Abe, Park and Xi Jinping display good economics in East Asia, but questionable politics
After all the recent hoopla about Abenomics in Japan and China's reform under Xi Jinping, South Korea's Park Geun-hye becomes the latest to join the Asian reform club.
When it comes to economic reform, leaders of Asia's largest economies seem far more rational than with their politics.
After all the recent hoopla about Abenomics in Japan and China's reform under Xi Jinping, South Korea's Park Geun-hye becomes the latest to join the Asian reform club. If these leaders are willing to take risks for their countries' economic prospects, you wonder if they could display comparable rationality in their politics and diplomacy.
The daughter of the murdered dictator Park Chung-hee who laid the economic foundations for his country, Korea's first female president no doubt wants not only to preserve but expand on the economic legacy of her father. Shinzo Abe's three arrows - monetary easing, fiscal stimulus and structural reform - received a lot of attention, as did Xi's promise to let market forces play a decisive role in the mainland economy. But the reform package that Park - whose popularity ratings are plunging - unveiled last week arguably could succeed better than the two men's, which have been long on promises but short on details. Maybe more will be disclosed at the annual National People's Congress and CPPCC meetings starting this week. We will see.
Park wants to deregulate Korea's economy by ending preferential policy for favoured large exporters over smaller companies and reining in state-owned enterprises. She recognises national productivity is falling and that the era of easy economic growth is over. These are similar to the problems that China faces. But Xi confronts more intractable and entrenched state-owned interests that are a key barrier to reform.
The three leaders of 21st century Asia have the right diagnoses and right cures for their economies. It becomes a question of whether they have the willpower and ability to carry reform through.
Their economics show the three leaders are rational actors. Funny how when it comes to politics, inflammatory rhetoric, irrationality and nationalism reign. Japan's relations with Korea and China are at their worst in years, and all three leaders have gone out of their way to worsen them. Surely they must realise any regional conflict will undermine whatever economic gains they hope to achieve.
