The world economy is nearing a series of turning points; but the timing of the turns is wholly uncertain. No one is sure when the US and UK will raise interest rates, when the Chinese economy will finally run out of steam or when the European Central Bank and Bank of Japan will end their bouts of quantitative easing. One fact appears assured. Asia’s weight in the global economy will be higher in 10 years than it is now. In this month’s issue, coinciding with the IMF and World Bank spring meetings in Washington, Julia Leung and David Marsh describe how a series of Asian monetary precepts is moving to the fore in world finance, at the same time as China is challenging US supremacy in the Bretton Woods institutions and mounting a drive for the renminbi to join the Special Drawing Right.
Amid the relative success of the continent’s new path, Asia itself faces many unresolved questions (some of which we will be laying out in detail in the May Bulletin). At the heart of many questions is the need to steer a mid-path between contrasting or opposing forces. Fresh from the inaugural Bank Negara-OMFIF KL Debate in the Malaysian capital, Michael Plummer and Chin Leng Lim focus on the balance between regionalism and multilateralism in international trade. Fabrizio Saccomanni and Pascal Lamy reflect on the difficulties of finding the right equilibrium between domestic repairs and international reforms for fixing the world economy. Darrell Delamaide extends the never-ending saga of Fed pondering over tighter credit. Moorad Choudhry underlines the harm done to bank profitability by low interest rates. Eduardo Borensztein, David Marsh, Chris Golden and Con Keating dwell on different aspects of the Greek debt imbroglio. Using similar arguments to those from Greek politicians (and underpinned by some German commentators) Simon Tilford says Germany bears part of the blame for European imbalances, which are damaging the country’s own interests. Ted Truman spells out the sobering lessons for the IMF’s ‘exceptional access’ facility from Ukraine’s debt accord. John Kornblum warns that, in the aftermath of the Russian invasion, the west risks losing a propaganda war with President Vladimir Putin.
In our detailed currency reports, Jamie Bulgin notes Russia’s monetary reserve decline is part of a general drop in international reserves, reversing a decade-long rise. William Baunton explores differences in methodology between the UK’s national statistics office and the Bank of England recording Britain’s balance sheet with the rest of the world. Jeffry Frieden expounds the effects of currency fluctuations on emerging market debt dynamics. John West warns on China’s debt build-up. Staci Warden reports on encouraging signs of capital markets integration in east Africa, which she says can set off self-feeding gains in economic prowess. Qatar Central Bank Governor Abdullah Saud Al-Thani explains his country’s resilience to falling oil prices, George Hoguet reviews a guide for picking skilful managers, William Keegan says the UK is at the mercy of centrifugal forces, and Kishore Mahbubani bids farewell to Lee Kwan Yew.