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To Everybody Assembled Here…
This is a presentation about a phenomenon
called….
Asia
Lee Kuan Yew
• Born 16th Sept, 1923 in Singapore
• Name means “The Light that shines far and wide”
• The founding father of modern Singapore
• First Prime Minister
Angkor Vat
• Pluvial Mountains, Cambodia
• Marvelous cathedrals and Buddhist monasteries
• Means “Capital” in Khmer Language
The Buddhas of Bamiyan
• Two Buddhas with a height of 53 m & 38 m at an alt of 2500 Mtr
• 4th & 5th century AD• Constantly assaulted
by the iconoclasts• Bamiyan valley in
the hands of Taliban in 1998 led to its final destruction
Petronas Towers•Kuala Lumpur,
Malaysia•Height: 452 mtrs –
higher than Sears Towers
•Work started in 1994, will be completed in 2009
•Pride of Malaysia
Akio Morita• 1921 – 1999•Set up Sony in 1946•The “MAN” behind
the WAKMAN•Target – America •Respected for his
business acumen and negotiation skills
Junichiro Koizumi• Japan’s Prime Minister•59-yr old bachelor –
also known as “Lone Wolf”
•Fan of both Heavy Metal and Opera
•Has the unenviable task of getting back Japan from the doldrums
Junichiro Koizumi• Japan’s Prime Minister•59-yr old bachelor –
also known as “Lone Wolf”
•Fan of both Heavy Metal and Opera
•Has the unenviable task of getting back Japan from the doldrums
Taj Mahal•Eighth wonder of
the world•Work began 1631
& ended in 1655•A workforce of
20,000•Built entirely of
marble
Great Wall of China• Only man-made
construction visible from the moon
• Started in 7th Century B.C.
• A wall to separate and protect
• A total length of 6000 kms
Hong Kong• Leased by China to
the British – returned to China on July 1, 1997
• One land – Two Govt• Most of China’s trade
done through HK• Trade & Finance -
the strengths of Hong Kong
Deng Xaoiping• 1904 - 1997• “Whether a cat is
black or white, it is good as long as it catches mice”
• Came to power in 1978
• Creation of market economy
• Responsible for the Tiananmen Square
Singapore Exchange• Asia’s best derivatives
trading exchange• 1 billion outstanding
shares• Incorporated in 1973• It has the best foreign
currency exchange• 25.8 mn contracts –
the highest in any exchange
The Asian Biggies Mass Transit Railways Hong Kong
Infosys Technologies India
Astra International Indonesia
The Asian Biggies
Toyota Motor Japan
Genting Malaysia
Jollibee Foods Philippines
The Asian Biggies
Singapore Airlines Singapore
Samsung Electronics S Korea
Taiwan Semiconductor Taiwan
Charoen PokphandThailand
I. C. N. A. Presentation
Region Readies for Recovery“Is the East Asian Recovery
Happening?”
Binay Jajodia (9037)Jacob Joseph (9038)
Far Eastern Economic Review, January 10, 2002
Contents• Fundamentals of Economics -
“So that we understand the analysis”
• The facts about Asia – “Lies, Damned Lies and Statistics”
• The Final Analysis – “Are the Asian economies really recovering?”
Economic Fundamentals
• Balance of Payments
• What does a Current A/c deficit really mean?
• Capital Account Liberalization
• Capital Controls
• Fixed, Floating & Adjustable Exchange Rates – The Trilemna
Balance of Payments
• Current Account– Merchandise Trade
– Services & Invisibles
• Capital Account– Direct Investments
– Securities
– Bank Claims & Liabilities
Current Account Deficit/Surplus
• What does it really mean?
• Current A/c & Capital A/c are reflections of one another
• Zero Sum Game
• Why should one worry about persistent current account deficits?
Capital Account Liberalization
• What does it really mean?
• It is really in whose interest?
• What do the statistics say? – Damned Lies
• Some winners – rest losers
Capital Controls
• What does it really mean?
• Types of controls– Quantity – based controls
– Price – based controls
– Regulatory Controls
• Rationale of Capital Controls
The Trilemna
• Features of Fixed Exchange Rates
• Features of Floating Exchange Rates
• Which one will you choose?– Monetary Policy
– Fiscal Policy
• Pegged & Adjustable Exchange Rates
REASON FOR EARLIER SLOWDOWN
• Most of Asian economies are export dependent economies
• Japan’s slide into recession • East Asia excels in
manufacturing of high – tech products
• 9/11
JAPAN
- Export dropped 9.1%
- Bankruptcies set to rise
- Unemployment could hit 6%
- Continuing weakness of the stock market
- Weakening of Yen
JAPAN
% change 2000 2001* 2002*GDP 2.4 -0.4 -0.6
Private Consumption
0.6 0.2 -0.5
Fixed Investments
10.4 1.4 -3.2
Industrial Production
5.9 -7.1 -4.3
Current Account ($ billion)
98.9 76.1 76.9
Budget Balance ($ billion)
-248.7 -283.2 -307.6
*Estimates Source:Consensus Economics Inc.
VIETNAM
• Oil export earning to decline by 20%
• Government has launched a campaign to dramatically expand cotton production
% change
2000 2001* 2002*
GDP 6.1 6.1 5.8
Current Account
($ billion)
0.2 0.2 -0.7
*EstimatesSource:Consensus Economics Inc.
