According to conventional economic theory, the monetisation of government debt is a recipe for fiscal profligacy and hyperinflation. It should be the last thing to which any credible central bank turns its hand. However, this is precisely what the Bank of Japan (BOJ) has been doing for the last three years.
The December 2015 meeting between Thai Prime Minister Prayuth Chan-ocha and his Cambodian counterpart Hun Sen has boosted bilateral relations. Relations got off to a rocky start after the Thai coup of May 2014 when Thailand abruptly ordered the exit of up to 100,000 unregistered Cambodian workers. Now the future looks bright. There is even speculation in the Thai press that the Thai Royal Princess Sirindorn may visit Cambodia in February.
Two key policy decisions underpin the improved bilateral ties.
For at least a couple of years before the Great Financial Crisis, policymakers often cautioned that investors were mispricing risk. Through the crisis, investors became painfully aware of many risks, including counterparty risk and reputation risk. Now many observers are highlighting a new risk, what they call the credibility of central banks.
Those familiar with the history of the World Trade Organization (WTO) may also recall its long-stalled negotiations over the Doha Development Agenda (DDA or simply “Doha). Last month, a bloc of developed nations led a charge to finally dismantle those talks and allow the WTO to move forward on addressing different agendas. While this call to new action has received challenges by developing nations — led chiefly by India — the United States and the European Union have both called for the WTO to start work on “new issues” pertaining to international trade.
The US dollar is broadly mixed as attention turns to the FOMC statement later today. The most important development has been the unexpectedly large oil inventory build reported by the API ahead of today’s government estimate.
The 11.4 mln barrel build is the largest in nearly two decades. To put the rise in perspective, consider that the US output is around 9.2 mln barrels a day. The news keeps the price of crude volatile, and yesterday’s $1.10 increase in the March light sweet contract has been completely unwound today.
The billionaire’s strategy of appealing to angry white men by stigmatising minorities is exerting lasting damage on the Republican Party’s image. Demographic shifts could make the party unelectable for a generation, or more.
By 2030, the world will invest an estimated $57 trillion in infrastructure improvements. Many of these improvements will be made by way of what is known as a public-private partnership (PPP), in which governments will partner with private sector interests. This allows a government to leverage the expertise and capabilities of the private sector to achieve public policy goals. However, these partnerships do not always go entirely smoothly, often hindering progress and leading to expensive disputes.
With equities sliding and oil pushing back below $30, it may feel like the resumption of moves in the first two and half weeks of the year, but it is different. It is considerably more orderly. The contagion from the equity and oil slide is more limited than previously, and even oil is recovering in the European morning to trade back above $30. European equities opened lower but spent the morning recovering, even if not fully.
Last year in the Asia Pacific will be remembered for shambolic shifts towards a more multipolar economic and political order. The United States alone can no longer shape global destiny but will have to share power with allies and rivals, even as regional powers find themselves threatened by their own challenges.
As the world deals with the “new normal” of a slowing China, regional financial and economic integration is more important than ever, and South Asia is strategically poised to play an influential part.
There are several reasons why it is time to take a fresh look at the potential bridging role of South Asian economies in Asian integration.
