Good morning. Here's my take on some of the stories driving the debate in politics, finance and social issues across Asia today:
Lower corporate taxes coming to Japan.
Shinzo Abe is finally delivering on one of his pro-market policy pledges: lower corporate taxes. in 2015, he plans to start cutting the rate from nearly 36 percent to under 30 percent, spreading the reductions out over a few years. It's the centerpiece of the Japanese prime minister's initiative to boost growth. But Abe should use the momentum that getting senior lawmakers onboard affords to implement other key pillars of Abenomics, including liberalizing labor markets, cutting trade barriers and empowering women. Lower taxes won't end deflation -- only a bold set of restructuring moves can do that.
The IMF's false confession?
Call it Christine Lagarde's Horst Koehler moment. In 2003, when Koehler had Lagarde's job as head of the International Monetary Fund, he admitted some of the institution's mistakes during the 1997 Asian financial crisis. Most interestingly, the IMF said Malaysia's moves to impose capital controls weren't crazy after all. Now, Lagarde finds herself on the receiving end of London's ire for the IMF's longstanding criticism of Prime Minister David Cameron’s austerity measures. Count Ashoka Mody of Princeton University among those who think Lagarde was wrong to confess the IMF's error: "By bowing to the UK’s pressure, the fund undermined its only real asset -- its independence."
And the world's most expensive city is…?
Caracas, it turns out, followed by Oslo and the Angolan city of Luanda. Most surprising about this list by global staffing firm ECA International is that it doesn't put Tokyo, Singapore and Beijing among the top 10 pricey locales for expatriates, when many other surveys over the last year ranked all three at, or near the top. That's news to us here in Asia's most hyper-expensive cities!
Thai baht says all's well in Bangkok.
Odd as it sounds, Thailand’s currency has now erased its losses since a May 22 coup. It seems an end to seven months of street protests and a planned pickup in government spending are helping attract overseas funds to the nation’s assets and boosting national confidence. Hm, maybe the coup masters are better economic planners than I thought. Or not.
Shinzo Abe's wining and dining.
Japan's prime minister is employing a new weapon against the nation's reporters, columnists and editors: dinner. In this New York Times op-ed, Waseda University's Norihiro Kato looks at Abe'e penchant for wining, dining and spinning influential members of the media when controversies emerge, like his December visit to Yasukuni Shrine and the April sale-tax increase. "Abe," Kato writes, "has outdone previous prime ministers in exploiting this tendency. How much further can he go before Japan has no more newspapers its citizens will respect?"
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