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-DemystifyingIndiasBudgetfor2013-14-TheGhostofMaoandConfuciusbehindtheInternetCensorshipin

China

-ASEANsEconomicIntegration(Part2)TheFortnightInBrief(4thMarchto17thMarch)

US:Recoveryvs.Sequestration

TheFebruaryjobsreportreleased8Marchsawnon-farmpayrollemploymentincreaseby236,000jobsinprofessionalandbusinessservices,buildingandhealthcare,furtherpushingunemploymentdown0.2%to7.7%,thelowestlevelssinceDec2008.ThebetterthanexpectedjobsreportamidstsequestrationcutspushedtheDowJonestonewhighs.ConsumersentimentsontheotherhandfelltoitslowestsinceDec2011asconsumerweighedthehigherpayrolltaxand

potentialeffectsofsequester.Manufacturingcontinuestoleadtherecoveryasoutputinfactories,minesandutilitiesedgedup0.7%,exceedingprojections.Housingconstructionisalsoexpectedtoprovidethetailwindpropellinggrowththisyear.

AsiaPacific:ChinasCommitmentandAustraliasDeficit

ChinesePremierLiKeqianghasexpressedtheneedforChinatomaintaina7.5%economicgrowththrough2020todoubleitspercapitaincome.HereiteratedChinasstancetoexpanddomesticdemandandvowedtofightgraftwhilecuttingregulationsandbureaucracy.

Meanwhile,Australiahastakenamassivehittogovernmentrevenue.ThenationalbudgetfellA$4.6billionintodeficitinthefirstmonthof2013,increasingtheshortfalltoA$26.8billion.Thisisowingtoweakergrowth,lowerpricesforAustraliasresourcesandastronglocalcurrency.

EU:SettingPrioritiesfortheEU

EuropeanUnion(EU)leadersmetlastweektoseteconomicandsocialpolicyprioritiesforthe27-nationbloc,withmanycountriesstillstrugglingwithrecessionandrecordunemployment,coupledwithweakinvestorconfidenceintheeuro.KnownastheEuropeanSemester,thesystemaimstoshapepoliciesinlinewithEUgoalsatanearlystage.Forcountriesthathavealreadybrokendeficitrules,theEUwilldealwiththemusingtheexcessivedeficitprocedure.For2013,theeconomicandsocialprioritiesfortheEUare:1)Pursuingdifferentiated,

growth-friendlyfiscalconsolidation.2)Restoringnormallendingtotheeconomy.3)Promotinggrowthandcompetitiveness.4)Tacklingunemploymentandsocialconsequencesofthecrisis.5)Modernizingpublicadministration.

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Copyright 2012 SMU Economics Intelligence Club2

DemystifyingIndiasBudgetfor2013-14

ByMrigankKanoi,SingaporeManagementUniversity

TheCongressPartyGovernment1inIndiaishistoricallyknownforsettingunrealistictargets

inordertofalselykeeptheinvestor-confidencehigh.Whilethiswasnotgivenmuch

importanceduringthedaysofrobustgrowth,asimilarmovewillmostlikelybackfiregiven

thecurrentslowdown.Withthegeneralelectionscomingupin2014,thegovernments

actionswillreceivecloserscrutiny,notonlyfromthevoters,butalsofromtheprivatesector.

WilltheCongressPartyOverpromiseandUnder-DeliverAgain?

Figure1:GDPGrowthandDisinvestment

Source:FrontierStrategyGroup

Giventhehistoricaltrendofover-promisingandunder-delivering(seegraphsabove),Indias

newlyappointedFinanceMinisterP.Chidambaramhassetthebudgetforarelativelyneutral

coursewithnodramaticproposalsorhighlyunrealistictargets.The2013-14UnionBudget

focusesaroundincreasingtheplannedspending,cuttingdownofsubsidies2,andencouraging

moreinvestment.

Companiesshouldbeencouragedbythegovernmentsplantoincreasethesizeoftheoverall

expenditureby16.4%,majorityofwhichwillcomefromincreaseinplannedoutlay(see

graphbelow)whilereducingthenon-plannedexpenditure,whichentailsinterestpayments,

subsidiesanddefence.

