Public debt in “emerging Asia” creeps past 50% of GDP – Nikkei Asian Review

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.

U.S.-China trade war has yet to hurt rest of Asia – Nikkei Asian Review

NUSA DUA — Asia is not yet feeling the effects of growing trade friction between China and the U.S., due to the internal strengths of the region’s “solid” economies, according to Takehiko Nakao, president of the Asian Development Bank. The trade dispute “is not as damaging right away,” Nakao told the Nikkei Asian Review on the sidelines of the International Monetary Fund-World Bank meetings being held in Nusa Dua on the Indonesian island of Bali. “The Asian economies are solid,” Nakao said, but he also warned that any escalation of the tariff war between the world’s two biggest economies could hit Asian exporters hard. “If it escalates, if it damages supply chains, as East Asia is connected to [global] supply chains, it could have a dire impact,” Nakao said. The fear is that complex supply chains, in which multinational companies make or source parts for finished goods in countries across Asia before final assembly, often in China, could be disrupted. But for now, domestic demand within Asia’s bigger economies could offset the impact of the trade restrictions, Nakao said earlier at the forum.

Ireland to Burma, voodoo politics – The Irrawaddy

Bleak midwinter at Dublin Airport (Photo: Simon Roughneen)

DUBLIN — While doing research on folk beliefs in Ireland in the early 20th century, an American anthropologist asked an elderly woman if she believed in fairies. “No, I do not, sir,” came the seemingly decisive reply. End of story? Not a chance. “However, they are there anyway,” the lady continued, perhaps wryly trying to make fun of her overly-earnest interlocutor. This well known anecdote might in fact be apocryphal, and though the supernatural is long gone from Irish popular culture, there is a mystical tinge to the country’s recent economic boom-to-bust saga. From the mid-1990s to 2007, Ireland’s economic growth changed a nation of emigrants into one where around 10 percent of the population were recently arrived immigrants, many from Eastern Europe. Growth ranged from 5-10 percent over a 15-year period and Ireland acquired the “Celtic Tiger” moniker after a Morgan Stanley economist compared the transformation of the North Atlantic island with the Asian Tiger economies of South Korea, Singapore and Taiwan. Since 2008, however, Ireland’s GDP has contracted by 14 percent and its unemployment rate is now around the same percentage. One Asian country that was never close to joining the Tiger ranks was Burma.  The country’s military rulers are known for their attachment to bizarre economic thinking, some of it apparently based on numerology or other esoteric notions.