From the Editor
Hegel once said, and Marxists who use his dialectical system often repeat, "quantity becomes quality." How ironic (or perhaps it is the result of Hegelian synthesis?) that today it is the capitalists for whom this phrase seems most apposite. For 2007 was the year when flows of international finance into China and India reached a critical mass, and the government barriers to integration of their corporate sectors with international management came tumbling down.
In this issue, Ken DeWoskin and Chris Cooper explain how the success of state enterprises' IPOs convinced the Beijing leaders that financial markets could promote the process of building world-beating companies. The combination of China's pool of excess savings with local and foreign private-equity firms is starting to fund the expansion of ambitious enterprises onto the global stage. Within just a few years, China will go from having no brands with international reach to having representatives on the top lists in almost every sector.
Meanwhile in India, as Alina Bakunina writes, last year saw inflows of private-equity money double. That combined with plenty of portfolio investment flowing into the domestic stock market allowed Indian companies to begin a similar global shopping spree. In both countries, the governments which once tried to hold the commanding heights of the economy are embracing the flat world; instead of trying to keep capital from fleeing, they have the opposite problem of managing large inflows of investment.
Unfortunately, not every country in Asia has turned the corner and enabled its people to create sufficient opportunities at home. For instance, Minh Pham and Katarina Harrod show Sri Lanka has become dependent on the remittances of its overseas workers.
As part of our ongoing efforts to explain and predict these divergent outcomes, we present our second Barometer of Asian Development. This year we highlight several indexes produced by reputable organizations that focus on one or more aspects of competitiveness. We hope that this convenient collection of information will prove useful to readers.
As part of our ongoing revamp of the review Web site, which will culminate in the spring with a totally new design, we are adding a regular page to the magazine highlighting our free online content. Please visit www.feer.com and offer your comments and suggestions.
Our next issue will be published on March 7, after the lunar new year holiday. We wish all our readers a happy and healthy beginning to the year of the rat!
H.R.
