Asia Economist and CEO, Centennial Asia Advisors

Manu Bhaskaran

Mr. Bhaskaran is a leading Asian economist based in Singapore with more than 30 years of experience in studying economic, political and security issues that shape the business environment in Asia. He co-ordinates the Asian business of Washington DC-based strategic advisory firm, Centennial Group, directing its Asian economic research practice which provides in-depth analysis of macro trends in Asia. He works extensively with investment institutions, government agencies and corporations. Mr. Bhaskaran regularly presents his views on the economic, political and business environment in Asia at business conferences and in-house briefings. He has conducted studies on a wide range of subjects including: consumer finance in Asia; Asian integration; regional and country-specific political and economic outlooks; the Impact of China on Asia; portfolio capital flows in emerging markets, amongst many others. He is as a member of the Regional Advisory Group for Asia and the Pacific of the International Monetary Fund. Mr. Bhaskaran is a regular columnist for The Edge (Singapore) and holds positions in think tanks including being Adjunct Senior Research Fellow at the Institute of Policy Studies (IPS); Vice President of the Economics Society of Singapore, and Council Member of the Singapore Institute of International Affairs (SIIA). Mr. Bhaskaran serves on the boards of CIMB Investment Bank and Japfa Limited.

Asia Economist and CEO

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Macroeconomics

<ul style="list-style-type: square;">
<li>The crisis will leave public debt levels much higher, a damaged credit culture, deficiencies in the labour market and capital stock eroded to some extent.</li>
<li>Taiwan, Korea, Vietnam, Thailand, China and Singapore come out looking stronger than the rest of the pack (Table 1). These countries are marked by relatively strong state capacity.</li>
<li>Indonesia, India, the Philippines and Malaysia, however, are in a weaker position. Rising NPLs, elevated debt ratio and significant labour and capital scarring will plague these economies moving forward.</li>
</ul><h3>Table 1: Z-scores for metrics on economic scarring in East Asia</h3><table class="table table-striped"><tbody>
<tr>
<td style="width: 75.1pt;"> </td>
<td style="width: 75.1pt;">NPL ratio (%)</td>
<td style="width: 75.15pt;">Debt ratio (% of GDP)</td>
<td style="width: 75.15pt;">Labour scarring (% deviation)</td>
<td style="width: 75.15pt;">Capital scarring (% deviation)</td>
<td style="width: 75.15pt;">Z-scores, the higher the better</td>
</tr>
<tr>
<td style="width: 75.1pt;">Taiwan</td>
<td style="width: 75.1pt;">0.2</td>
<td style="width: 75.15pt;">33.8</td>
<td style="width: 75.15pt;">-3.2</td>
<td style="width: 75.15pt;">9.4</td>
<td style="width: 75.15pt;">3.3</td>
</tr>
<tr>
<td style="width: 75.1pt;">Korea</td>
<td style="width: 75.1pt;">0.5</td>
<td style="width: 75.15pt;">43.8</td>
<td style="width: 75.15pt;">-3.8</td>
<td style="width: 75.15pt;">4.1</td>
<td style="width: 75.15pt;">2.0</td>
</tr>
<tr>
<td style="width: 75.1pt;">Vietnam</td>
<td style="width: 75.1pt;">2.1</td>
<td style="width: 75.15pt;">55.3</td>
<td style="width: 75.15pt;">0.6</td>
<td style="width: 75.15pt;">4.1</td>
<td style="width: 75.15pt;">1.6</td>
</tr>
<tr>
<td style="width: 75.1pt;">Singapore</td>
<td style="width: 75.1pt;">2.3</td>
<td style="width: 75.15pt;">-</td>
<td style="width: 75.15pt;">-12.3</td>
<td style="width: 75.15pt;">-1.7</td>
<td style="width: 75.15pt;">0.8</td>
</tr>
<tr>
<td style="width: 75.1pt;">Thailand</td>
<td style="width: 75.1pt;">3.1</td>
<td style="width: 75.15pt;">52.1</td>
<td style="width: 75.15pt;">-0.2</td>
<td style="width: 75.15pt;">1.8</td>
<td style="width: 75.15pt;">0.8</td>
</tr>
<tr>
<td style="width: 75.1pt;">Indonesia</td>
<td style="width: 75.1pt;">3.3</td>
<td style="width: 75.15pt;">39.4</td>
<td style="width: 75.15pt;">-2.2</td>
<td style="width: 75.15pt;">-2.2</td>
<td style="width: 75.15pt;">0.5</td>
</tr>
<tr>
<td style="width: 75.1pt;">China</td>
<td style="width: 75.1pt;">1.9</td>
<td style="width: 75.15pt;">73.7</td>
<td style="width: 75.15pt;">-5.1</td>
<td style="width: 75.15pt;">-</td>
<td style="width: 75.15pt;">-0.9</td>
</tr>
<tr>
<td style="width: 75.1pt;">India</td>
<td style="width: 75.1pt;">7.5</td>
<td style="width: 75.15pt;">77.6</td>
<td style="width: 75.15pt;">2.8</td>
<td style="width: 75.15pt;">8.7</td>
<td style="width: 75.15pt;">-1.2</td>
</tr>
<tr>
<td style="width: 75.1pt;">Philippines</td>
<td style="width: 75.1pt;">4.5</td>
<td style="width: 75.15pt;">57.0</td>
<td style="width: 75.15pt;">-5.8</td>
<td style="width: 75.15pt;">-18.3</td>
<td style="width: 75.15pt;">-3.4</td>
</tr>
<tr>
<td style="width: 75.1pt;">Malaysia</td>
<td style="width: 75.1pt;">1.6</td>
<td style="width: 75.15pt;">62.2</td>
<td style="width: 75.15pt;">-12.4</td>
<td style="width: 75.15pt;">-16.9</td>
<td style="width: 75.15pt;">-3.4</td>
</tr>
</tbody></table>


The crisis will leave public debt levels much higher, a damaged credit culture, deficiencies in the labour market and capital stock eroded to some extent.
Taiwan, Korea, Vietnam, Thailand, China and Singapore come out looking stronger than the rest of the pack (Table 1). These countries are marked by relatively strong state capacity.
Indonesia, India, the Philippines and Malaysia, however, are in a weaker position. Rising NPLs, elevated debt ratio and significant labour and capital scarring will plague these economies moving forward.
Table 1: Z-scores for metrics on economic scarring in East Asia

 
NPL ratio (%)
Debt ratio (% of GDP)
Labour scarring (% deviation)
Capital scarring (% deviation)
Z-scores, the higher the better


Taiwan
0.2
33.8
-3.2
9.4
3.3


Korea
0.5
43.8
-3.8
4.1
2.0


Vietnam
2.1
55.3
0.6
4.1
1.6


Singapore
2.3
-
-12.3
-1.7
0.8


Thailand
3.1
52.1
-0.2
1.8
0.8


Indonesia
3.3
39.4
-2.2
-2.2
0.5


China
1.9
73.7
-5.1
-
-0.9


India
7.5
77.6
2.8
8.7
-1.2


Philippines
4.5
57.0
-5.8
-18.3
-3.4


Malaysia
1.6
62.2
-12.4
-16.9
-3.4



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