Elections cast a shadow of uncertainty over Sri Lanka’s economic recovery
Nearly two years after announcing a debt default in the middle of a severe social and political crisis, the Sri Lankan economy is showing the first signs of recovery. Year-on-year inflation dropped sharply to a low of 1.5 percent in October 2023 from its peak of 70 percent a year earlier. Interest rates are edging down accordingly and the highly volatile currency is now fluctuating within an acceptable range.
After the longest and deepest stretch of negative growth — lasting seven consecutive quarters — the economy finally returned to positive growth of 1.6 percent in the fourth quarter of 2023. While the modest recovery may appear underwhelming, it still marks an important milestone for a country that suffered such a harsh economic setback.
The Architect of this semi-recovery, Sri Lanka’s President Ranil Wickremesinghe, is yet to declare his intentions as Sri Lanka heads into the all-important presidential elections in 2024, where voters will decide who will lead the country for the next five years.
Pakistan faces hurdles on path to India-style tech takeoff
Pakistan is pushing an ambitious plan to transform its fledgling IT sector into a core export industry, hoping to save its economy from default and replicate the rise of archrival India.
Industry insiders, however, say the country will have to overcome significant challenges to achieve its goal of fostering an industry worth somewhere between $10 billion and $18 billion — including a habit of shutting off the internet to curb unrest and dissent.
The Caretaker government is laying the groundwork while the nation heads for a general election, now due Feb. 8, although there is talk of a possible delay. The push to expand IT-related exports is part of a wider initiative — spearheaded by the civil-military Special Investment Facilitation Council — to overhaul the Pakistani economy and overcome a chronic fiscal deficit furnished with heavy borrowing. The powerful military establishment is also striving to transform agriculture and improve food security.
With the information technology sector posting annual growth of over 25 percent in the last seven years and surpassing all other service exports in fiscal 2022, the administration is eager to make the most of it.
For many in China, the economy feels like it is in recession
The Night before China’s civil service exam, Melody Zhang anxiously paced up and down the corridor of her dormitory, rehearsing her answers. Only when she got back to her room did she realise she had been crying the whole time.
Zhang was hoping to start a career in state propaganda after more than 100 unsuccessful job applications in the media industry. With a record 2.6 million people going for 39,600 government jobs amid a youth unemployment crisis, she didn’t get through.
“We were born in the wrong era,” said the 24-year-old graduate from China’s top Renmin University.
“No one cares about their dreams and ambitions anymore in an economic downturn. The endless job-hunting is a torture.”
A Crisis of confidence in the economy is deterring consumers from spending and businesses from hiring and investing, in what could become a self-feeding mechanism that erodes China’s long-term economic potential.
China grew 5.2 percent last year, more than most major economies. But for the unemployed graduates, the property owners who feel poorer as their flats are losing value, and the workers earning less than the year before, the world’s second-largest economy feels like it’s shrinking.
Bangladesh’s economic future: a 7-point agenda
Since Bangladesh’s independence in 1971, the country has undergone a notable economic transformation, transitioning from one of the world’s poorest nations to one of the fastest-growing economies. Despite the country’s positive performance in development metrics like the Human Development Index (HDI) and the Sustainable Development Goals (SDGs), the external macroeconomic shocks stemming from the pandemic and the Russia-Ukraine conflict have been detrimental to the nation’s financial vulnerabilities. In the face of the challenges posed by the pandemic in 2020, Bangladesh managed to achieve a positive growth rate of 3.4 percent, out-performing many developing countries and garnering accolades for the ruling dispensation.
How the UAE is making a splash in Indonesia’s clean energy sector
In November of last year, Indonesian President Joko “Jokowi” Widodo officially inaugurated the Cirata solar farm in West Java. Built on a reservoir using thousands of floating photovoltaic (PV) panels, the Cirata facility has a generating capacity of 145 MW which makes it the largest floating solar farm in Southeast Asia.
It also represents an important proof of concept which is that Indonesia is, indeed, capable of building new solar capacity at utility scale when it wants to. Despite years of efforts aimed at jump-starting investment in solar, uptake has been incredibly slow. Could Cirata auger a breakthrough and if so, how?
Built at a cost of around IDR 1.7 trillion (a little over $100 million), Cirata is a joint venture between Indonesia’s state-owned electric utility PLN, and a renewable energy firm from the United Arab Emirates called Masdar. Masdar is the minority shareholder, holding 49 percent of the equity. The remaining 51 is held by PLN through a subsidiary.
Will China let Japan forget its 1980s bubble?
After a dog-off-the-leash start to the year, Japan’s Nikkei 225 Average has advanced to within striking distance of the once untouchable-looking “bubble” high of 38,915 points reached on December 29 1989.
At one time on Wednesday, the difference between current trading levels of the Nikkei and a history-making stride into the unknown shrank to just over 7 percent — a distance that, with the market in this mood, could be eliminated before January is out.