Figure2:PlannedIncreaseinGovernmentSpending

18%

29%

7%

22%

30%

50%

0

100

200

300

400

500

2011 2012 2013

DisinvestmentTargetvs.Actual

Planned Achieved

0%

2%

4%

6%

8%

10%

2010 2011 2012 2013

GDP Growth Target vs. Actual

Planned Achieved

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Figure3:UnionBudget2013-14:Highlights

MacroPolicy RecommendedProposals

Infrastructure

Newregulatoryauthoritysetuptospeed-uproadprojects :3000kmofroad

projectswillbeawardedinthefirstsixmonthsof2013-14

DelhiMumbaiIndustrialCorridor(DMIC)tobeprovidedadditionalfunds

TwonewportswillbeestablishedinWestBengal(EasternIndia)andinAndhraPradesh(SoutheasternIndia)

WorkbeginsontwosmartindustrialcitiesinGujaratandMaharashtra

Infrastructuretax-freebondofuptoUS$10billionavailabletoraisefunds

Investments

CabinetCommitteeonInvestment(CCI)setuptospeedfast-tracklarge

projects

CompaniesinvestingUS$20millionormoreinplantandmachinery

between2013and2015willbeentitledtodeductaninvestmentallowance

of15%oftheinvestmentexpense

ConfirmationoftheLandAcquisitionBillwilllikelybringsignificantclarity

forinvestors FurtherinterestratecutsbytheReserveBankofIndia(RBI)likelyto

improvetheinvestmentenvironment

Subsidies

SubsidyasapercentageofGDPisbudgetedtofallby11%

Petroleumsubsidycutbyasharp33%

Fertilizersubsidyhasbeenleftunchanged(flat)

Foodsubsidyincreasedby6%(alreadyaccountsfor35-40%ofthetotal

subsidybill)

DirectTaxes

Effectivecorporatetaxrateforforeigncompaniesrevisedfrom42.02%to

43.26%

CitizenswithanincomeofUS$185,000ormoretopay10%surcharge

Taxreliefforvery-low-incomeindividualsthroughtokentax-credit

Disinvestment

DisinvestmenttargetmorethandoubledtomorethanUS$10billion

Majorityofthetargetistobemetbysellingminoritystakesinthepublic

sectorenterprises

Source:UnionBudget2013-14,TimesofIndia,EconomicTimes

MappingPolicyMovements:FocusonTacklingIndiasFiscalDeficit3

TheFY2014UnionBudgethasreceivedmixedreactionsfromtheprivatesectorasproposed

policychangesappearmorefavourabletocertainsectors,includingagricultureand

manufacturing.Moreover,whileanincreaseinplannedinvestmentsisseenasapositivesign,

theFinanceMinisterhasleftsomeunansweredquestionswhenitcomestotacklingthe

persistentissueofaballooningfiscaldeficit.Thegraphbelownotonlyhighlightstheimpact

ofvariousproposalsonthebusinessenvironment,butalsoconsiderstheirlikelihoodof

implementation,giventhelowleveloftrustintheIndianGovernment.

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Figure4:Impact/LikelihoodofProposals

Source:FrontierStrategyGroup,OwnEstimates

Thepositionsoccupiedbydis-investmentandsubsidiesonthegraphabovetellaninteresting

story.Itisworthmentioningnowthatthesearethetwotoolsbeingutilizedbythe

governmenttoreduceIndiasfiscaldeficit.Whenitcomestosubsidies,theargumentthat

subsidycutswillbedifficulttoimplementisalmostuniversallyacceptable.Whilethe

governmentexpectscutsinpetroleumexpenditure,itisalsolikelytotakeonapopulist

approachinapre-electionyear.Furthermore,thegovernmentssubsidytargetlastyearwas

1.9%ofGDP,whereasrevisedestimatesarewellover2.5%.Failuretoimplementtheplanned

subsidycutswouldresultinthegovernmentovershootingitsNon-PlanExpenditureonce

again.

Movingontodis-investments,thisprocessinvolvesthesaleofthegovernmentsstakein

state-runcompanies.Divestmentreceiptsasa%oftargetforfinancialyears2011,2012,and

2013were57%,45%,and80%respectively.AchievingthetargeteddivestmentofRs.558,140

million(>US$10billion)thehighestevertargetsetisthusunlikelytosaytheleast.This

suggeststhegovernmentmayfallwellshortofcollectingitstargetedrevenue,asitfailstogeneratecashbyusingsubsidycutsanddivestmentsinstate-runcompanies.

