling on the margins of their economies, many as self-employed merchants or agricultural laborers. The World Bank estimates that informal workers make up 47% of jobs in the East Asia and Pacific region, with the figure rising to between 60% and 80% in lower income countries such as Myanmar and Laos. The government in Dhaka last week signed a $250 million deal with the institution aimed at supporting efforts “to create large-scale, better-paid and inclusive jobs.”
JAKARTA — Myanmar attracted the most foreign direct investment of any of the world’s so-called “least developed countries” in 2017, even as the nation’s reputation plummeted over its forced expulsion of tens of thousands of Rohingya Muslims. The $4.3 billion worth of realized FDI that went into the resource-rich Southeast Asian country put it on top of the global economy’s bottom division of 47 nations, according to a report by the United Nations Conference on Trade and Development. Myanmar edged out second-place Ethiopia, with Asian neighbors Cambodia and Bangladesh taking third and fifth spots. Even so the nations remain far behind Association of Southeast Asian Nations peers such as Indonesia and Vietnam.
JAKARTA — China is starting to build its largest offshore wind-power facility in the latest move in an accelerating shift in Asia away from solar to wind and other renewable energy sources. Work began in late October on the facility off Nanpeng Isle in China’s southern Guangdong Province. The project has a planned capacity of 400,000 kilowatts, and its developer, China General Nuclear Power Corporation, expects it to generate about 1.46 billion kilowatt hours of power annually when it goes on stream in 2020 Wood Mackenzie, an energy consultancy, sees wind-generated capacity in the region growing by a factor of 20 over the next decade, powered by Beijing’s plans for a 15-fold expansion. Guangdong plans to build 23 offshore wind farms by 2030, according to China’s official Xinhua News Agency. Meanwhile, Asia’s solar-powered electricity capacity is set to fall this year for the first time since 2001, as countries such as China cut subsidies.
NUSA DUA — U.S. Treasury Secretary Steven T. Mnuchin said Saturday that he was sticking with plans to attend a government-sponsored investment conference in Saudi Arabia this month despite the uproar over the disappearance of a prominent Saudi journalist, although he said he would reconsider that decision “if more information comes out.” Mnuchin said he was concerned about the fate of Saudi-born journalist Jamal Khashoggi, who entered the Saudi consulate in Istanbul, Turkey, last week and has not been seen since. Turkish investigators say Khashoggi, a well-connected Washington Post columnist who had become a critic of the powerful Saudi crown prince, was killed and his body dismembered by an elite Saudi security team. Saudi officials say Khashoggi left the consulate freely, but have not substantiated their claim.
NUSA DUA — Chinese billionaire businessman Jack Ma slammed Western economies as over-regulated during a frank exchange with World Bank chief Jim Yong Kim at a conference in Bali. “In Europe they don’t like me, in America they don’t like me,” Ma said, drawing laughter from an audience at the International Monetary Fund/World Bank annual meeting that included government representatives from around the world. “In Europe a lot of people talk about regulations, they love to discuss about the worries, asking what ya gonna do. In America they have their system,” said Ma, who will step down as chairman of Alibaba Group Holding, the Chinese internet giant he founded, in September next year
SINGAPORE — The decision by Vietnam’s ruling Communist Party to endorse General Secretary Nguyen Pho Trong as the country’s next president is akin to China’s shift to centralized rule under Xi Jinping — albeit with more limitations. The presidency has been vacant since last month’s death of Tran Dai Quang, and Vietnam’s National Assembly is expected to rubber-stamp Trong as the replacement during a monthlong session starting on Oct. 22. “The central committee has discussed about the merging for quite a long time, therefore the recent move — though it might seem accidental due to Mr. Quang’s death — it should be seen as deliberate,” said Nguyen Khac Giang, Senior Political Researcher at the Vietnam Institute for Economic and Political Research in Hanoi. “It will be the new normal of Vietnamese politics.”
JAKARTA — While European Union leaders were in the middle of another round of Brexit talks in Salzburg this week, the European Commission was pitching a plan to boost Europe’s infrastructure links with Asia. The commission, a key EU decision-making body, estimates that Asia needs 1.3 trillion euros ($1.5 trillion) a year in infrastructure spending over the next few decades. European infrastructure upgrades will cost a projected 1.5 trillion euros between 2021 and 2030, it said. EU foreign ministers will vote on the plan ahead of a meeting of leaders of 51 countries across Asia and Europe in Brussels next month. Financing details are hazy, with the commission suggesting that it draws on existing EU funds, loans from development banks and public-private partnerships. Some analysts say the plan — titled “The European Way to Connectivity” — suggests that the EU is proposing an alternative to China’s flagship Belt and Road Initiative, an ambitious collection of road, rail and port projects in 60 countries spanning Asia, Europe and Africa.
SINGAPORE — China has long bristled at the U.S. Navy’s “freedom of navigation operations” in the South China Sea, which challenge Beijing’s territorial claims in the disputed waters. So when Zhao Xiaozhuo, a senior colonel in the Chinese army, found himself with a chance to complain about them directly to U.S. Secretary of Defense James Mattis recently, he took it. The U.S. operations are a “violation of the law of the People’s Republic of China, of territorial waters,” Zhao told Mattis during a conference in Singapore on June 2. Mattis defended the naval operations by citing a 2016 international tribunal decision that dismissed China’s expansive “nine-dash line” claim to much of the sea.
SINGAPORE– After U.S. Defense Secretary Jim Mattis accused China of “intimidation” and “coercion” in the disputed South China Sea on Saturday, a Chinese general responded by saying that “countries accusing China” are the ones causing tension in the region. In an early morning speech in Singapore, Mattis said that “China’s policy in the South China Sea stands in stark contrast to the openness our strategy promises, it calls into question China’s broader goals.” Mattis was speaking at the Shangri-La Dialogue, an annual military conference staged by the International Institute for Strategic Studies, a British research organization. Responding later the same day, Lt. Gen. He Lei, head of the Chinese delegation attending the conference, said “China has resolve and capability to defend its sovereignty.”