Here’s an interesting and quick item to check out on a Friday. This map gives an attractive, at-a-glace look at some of the world’s key natural resources, organized by country. A couple of things to note that are East Asia-related: China leads more categories (at least on this map) than any other country, including wheat, cotton, gold and rice.
Given that Asia is now widely seen as leading the world out of the crisis, it is fitting that the role of Asia was more prominently recognized in the global economic system in the recent G20 meeting held in Pittsburgh. Since we last looked in July, the outlook for the emerging markets of East Asia has continued to brighten. The latest regional forecasts come from the Asian Development Bank in its Asian Development Outlook (pdf) published last week. It points to “the rapid turnaround in [Asia’s] largest, less export-dependent economies” and predicts that “the regional economy is now poised to achieve a V-shaped rebound.” These are very positive words indeed! As the graph below shows, the ADB has in fact upgraded its growth forecasts for a number of economies for 2009.
Although the signs are pointing upwards, performance is still mixed in a number of key areas.
I apologize for the lack of recent posts, but I have been traveling in the region and then getting over a cold, so I’m finally back in action. One of the stops during the trip last month was to Jakarta to participate in our internal Economist’s Forum. This forum was very interesting and included sessions with the Indonesian Minister of Finance, as well as the
This somewhat provocative question was the title of a conference hosted by Oxford and Standard Charter this week in London. My answer was: "No, not tomorrow; but yes, eventually – especially if China continues to vigorously pursue economic reform."
The reason that China cannot be the engine of global growth tomorrow is straight-forward. For the last decade an awful lot of the final demand in the world has come from the U.S. That era is over for the time being as U.S. households now concentrate on rebuilding their savings. No one country can fill the gap left by the slowdown in U.S. consumption: Japan, Germany, and China together have less consumption than the U.S., so no one of them can replace the U.S. as the major source of demand in the world. It's not realistic to expect China to play that role. But we are probably moving into a more multi-polar period in which there is more balanced growth in all of the major economies.
|Declining revenue of tuk-tuk drivers in Cambodia shows even the informal sector isn't insulated.|
The World Bank today launches its projection of a 1 percent contraction of the Cambodian economy. This is based on an analysis of available statistics and feedback from a range of economic actors. Yet, to most of my Cambodian friends, it remains hard to conceive.
It is true that "seeing" such a contraction will be difficult. Basically, what it means is that economic activity in 2009 will be pretty much the same as in 2008. So the fact that we continue to have traffic jams in Phnom Penh, see tourists at the Royal Palace, and hear construction machines in many residential areas is consistent with such a projection. What will change, though, is that incomes will not increase this year as fast as past years and it will also become more difficult for the 250,000 young people leaving school each year to find their first job. What also will be different is that with no growth in aggregate, there will be a proportion of those with a livelihood at the end of the year worse than at the beginning.