KeySignposts:FourMovementstoCloselyMonitorin2013

Followingaresomespecificmilestonesthattheprivatesectorshouldhaveontheirradarfor

2013,inordertogaugethepaceanddirectionofthechangingpoliticalenvironmentduring

thiscrucialpre-electionyear:

1. ParliamentaryDebatesonReformsDuringBudgetSession(FebruarytoMay):

Thebudgetisoneofthemanyavenuesforintroducingpolicies.Assuch,stakeholdersinthe

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Indianeconomyshouldmonitorprogressonthedebatesintheparliamentduringthebudget

sessionwhereitemsthatwerenotmentionedinthebudgetwouldbedebated.Thesewill

includedebateontheGSTreform,implementationoftheland-acquisitionbillandpossible

clarificationofreformsintroducedlastyear.

2. StateLevelElections(MarchtoDecember):Whilethegeneralelectionsaretotake

placein2014,thereareeightstate-electionsthatwilltakeplacein2013.Theseelectionsshouldofferagoodindicationofthevotersopinionofthetwomajorparties;BJPand

Congress.Oftheeight,electionsinKarnataka,MadhyaPradeshandRajasthanwillbecrucial

astheyrepresentrelativelylargernumberofseatsinthelowerhouse.

3. Dis-InvestmentinStateRunCompanies(AprilOnwards):Withthedis-investment

targetbeingmorethandoubledthisyeartoimprovethecountrysfiscalsituation,the

governmentneedstobeginsellingitsstakeinthepublic-companiesasearlyaspossible.The

privatesectorshouldmonitortheamountofmoneybeingraisedthroughthesaleas

comparedtotargets,asthefiscaldeficitiscurrentlyinavulnerablecondition.

4. FurtherUncoveringofCorruptionScandals(Allof2013):TheCongressPartyhas

facedseveralcorruptionscandalsduringitscurrenttenureincludingthetelecom-licenses

debaclewhichcostthecountryUS$40billionandmajormismanagementofthe

CommonwealthGames.UncoveringofanynewlargecorruptionscandalsagainsttheCongress

Partywouldhavestrongnegativerepercussionsontheirgeneralelectionsof2014.

Sources:

1. UnionBudget2013-14,TimesofIndia,EconomicTimes,FrontierStrategyGroup

1TheIndianNationalCongress,commonlyknownasCongress,iscurrentlytheruling

partyandoneofthetwomajorpoliticalpartiesinIndia,theotherbeingtheBharatiyaJanataparty(BJP).

2Abenefitgivenbythegovernmenttogroupsorindividuals,usuallyintheformofacashpaymentortaxreduction,thatisconsideredtobeintheinterestofthepublic.

3Afiscaldeficitoccurswhenagovernment'stotalexpendituresexceedtherevenuethatitgenerates(excludingmoneyfromborrowings).Itdiffersfromdebt,whichisanaccumulationofyearlydeficits.

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TheGhostofMaoandConfuciusbehindtheInternet

CensorshipsinChina

ByTanKwanHong,SingaporeManagementUniversity

TheGhostofMao

In1949,MaoannouncedtheformationofthePeoplesRepublicofChina,afterdecadesofCivilWarandunrest.Confidentthathehadfinallygainedtherespectofhiscomradesandpeoplethroughoutthecountry,Mao,insubsequentyearstriedtoconsulttheChinesepeopleexpectingatworstmildcriticisms.Buttohissurprise,Maoandhispolicieswerereceivedwithanoutpouringofharshcriticisms.Maobecamedisappointedbythereactionstohispolicies,anddecidedtoputanendtoitbylabelingthemrightist1.

ThismoveledtotheadventoftheAnti-Rightistpurge2,whereanyonewhowereopposedtoMaosviews,beitcomradesinthepartyorpeopleinthefarmlands,werepurged.Maodidnot

care.Surroundedbyyes-men,hewasnowfreetopursuehisownpolicies.FewinMaospartyknewwhichdirectionhewouldleadthecountrytowards.Maosloveformovementandupheavalwasevidentfromthewayhebehaved.

