Sharp Slowdown in Asia Nears – WSJ.com
… in the past 10 years, Asia has doubled down with its bet on exports as an economic engine — at the expense of developing a domestic consumer market that many economists believe will ensure more sustainable growth.
Exports accounted for 47% of gross domestic product in Asia, excluding Japan, in 2007. That is a jump of 11 percentage points from the comparable figure in 1998, during the last economic crisis in the region, notes Stephen Roach, Morgan Stanley’s Asia chairman. Asia “may not be levered in the strict sense of reliance on global credit,” says Mr. Roach. “But it’s certainly levered to the global economy.”
The Indian difference
India is an exception in this regard – more due to the entrepreneurial drive of Indians rather than design. Government was pushing for FDI – whereas the Indian entrepreneurs were pushing the Government for opening of foreign investments in domestic equity, VC, debt, infrastructure, markets.
FDI investments in India were less than US$100 billion – and came with many tax concessions, licensing, royalties and most importantly, ceding large sectors of economy to MNCs.
But equity investments in Indian markets, fuelled an investment boom in India – which is supporting Indian enterprise.