CAMBODIA
• Agriculture generating nearly half of national income
• Strong growth in garment exports
• Increase in tourist arrivals by 34%
GROWTH AND RECOVERY IN 2001
- Real Sector Developments
- Asset Market Developments
- Fiscal and Monitory Policies
- Financial and Corporate Restructuring
- Social Sector Developments
REAL SECTOR DEVELOPMENT
INDICATORS:
- Real GDP Growth- Growth of Manufacturing- Growth of Merchandise Exports- Growth of Electronic Exports- Growth of Real Private Consumption- Growth of Real Gross Domestic
Investment- Growth of Merchandise Imports
ASSET MARKET DEVELOPMENT
INDICATORS:
- Composite Stock Price Indexes- Exchange Rate Indexes- Office Property Rents- Office Property Vacancy Rates
Indo Pak War
•3rd December, 1971•Indian army overruns East Pakistan (Bangladesh) and takes 93,000 POW
•Pakistan President – Yahya Khan•Indian Prime Minister – Mrs Indira Gandhi
Indo Pak War
Attack on Karachi
Indo Pak War• Gen Sam Manekshaw orders Indian
army to enter East Pakistan• Within 6 days, India runs into East
Pakistan• The Navy gets its act together –
attacks Karachi – PT 15 missiles• Famous battle of Longewal• Pakistan accepts ceasefire and ends
the war
Vietnam War•The longest and most unpopular
war ever fought by the United States
•58,000 Americans lost their lives•Financial cost to US: $150 bn•War Period: 1965 - 1973•Roots laid after World War II
when French rule returned to Indochina
Vietnam War• Ho Chi Minh unable to convince USA
about his legitimate war against French
• French Generals and American Army expect Ho’s ragtag guerilla army to be defeated easily
• US supports South Vietnam in order to stem the spread of communism
• Ho’s determined effort to unite Vietnam drags USA into the war
• Vietnam finally unites on April 30, 1975
Tiananmen Square
Tiananmen Square• June 4 1989, Beijing•Students fight for democracy –
“Law, not Authoritarianism”•Deng Xaioping – averse to the
idea•Warning by US embassy against
use of force•3000 students killed when tanks
run over the peaceful protesters
Khmer Rouge•The Khmer Rouge government
controls Cambodia from 1975 – 79•Pot Pot – leader of the Khmer
Rouge•More than a million Cambodians
died from hunger, execution and torture
•Major failure of human rights•Trials still going on – justice not
yet done
Nepal – Murder & Monarchy
• June 1, 2001: Regicide of King Birendra & family at Royal Palace at Kathmandu
• 1945 – 2001 • The king was considered to be an
incarnation of Lord Vishnu• Crown Prince Dipendra responsible for
the tragedy – linked to Devyani Rana
The Golden Triangle• Thailand, Burma and
Laos – Known as the Golden Triangle
• Prominent role in drug trade
• Opium produced here attracts European traders
• Considered an exotic land
The Silk Route
The Silk Route• One of the most significant
achievements in history of world civilization
• The Silk route served as important means of business relations between East and West
• Trade done in spices, precious stones, silver goods, byzantine cloth, turkic cloth
• One of the earliest traces of foreign trade
Analysis
•Export Led growth is not always the best - it worsens the terms of the trade– Larger exports causes the countries to receive lower price for exports (also called immiserizing growth)
Analysis
•Dependence on a single country is not a prudent strategy– Recession in the country may dampen receipts
– All East Asian Countries
Analysis
•Improve your internal fundamentals– Improve productivity– Channel money and aid into proper ventures
– Increase consumption within the nation
– Thailand, S Korea, Indonesia
Analysis
•Stronger trade links between the Asian countries– Don’t forget your brothers – An Asian Free Trade Union
– Don’t depend too much on one country
– At least, we can bail each other out
Analysis
•Currency Depreciation– No more fixed currency– Good for exports– Not too good for imports; leads to increased productivity
– Indonesia, Malaysia, Thailand
Analysis
•Foreign Direct Investment– Long term flows– Welcome, FI Investments– Put a time period before they pull out
– Is it time for Tobin Tax?
Analysis
•Capital Account Controls– It is time to impose controls on capital inflows and outflows
– South East Asian Crisis– The idea whose time has returned
Analysis
•Improve infrastructure within the countries– Welcome the FDI Inflows– Leads to quicker development of the local industry
Analysis
•Impact of Sept 11 attacks on Asia– Financial Market Channel– Capital Flows Channel– Trade and Terms of Trade Channel
– Service Sector Linkages
Analysis
•A move from the recession is happening, albeit slowly– Inventory levels going down– Exports rising slowly but surely
– Various markets being tapped now
Bibliography
•Far Eastern Economic Review•Taming Global Financial
Flows – Kanwaljit Singh• International Economics –
Robert Carbaugh• International Money &
Finance – Sukumar Nandi
Bibliography
•www.aric.adb.org•www.feer.com•Asia Rising – Jim Rohwer•Remade in America – Jim Rohwer
•www.timeasia.com
Our Special Thanks To
Technical Support
Sanjeev KumarManthan
BiyaniAmit Jhunjhunwala
Our Special Thanks To
Download Support
Rujuta JagtapAbhinav
KumarPallavi Marathe
Our Special Thanks To
And also to…Shilpa Patil
Namita MinochaAnd to many
others….For their immense support