From the Editor
Over the last few months, you have no doubt perused our Web site for free content, www.feer.com/forum, a summary of which is found on page six. Well, that was just an amuse-bouche; get ready for the full banquet. We are preparing to go live in the middle of March with a relaunch of our main site, www.feer.com, which will supply you with the same high-caliber comment and analysis found in the review, now on a daily basis.
As we went to press, the Indian budget was in the news, with the government serving up a hodge-podge of concessions to various politically important interest groups, instead of charting a strategic course to future growth. One of our favorite lines to explain what’s going on in U.S. financial markets these days comes from Warren Buffett: “It’s only when the tides goes out that you learn who’s been swimming naked.” To extend the metaphor to the world of policy, India’s rapid growth is allowing politicians to do some skinny-dipping.
As Andrew Chen and Jennifer Warren write in this issue, infrastructure bottlenecks continue to be a concern for the future. Yes, it’s true that Delhi has begun to address the problem. And just back from a tour of Rajasthan over the lunar new year, we can attest to the fact that India is building some wonderful new highways. But compound the current double-digit GDP growth over a few years, and you realize that India still needs to ramp up its infrastructure spending in a fairly dramatic way.
Meanwhile, social discontent is an issue that many outside observers do not give enough weight to, and this may explain why the government is spending so much on giveaways. The REVIEW’s Deputy Editor Colum Murphy has been in West Bengal and reports back that despite a new push to attract industrial projects like the Tata Nano factory, resistance to the private sector remains strong. The Communist Party-governed state’s struggle to overcome its statist legacy offers an object lesson for the rest of the country, as well as foreign investors.
Meanwhile China is facing new challenges brought on by past successes. As Jonathan Anderson writes, the threat of inflation is probably over-hyped, since the price rises have been confined to certain very volatile sectors. But at the same time factories on the coast are being squeezed by rising wages for migrant labor, as Alexandra Harney, Jonathan Adams and Ko Shu-ling discuss. Together with higher taxes, a new labor law and an appreciating currency, this pressure on low-margin manufacturers is forcing a restructuring which may be painful but will undoubtedly be beneficial in the long run.
H.R.