There is, inevitably, a frisson around this proximity. And it is one that has focused attention both on how Japan got (back) here and how much it would mean for the country if its equity markets did, finally, beat that bubble. Less in focus is China’s potentially pivotal role in all this. A big new survey of Japanese companies suggests they may be ahead of the market in recognising this.
Malaysia and ASEAN in 2024: facing challenges with focus and strength
The Tribulations of the last two years — sometimes dubbed a state of global “perma-crisis” — portend a challenging year to come. But with judicious strategies and effective actions, Malaysia and ASEAN can approach 2024 with cautious optimism.
The World economy is being buffeted by supply chain disruptions, high inflation, two wars that see no signs of ending, superpower tensions, and continual climate crises to which global efforts to adapt and ensure a just transition are nascent at best. Combined with China’s continued economic doldrums and the uncertainties caused by a slew of elections worldwide, we can expect slower global economic growth of below 3 percent, as projected by the IMF and many other global institutions.
Nevertheless, Malaysia goes into 2024 backed by steady macroeconomic performance in 2023, with estimated GDP growth of 4 percent, lower inflation and strong momentum in tourism and our key semiconductor exports poised to be lifted by the global technology upcycle. By the third quarter of 2023, Malaysia’s Ministry of Investment, Trade and Industry had approved FDI commitments of RM225 billion (US$48.5 billion), exceeding our full-year target of RM220 billion.
Maldives seeks more Chinese tourists as India backlash hurts its economy
The Maldives, a popular destination for sun-seekers and honeymooners, is facing a tourism crisis after a diplomatic spat with India, its largest source of visitors. The island nation’s president, Mohamed Muizzu, has appealed to China, its second-largest market, to send more tourists to boost its struggling economy.
The Trouble started when some Maldivian ministers made derogatory remarks about Indian Prime Minister Narendra Modi on social media, calling him a “clown”, a “terrorist” and a “puppet of Israel”. The comments were in response to Modi’s post promoting tourism to the Indian island chain of Lakshadweep, which some Maldivians saw as a provocation.
The Insults sparked outrage and boycott calls on Indian social media, leading to a spate of cancellation of reservations by Indian tourists. Some Indian celebrities and politicians also expressed dismay over the comments, citing India’s historically close ties with the Maldives.
PM of Mongolia attends world economic forum
The 54th Annual Meeting of the World Economic Forum (WEF) started in Davos-Klosters, Switzerland, on January 15. Prime Minister of Mongolia Oyun-Erdene Luvsannamsrai participated in the opening ceremony of the Forum, Montsame reports.
Heads of State from more than 30 countries, including Argentina, Belgium, Bulgaria, Israel, Iraq, Ireland, Jordan, Canada, Kenya, Colombia, Latvia, Lithuania, the Netherlands, Poland, Serbia, Ukraine, Hungary, France, Sweden, Sri Lanka, Ecuador and Vice Presidents, Prime Ministers, government members and representatives of international organizations have gathered to discuss pressing issues in the world and determine the short-term and long-term outlook of the global economy. The 54th annual meeting is taking place under the theme “Rebuilding Trust”.
The Prime Minister of Mongolia will pay a courtesy call on the Presidents of Switzerland, Armenia, and Singapore, and will meet the Prime Ministers of the Republic of Korea and Thailand to discuss bilateral relations and economic cooperation between the countries.
Marcos’s first year was a mixed bag for the Philippines
Despite Mixed results in his first year in office, the promising developments in the presidency of Philippine President Ferdinand Marcos Jr should not be overlooked. His notable achievements include the signing of the New Agrarian Emancipation Act, which condoned US$1 billion of debts belonging to 610,054 beneficiaries. He also signed the Regional Specialty Centers Act, which institutionalises the creation of new specialty health centres.
His Administration also granted amnesty to members of various rebel groups, agreed to resume peace talks with insurgents and ordered the recalibration of the infamous National Task Force to End Local Communist Armed Conflict.
The Philippine economy has also done well under Marcos. Inflation subsided from a 14-year high of 8.7 percent in January 2023 to 3.9 percent in December 2023. The Philippines also saw third quarter growth of 5.9 percent, the strongest in Southeast Asia.
Marcos has walked back many of former president Rodrigo Duterte’s more controversial policies. Not only did he admit the drug war abuses during Duterte’s violent populist regime, but his administration also implemented a cleansing of the Philippine National Police. He has broken with Duterte’s China appeasement strategy by being assertive in defending the country’s sovereign rights over the West Philippine Sea.
Saudi Arabia and Singapore aim to enhance strategic partnership in digital economy and tech
Saudi Arabia’s minister of communications and information technology, Abdullah Al-Swaha, held talks with his counterpart from Singapore, Josephine Teo, on the sidelines of the World Economic Forum in Davos on Wednesday.
They Discussed ways to enhance their nations’ strategic partnership in the fields of digital economy, emerging technologies and digital government.
They also highlighted the importance of efforts to encourage innovation and digital development initiatives that fall under the umbrella of the Saudi-Singapore Joint Committee.