Education policymakers worldwide often make a pilgrimage of sorts to Finland and Singapore to learn about their high performing education systems. These states consistently do well in PISA tests, which are organised by the OECD every three years to measure and compare the competencies of 15-year-olds worldwide. There is no doubt that their achievements are impressive, but there is more to be said for examining places that are rapidly improving rather than those that are already highly effective. This week, CfBT Education Trust published a report exploring school reform in five world cities including three in emerging markets, where there has been rapid improvement in recent years.
Despite enormous diversity, the report has identified seven common trends that link educational success in each of these places. Strong leadership, commitment to reform and collaboration between schools are among the factors that have driven up standards. These cities have used education to break the link between poverty and attainment in a way that has not be done before and which could have profound implications for social mobility and their social and economic structures. Innovation and creativity have set new standards in these cities which could be applied in emerging markets across the world. Read more
Emerging Asia is set to be the world’s fastest-growing region again in 2015, skirting the contagion from Russia’s crisis and riding the fall-out from weak commodity prices, according to Fitch, the credit rating agency. Nevertheless, structural frailties stalk seven out of 10 countries in the region, with surging debt levels a particular concern, the agency said.
The region, excluding China, is expected to expand by 5.9 per cent in 2015 and 6.1 per cent in 2016 – compared to an average for global emerging markets of 4.1 per cent and 4.5 per cent respectively, Fitch said in a report. These forecasts compare with the International Monetary Fund’s (IMF) estimates that developing economies would this year grow at 4.3 per cent, accelerating to 4.7 per cent in 2016. Read more
China’s new charm offensive in Asia – using infrastructure development to garner soft power at the expense of rivals US and Japan – has reached new heights in recent weeks. Multi-billion US dollar deals with strategic partners such as Sri Lanka and Pakistan aside, even countries with reservations about China’s rise have begun taking a more pragmatic view toward using China’s huge foreign exchange reserves to their benefit.
Earlier this month, Indonesian leaders travelled to Beijing seeking to tap financing for power and transport projects, notwithstanding the new administration’s strong emphasis on both national and maritime security. Chinese companies are challenging Japanese bids for high speed rail contracts in Malaysia and Thailand. This week, a team from Indian Railways flew to Beijing to discuss a potential Delhi-Chennai high speed rail link.
Yet in spite of the huge stashes of money available in Beijing, Chinese financing for existing energy projects in Vietnam – an economy with high dependency on China – has been all but frozen as a result of bilateral tensions over the South China Sea, according to research by Asean Confidential, a research service at the Financial Times. Read more
In spite of Mikhail Gorbachev’s warning this month that the world is on the brink of a new Cold War, it is Asia that we should be worrying about, says former Australian Prime Minister Kevin Rudd. The region is home to seven flashpoints which, if they erupt, could end the greatest economic growth story of the 21st century.
“We face this remarkable set of circumstances where global growth will be driven from Asia,” Rudd told beyondbrics in a recent interview in Dubai.“But Asia from a political perspective is a potentially unstable region. So the world [should have] a deep interest in not just the future growth trajectory, but also the political and security circumstances which underpin that equation.” Read more
Nations have negotiated trade agreements in one form or another for centuries. And for centuries economists have undoubtedly been facing the same question: Do trade agreements really matter?
The orthodox answer is obviously that they do. When you lower the barriers to trade goods flow more freely across borders and businesses, consumers and economies as a whole benefit as a result. But HSBC and the Economist Intelligence Unit are out with a new business survey that offers some interesting practical realities. Read more
“When eating an elephant, take one bite at a time”, US Army officer and Vietnam veteran Creighton Abrams once said.
In his new book, The Rise of the New East, Ben Simpfendorfer does just that. His elephant is “The East”, the group of almost 50 emerging markets ranging from Turkey to China that is home to well over half of the world population.
Simpfendorfer gives his topic a thorough treatment. While his insights seem logical and intuitive, taken together they give an impressive oversight of into key trends shaping the region. beyondbrics noted five insights that particularly stood out. Read more
By Gavin Bowring, Asean Confidential
It might seem odd to think of Cambodia as a haven of political stability. Labour unrest in Cambodia’s garment factories turned violent in January this year, while the country’s opposition party, the Cambodia National Rescue Party (CNRP), has boycotted Parliament for six straight months in protest of last year’s “flawed” general elections.
Nevertheless, in the space of a week, Cambodia has seen thousands of Chinese residents in Vietnam fleeing across the border as a result of escalating tension between China and its southern neighbour, Vietnam. Meanwhile, the recent military coup in Thailand led to implicit suggestions by the lawyer of former prime minister Thaksin Shinawatra that Cambodia might be willing to host his “government-in-exile”, though these suggestions have been denied by Cambodian Prime Minister Hun Sen. Read more
If you are doing business in Asean – the Association of Southeast Asian Nations – be prepared for an electric shock.
