Sunday, June 20 2021 | ASIA TODAY INTERNATIONAL - Reporting the Business that Matters in Asia
THE SUM OF ALL FEARS
BUSINESS has every reason to be wary, even anxious in an uncertain world . . .
ANXIETY RULES! We led our ASIA2015 issue at this time last year with a cover theme on the emerging reality in Asia of political risk.
Asia had, we said then, become a less secure place, and we listed the hot spots: Chinese hegemony in the South China Sea; North Korea’s antagonism; ISIS threats against India (which has a significant Muslim population); Hong Kong protests against China; Taiwan resisting rapprochement with Beijing; instability in Malaysia; military rule in Thailand.
Not much has improved.
China continues to build structures on islets dotted through the South China Sea, claiming airspace and territorial waters around them.
Its neighbours, and, more significantly the United States, are not amused.
The challenge is there.
Pyongyang is escalating its rhetoric, and direct action against South Korea.
ISIS continues its death march.
Hong Kong rumbles.
Taiwan is almost certain to elect a new President far less enamoured of Beijing; Malaysia is close to political crisis; Indonesia struggles, its leader hamstrung by the Megawati machine.
One brighter spot, Thailand, where the military has resurrected a key architect of Thaksinomics to reshape the economy.
November will see a critical election in Burma.
Will the military there finally step aside, or opt for continuing domination? Behind that, will China be permitted to dam the Irrawaddy? The potential impact of that decision on China’s relations with other ASEAN countries should not be under-estimated.
There will also be a critical election in the Philippines, when a popular President who has brought a new sense of optimism to his people steps down. Is there a potential successor able to grasp the mantle?
And we haven’t even mentioned the elephant in the room – the Chinese economy. The slowdown is hurting in China, but the impact has rolled out globally. World trade is largely becalmed.
What of the smaller jumbo issues – timing of a movement in US interest rates and sluggish performance in the EU economy? Overlaid by a looming US Presidential election and the unknown costs to Europe of unprecedented Muslim migration as both the Middle East and Africa unravel?
Latin America has stalled, with Brazil now close to a basket case. Commodity prices remain scary, and currency fluctuations seem to have a mind of their own. Business has every reason to be wary, even anxious.
WE LEAD our assessment of the business outlook for ASIA2016 with two quite different views of the world.
Charles Dallara, one of the most astute ‘insiders’ of the world financial system, remains an optimist.
The reality, he says, is not as glum as some believe, the world is not a cauldron of turmoil, and markets need to separate their sources of anxiety.
Currencies and interest rates have already factored in the new reality in China, and he is “reasonably confident” that the world will adapt “quite effectively” to higher US interest rates.
Joakim Reiter, Deputy Secretary General of UNCTAD, is less sanguine.
Asian economies modelled on export-led growth are in a “very challenging” position, now competing for the same markets — not selling to an expanding pie.
“There is not enough proof out there to indicate to us that the global economy is about to turn the page,” he says.
“Quite the contrary.”
NOTHING is more confronting today – for both government and business – than the disruptive impact of the digital economy.
It is the proverbial snowball, creating tsunamis of change as it thunders downhill.
Our cover report (pages 33-43) for ASIA2016 assesses some of the emerging realities as governments try to impose some form of governance on the borderless e-commerce phenomenon that last year cost them up to US$240 billion in lost taxation revenue.
Is it time, asks the OECD’s Raffaele Russo, to be thinking about a new tax system more suited to the third millennium? There are other questions, too, about jobs, security, costs and even the essential infrastructure of the internet.
Are you unknowingly sharing your IP address with 2,000 other devices? Can you afford that security fortress your customer and supplier are going to demand? Can you compete with the ubiquity of Big Data? Will you lose your independence to a Google-style provider? Will the Internet become a private dominion of the rich and powerful? Scientist Geoff Huston, often seen as the ‘father’ of the Internet in Australia, says the Internet has turned toxic as it falls victim to the tyranny of economics.
Feeling anxious now?
*Barry Pearton is Publisher of ATI Magazine