Asia affected by North Korea and slowing growth: ECR Q1 2013

Jeremy Weltman
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While some of Asia’s 27 sovereigns have enjoyed better fortunes in the risk stakes since December, many others have seen their scores decline.

India, Vietnam, Thailand and Taiwan have all seen improving risk scores so far this year – in India’s case because of much-needed reforms and a budget that aims to narrow the deficit – but several of Asia’s tiger economies, such as Indonesia, Malaysia and South Korea, have moved in the opposite direction.

The North Korean situation is an underlying threat, but to date the main factors influencing South Korea are economic (its monetary policy/currency stability) and political (information access/transparency and the regulatory and policy environment) – the latter stemming from a change of leadership after the election of New Frontier Party candidate, Park Geun-hye, as president and her populist campaign pledges.

Moderate deterioration in China’s risks – the region’s growth engine – have similarly imparted a negative impact for some countries, including the special administrative region of Hong Kong.