Best of July in Asia-Pacific
Abe, Asian Godfathers, and Bali
“I may have committed many sins in my life, but I can tell you that stealing is not one of them.”
- Ferdinand Marcos, interviewed in exile by Ted Koppel on ABC Nightline, 4 April 1986
July went by faster than a balinese taxi driver with an open road. I’ve been busy living the dream in Bali1. And sometimes, having a stinker2. But I’ll leave my life for the Final Thoughts section. Let’s get stuck into some juicy Asia-Pacific content for the month of July!
Like the great Charles Barkley would say3, GUARANTEED! Pradyu even nice enough to leave a TL;DR! Whatta legend.
Pakistan’s current economic crisis is caused by a spike in oil and gas prices leading to a sharp drop in foreign exchange reserves. The government has reserves worth a month of imports and would not have met their debt commitments without an IMF bailout.
This is not the first IMF bailout for Pakistan: it’s the 23rd! The problem is not only about this specific crisis, but that the Pakistani economy has extremely poor policy that makes economic growth almost impossible. It is inevitable then, that economic crises happen so often.
The reason why this happens is because the Pakistani elite do not want it! They do not have the incentives to increase economic growth whether due to corruption, military control of the government and or general incompetence [See: Asian Godfathers by Joe Studwell for why and how this happens]. Until this changes, it is very likely that Pakistan will have low economic growth, and inevitably more crises like this
Approximately 500 million people in China (~70% of the labour force) do not have a high school education. By this metric, China is the least educated middle-income economy in the world. Which may derail China’s transition to a high-skill, high-wage economy.
The only destination for China’s unskilled workforce—whether new entrants or laid-off workers—is the informal service sector. Informal employment is currently the fastest-growing sector in China, increasing from 33% in 2004 to 56% in 2017. The rising supply of workers has ushered in stagnating wages for unskilled workers. […] The result may come to resemble Mexico: a case of solid macroeconomic performance, export success, and accumulation of physical capital, yet little growth in the formal economy.
And to the surprise of absolutely no one:
An economically insecure China may turn to nationalism to boost legitimacy.
Abe Shinzo in his own words [paywall]
What a wild month. To me, it feels like this happened a few months ago already. It’s behind a paywall, but if you open the link in incognito and stop the page loading you can read the whole interview. But I’ve pulled the best bits from it below.
Q: As you look back at your time in office, what do you think your legacy will be?
Abe Shinzo: Through Abenomics, we were able to escape from deflation—perhaps not entirely—but still, we managed to escape from it, and create more than 4m jobs to grow the economy. Another legacy is changing the interpretation of the constitution, enabling the country to exercise its basic right to self-defence. Also, I presented the big vision of a Free and Open Indo-Pacific. Finally, the tpp [a multilateral Asian trade pact - te] and the eu-Japan epa [a bilateral trade deal between Japan and the European Union - te] helped create open and free economic zones based on high-level, high-standard [trade] rules.
Q: You stated recently that “a Taiwan contingency is a Japan contingency.” Do you think the Japanese public shares that view?
Abe Shinzo: Japan and Taiwan are only 100km apart. In the event of an armed attack on Taiwan, China would have to enter Japanese airspace in order to secure air superiority. It would definitely trigger a ”critical situation” under the Peace and Security Law, and we would be providing logistical support to the American military. Many Japanese are engaged in business activities in Taiwan. I am sure this will be well understood by many Japanese people.
Ok, a little doom and gloom. But I think the analysis is fair and interesting.
Xi is in trouble because the economy is faltering so profoundly. This is not a temporary cyclical issue. Fundamentally, China cannot deliver on the promises it made its citizens. It cannot make people get rich before they get old. […] Would a confrontation over Taiwan help Xi retain his grip on power? He may think so. Why? Because nothing allows a leader to align the citizens behind them and wrest power from challengers like war. If the Social Credit System isn’t enough to keep Xi’s opponents quiet, the mere threat of war will.
Fuck me dead where do I even start? What a batshit crazy lady.
She speaks neither English nor Russian and is a housewife with only a high school degree.
The hoax started with an innocuous intention. Unable to comprehend scholarly articles in their original language, she pieced sentences together with a translation tool and filled in the blanks with her own imagination. “As the saying goes, in order to defend a lie, you must tell more lies,” she wrote. Before long, they had accumulated into tens of thousands of characters
Stoked with how this one has been received. It’s a fun little story about a chilli sauce, the type of strange niche topic I love to cover.
Lao Gan Ma rarely advertises, has minimal social media strategy, no celebrity partnerships, and the iconic design has never been modernized. “We're selling the flavour, not the packaging,” Tao says.
Lao Gan Ma has developed a powerful brand recognition that most could only dream of.
The Postwar Japan That Shinzo Abe Built [paywall]
“At the time of his death, it appeared that the Japanese people might finally be coming around to Mr. Abe’s vision. Thanks in part to Russia’s war in Ukraine, a robust majority appeared to support higher levels of military spending. After waging what was at times a lonely fight, Mr. Abe died just as the Japanese people were possibly coming to appreciate his vision of a strong state capable of defending the nation in a dangerous world.”
All about Singaporean housing policy. A topic I’ve been in a rabbit hole of late. Singaporean housing is an interesting little beast, and this podcast episode helps highlight a little behind what makes it so.
This episode was actually recorded prior to Abe’s passing. So at least you know there’s no sugar coating. You can also read the transcript.
I think Abe looked at people like his father who came of age as the LDP was dominant during the cold war as having come to accept this idea of a lightly armed Japan. They weren’t pushing very hard for that to change.
But Abe did not like the compromises they made. He thought they too easily accepted a consensus that left Japan as a subordinate partner to the US.
The most efficient way to share videos is through a YouTube playlist. I aim to highlight both well-known channels and some hidden gems. But mostly, I just want to showcase some of the most insightful and interesting videos related to Asia-Pacific for July.
Also, a sneaky reminder to subscribe to my YouTube channel! I post videos fortnightly and you’ll not only learn a tonne but be entertained too.
Absolute banger of a book. The Ferdinand Marcos quote at the start of this email is from it along with plenty of other gems. I don’t want to say it’s confronting, but Studwell definitely isn’t blowing any smoke up the arses of these godfathers. And it’s refreshing to see!
Ok, if you don’t like surfing, this may not be for you. Part travel book, part surfing, and some extremely good writing thrown in for good measure.
[READING] Bali: Heaven and Hell by Phil Jarratt
Learning a tonne about Bali through this book. I always knew it was tourist paradise but never knew it had been one for so long! (since the early 1900’s FYI)
Another month down in Southeast Asia! Me and the missus were in Bali for all of July but got out of the main areas and visited Ubud and Amed. Amed I cannot recommend enough. I could nearly live there. Nearly because there’s no surf there unfortunately, and I’m a gnarly grommet surfer now always chasing tubes.
But for August, it’s looking a bit more varied! Singapore, Malaysia, and Vietnam are all on the calendar. Singapore and Malaysia are whirlwind trips. Catching up with amigos and sourcing some footage for future Allocators Asia videos. Vietnam will be slower and quieter. Plodding around and hopefully smashing out some work I have to do!
But I’ve ranted enough and need to skidaddle, catch ya!
You can find previous posts here. I also interview legends at Compounding Curiosity (new episodes end of this year I swear!), lurk on Twitter @scarrottkalani, and have a Discord server for everything Allocators Asia (I’d love for you to join the cool little community we got going).
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