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Economics, Finance sector development
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Economics
Middle-income economies: Slowdowns, traps and transitions
The notion of a middle-income trap has generated much interest and discussion, but little consensus. There is no agreement on what the trap is or how long a country needs to be at the middle-income stage to be considered trapped. Much of the current discussion is about growth slowdowns, but is a slowdown the same as a trap? It is also possible that the trap does exist but we do not know what causes it.
People’s Republic of China: The challenge of the middle-income transition
The Chinese economy grew by 7.4% in 2014 and is expected to expand by 7.0% this year. These are impressive growth rates for any country but lower than what has been achieved in the past. For 3 solid decades, since the beginning of market reforms in the late 1970s, the economy expanded by an annual average of almost 10%.
What’s behind the recent oil price drop?
The price of oil has more than halved in the period of less than 5 months since September 2014. After nearly 5 years of stability, the price of a barrel of Brent crude oil in Europe fell from $117.15 on 6 September 2014, to $45.13 on 14 January 2015. Figure 1 shows the movements in the spot price of crude oil from June 2009 to February 2015, including the recent price drop.
Five bond market trends to watch out for in 2015
As 2015 gathers pace, the world seems to be entering a more uncertain and unpredictable phase. With the end of the quantitative easing by the Federal Reserve, we are entering an era of tighter global liquidity. However, this might be offset to a certain extent by more aggressive monetary policy actions from the Eurozone and Japan. The plunge in oil and other commodity prices should help reduce inflationary expectations but could also presage a weaker economic environment. All these point to a more volatile environment, making it a more challenging year for Asian bond markets.
TTIP—is the EU really interested in an “economic NATO”?
Negotiations between the European Union (EU) and the United States (US) on the Transatlantic Trade and Investment Partnership (TTIP) are currently dragging on without a clear time target—no wonder in view of the highly complex topics to agree on. But nevertheless, international speculation is running high about the potential economic and geostrategic implications of the TTIP for the EU’s economic relations with Asia, and the People’s Republic of China (PRC) in particular. Some people even claim it to be the foundation of an “economic NATO” or consider it “a response to the rise of [the PRC]
ASEAN Economic Community 2015: What is next?
In 2007, the 10-member Association of Southeast Asian Nations (ASEAN) bloc adopted the goal of creating an integrated economic region—termed the ASEAN Economic Community (AEC)—by December 2015. However, concerns have been expressed that the regional integration project’s 2015 deadline will be missed due to an overly ambitious timeline and too many ill-thought-out initiatives. With the AEC deadline looming, this article critically assesses the progress that has been made, charts some of the main challenges, and suggests the next steps for the AEC.
Paths to development: Is there a Bangladesh surprise?
Bangladesh’s economy has recorded remarkable economic performance in the new millennium, though its per capita income has remained low. Even more spectacular has been the steady improvement in its levels of many social development outcomes. Popular commentaries have drawn comparisons with India and Pakistan in highlighting the significance of Bangladesh’s development achievements. This phenomenon has been termed as the “Bangladesh conundrum,” and has received extensive coverage in international media outlets, such as the New York Times, the Economist and the Wall Street Journal.
An analysis of challenges faced by Abenomics
In December 2012, Japan’s Liberal Democratic Party won the general election, making Shinzo Abe Prime Minister of Japan, a post that he had previously held in 2007. “Abenomics” refers to the economic policies advocated by the prime minister after the election, which were designed to revive the sluggish economy with “three arrows”: (i) fiscal consolidation, (ii) more aggressive monetary easing by the Bank of Japan, and (iii) structural reforms to boost Japan’s competitiveness and economic growth.
From the Russian Federation’s focus on Europe to its pivot to Asia
The United States’ “pivot to Asia” has been intensely discussed over the last years. But recently, a new pivot model has come up: the Russian Federation’s pivot to Asia. This article analyzes this topic from an economic perspective by asking: Is the Russian economy really about to shift its focus thus far centered on the European Union (EU) to Asia?
Can president-elect Joko Widodo transform Indonesia’s economy?
Indonesia's president-elect Joko Widodo (Jokowi) has declared he aims to push the growth rate of the economy above 7% a year. The growth rate has been running below 6% a year, and the World Bank and IMF predict that it will continue at 5.6% and 5.8%, respectively, in 2015.
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