Analysts at ANZ have looked at what’s happening with electricity prices across the region and are warning that they are set to rise, making it considerably more expensive to run factories. It will also add half a basis point on average to inflation, which is already inching up. Read more
Russia and Vietnam signed a raft of economic agreements on Tuesday that will strengthen their strategic partnership and counter rising Chinese influence in southeast Asia.
The deals, signed during a visit by Vladimir Putin to Vietnam, will see Russia step up involvement in Vietnamese energy markets and help boost security in the country that has been a close Kremlin ally since Soviet times. “Vietnam has been a long-term, trustworthy partner for Russia and the political dialogue between the two countries is at a high level,” Putin told reporters after talks with Truong Tan Sang, his Vietnamese counterpart. Read more
PMI scores | Source: HSBC / Markit
Asian manufacturers are more positive than any point since April, according to the latest Markit / HSBC PMI surveys.
The purchasing managers index for October for six Asian economies (China, India, Indonesia, South Korea, Taiwan and Vietnam) showed that five scored over the 50 mark that separates expansion from contraction, and with none showing a decline in sentiment. It’s a big improvement on just two months ago when only China was showing any postive signs. Read more
By Nguyen Van Phu of the Saigon Economic Times
Activists in Vietnam fight tenaciously for many things. They’ve advocated land ownership for farmers, equal footing for the state-owned and private sectors and the suspension of a costly bauxite project that is neither financially viable nor environmentally friendly. And yet, they have never raised their voices against the dark sides of free trade agreements as have their peers in other developing countries. Read more
There has been a bit of a turnaround in sentiment in Asian manufacturing from August to September. The purchasing managers index (PMI) readings for six major Asian economies paint a more optimistic picture – just.
The Asia PMI scorecard shows that August’s red is turning blue – with three indices moving above the 50-mark that separates expansion from contraction.
Source: HSBC, Markit
A quick look at manufacturing purchasing managers’ indices for Asia this year shows a worrying trend. From a positive start to 2013, the numbers for the six countries tracked by Markit Economics/HSBC are gradually slipping down to the 50 mark separating expansion from contraction, and below.
Source: HSBC, Markit
What sort of welcome should we give to the Vietnamese Asset Management Company, due to come into operation today? As beyondbrics wrote in May, its alternative title of ‘bad bank’ may be a big understatement. Now Fitch Ratings has weighed in with a report saying the VAMC is unlikely to solve the problems of Vietnam’s troubled banking system or, therefore, do much to help revive the country’s flagging economy. Read more
By Leif Lybecker Eskesen of HSBC Global Research
Japan’s economy has struggled for decades, weighed down by the debt hangover from the era of burst bubbles and other structural impediments. However, this may change if “Abenomics” delivers on its promises, which in turn has major trade and investment implications for the Asean-5 countries of Indonesia, Malaysia, the Philippines, Thailand and Vietnam. Read more
On the face of it, positive news from Vietnam: growth for the second quarter was up 5 per cent, following 4.9 per cent in the previous quarter, according to the country’s statistical office.
Time to celebrate? Not quite. Read more
Five years ago, few Vietnamese owned a smartphone with internet access. Now, wireless networks, 3G services and iPads are in use on every street corner. Vietnam, a country of 90m people, a third of whom use the internet, seems to be a promising land for web start-up businesses. But a web start-up like Coc Coc, whose aim is to beat Google, is rare. Read more
Southeast Asia’s credentials as the next great frontier for economic growth, spurred by young populations and cautious optimism over planned structural reforms is one this year’s big emerging market themes. Just look at the Philippines, which notched up 7.8 per cent growth in the first quarter, even beating China.
But for private equity, the region is proving a tough nut to crack. Last year, according to consultancy Bain & Co, was “underwhelming”. Deal value fell by 16 per cent to $4.9bn, the number of deals dropped to just 32, from 39 the year previously. Read more
The Vietnamese government is preparing to set up the Vietnam Asset Management Company following its approval by the prime minister on May 18 after several delays this year. VAMC will be a 100 per cent state owned company whose aim, according to the central bank, is to “solve the bad debts and promote reasonable credit growth in the economy.”
But key questions remain about where the money will come from, whether a company with 500bn dong ($24m) will be able to unravel bad debts of hundreds of trillions of dong in the banking system, and how to implement it. Read more
With Vietnam’s economy still struggling and the IMF recently cutting its GDP forecast for this year to 5.2 per cent – anaemic by emerging market standards – the central bank on Friday cut interest rates for the eighth time since 2012.
But economists believe that rate cuts are unlikely to help Vietnam regain its spot as one of Asia’s hottest emerging markets without structural reforms to tackle the bad debts weighing down the banking sector and the wasteful state-owned companies distorting the economy. Read more