The World in 2014–Asia


Every year at this time, besides the personal planning I do for the coming year, I relax and read the Economist’s Double Holiday Issue and look through their special report The World in 2014.    I am taking notes on the various articles during the next few days to see what The Economist predicts will be the most significant global events that will take place in the coming year.

Today I am going through the articles on Asia.   One issue that covers the entire continent is that of the crashing of fertility rates, which will finally reach 2.1, the so-called “replacement” rate.   The positive aspects of the falling fertility rates are

  • Higher standards of education
  • Higher living standards
  • Greater female autonomy
  • Demographic dividend, the economic advantage that comes from having relatively fewer children and old people, and more working-age adults

If fertility continues to fall below the replacement rate, however, the two following problems will emerge

  • Economic advantages of favorable demography start to dwindle, including the decline of the working-age population
  • One-child policies create sex-selective abortions, resulting in fewer women of child-bearing age

A.   INDIA

India holds the distinction of having the world’s largest election in 2014, involving 800 million voters.    The electoral campaign will run for eight weeks and will cost billions of rupees.    At the end of the campaign, the election will most likely be a loss for the Congress party currently in power.   The opposition party giving the Congress the biggest run for their money is the Bharatiya Janata Party (BJP), whose frontman is Narendra Modi, the chief minister of Gujarat.   He is pro-business and a Hindu nationalist; this means that there will likely be tension between Hindus and Muslims in the runup to the election.    Modi will probably not garner the 200 or seats needed to become the new prime minister.

This means that there will be a period of fragmented politics as coalitions of smaller parties end up taking control over the government.   This minority government may end up reforming and opening up the economy, while the Congress and BJP wait it out until the next election.

B.  JAPAN

The prime minister of Japan, Shinzo Abe, has accomplished a lot in bringing the long-stagnant Japanese economy to life.   However, he plans to raise the consumption tax from 5% to 8% in the spring, in order to increase government revenue to get the giant amount of debt the government owes more under control.     This will have a temporary dampening effect on the economy, as people try to buy and stock up on goods before the increase takes place.   Growth will probably pick up again, however, in the latter part of 2014.

On the political front, Mr. Abe will try to reach out diplomatically to China and South Korea, but also plans on lifting the ban on self-defense, which will cause Japan’s neighbors who bore the brunt of Japanese militarism in World War II to become nervous.

C.  SOUTH KOREA

The government will complete its move from Seoul to Sejong, the new administrative capital city.

D.  CHINA

One of the significant brewing conflicts in the world is between Japan and China for the possession of the islands known  as the Senkakus in Japan and the Diaoyu in China.   However, both countries being preoccupied with economic problems at home, there will be an attempt to set the dispute aside, if not to resolve it.

The stress on China’s society of sustained rapid economic growth is coming in the form of environmental pollution.  The government will need to start addressing the concerns of the growing middle class for the health of their children in such an environment.

Another problem is that the economic growth has been concentrated on the cities of the coast; the government is trying to make sure that the provinces in the interior start to share in some of that economic growth.

E.  INDONESIA

The government’s growth target for 2013 of 6.3% will be missed, and the government will try to revamp its economy in 2014.   There will be parliamentary elections in April, followed by presidential elections in July.  The front runner is Joko Widodo, the government of the capital Jakarta, who is known by his nickname Jokowi.   He represents a break from the Suharto generation, and would push through innovative policies that aim to stem corruption and create more transparency in government.

F.  AFGHANISTAN

When the coalition forces withdraw at the end of 2014, it may once again become a breeding-ground for terrorists with global ambitions, and will destabilize its already unstable neighbor Pakistan.   However, in April 2014 there will be elections which may persuade the main opposition groups not to take up arms against the victor.   The Taliban will not disappear, but neither will they be powerful enough to take over the country again.   The best hope for peace will come from a power-sharing agreement between the government and the Taliban.

G.  AUSTRALIA
The conservative Liberal-National coalition headed by prime minister Tony Abbott will face weakening economic growth and rising unemployment in 2014.   His will try to abolish the previous Labor government’s carbon emissions tax.   He is also putting up barriers to immigration, which will work against his efforts to be better neighbors with China, and will continue to oppose same-sex marriage.

H.  NEW ZEALAND

There will be an election by November, and the front-runner is John Key, who currently heads a center-right coalition government.   The rebuilding of Christchurch, New Zealand’s second city that was devastated by earthquakes in 2010 and 2011, will proceed apace.

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