AlthoughithasbeendecadessinceMaospassing,theghostofMaostillpersists,atleastintheonlinecommunity.OnthesurfaceitseemedthattheChineseCommunistPartywasdominant,directingChinaconfidentlyandwithgusto-fromhereconomicgrowththroughthemonetarysystemandFiveYearPlans,tointernetcensorshippolicies,andthesocialmediacompaniesthatmanagetheseonlinechannels-chartinganewpathtoChineseglobaldominanceintheNewWorldOrder.

However,deepinsidetheChinesegovernmentlurkedaprofoundsenseofinsecurity,reminiscentofthefeelingsthatMaohadinthe1950swhenhefirsttriedtoconsultthepeople.

TheadventoftheinternetledtoalossofcommunicativecontrolbytheChineseGovernment,makingitverydifficultforthepartytomanageaconsistentanddesirableidentityinfrontofher1.3billioncitizens,andaworldthatcloselyscrutinizesitseverymove.Thissenseofinsecuritysoonledtoapervasivesystemofinternetcontrolseldomseeninadvancedcountries,oreveninChinasEastAsiancounterparts.

SuchamovehighlightedtheinabilityoftheChineseGovernmenttocreateanecosysteminwhichtoengageitspeopleinpeacefulpublicdiscourseonawidevarietyofviews.

Suchinsecuritycanbeinterpretedashavingalackofmutualtrustinitspeople;theverysameperceptionthatMaohaddecadesago.Itisalsoduetothisveryinsecuritythatsuchblockingofsitesandcensorshipoccurred.Censorshipwasthoughttobetheeasiestwayoutwiththelowesttransactionandadministrativecost(intheeconomicsense)tooperate,asopposedtotheperceivedopportunitycostsofpermittingpublicdiscoursewhichisfargreater(duetothecostofriskundertakenthroughthealternativepathofhavingmoredialoguesandopendiscussionsofpolicies).

ThecreationoftheChinesealternatives(Weibo,RenRen,QQ)toglobalsocialmediasiteslikeFacebookandTwittereffectivelyminimizedpoliticalparticipationandinteractionwithforeigners,andChinesenationalslivingoverseasthatmighthaveapotentiallydifferentviewtothatofChinaspoliticalelites.

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So,didthespecterofMaoreallyexistonline?

Toalargeextent,yes.TheChineseGovernment,innotwantingtosufferthesameriskthatMaoundertook,preferredinsteadtotakeacautiousstand.SuchachoicestemmedfromthefactthatAsians,attheirveryheart,arestillasocietyheavilyinfluencedbyConfucianismwherecitizensarenotexpectedtoout-rightlychallengetheEmperor(nowthegovernment),whohasthemandatetoruleovertheland.

AlthoughimperialisminChinahasceasedtoexist,thereremainsanimpliedcompliancebytheChinesecitizens,whereanyoutrightchallengetothegovernmentisneitherexpectednorencouraged.ThisinfluenceofConfucianism3onmanyAsiansocietiesisoneofthereasonswhyauthoritativegovernmentshavethrivedinEastAsiancountries-thinkJiangJieShi,GeneralParkChungHee,andLeeKuanYew.

TheGhostofConfucius

Andlikewise,theghostofConfucianismisalsoareasonwhytraditionally,Asiangovernmentstendtostrugglemorewhensocietalunrestoccurs.Thisstrugglestemsfromthelackofpro-

activenessinstakeholdermanagement,whichisevidentinthecontrastbetweenWesternandEasterngovernmentresponsetosuchsituations.

InWesterndemocracieswherelibertyandrightstofreespeecharethenormandahighdegreeofcomplianceaspreachedbyConfuciusisnotexpected,non-governmentalorganizationsandpublicactivismareseenaspartofthepoliticalarchitectureofthenation.Governments,priortotheirelectiontendtobeproactiveinengagingthesestakeholders(e.g.apoliticianwhoengagesinactivelygarneringsupportandfundsfortheircampaigns,yearsbeforetheelections).

ItisalsoinsuchWesternpoliticalplatformswheretheacademicfieldofcrisisandstrategic

communicationsisdeveloped(aninherentWesternconcepttobeginwith),providinggovernmentsbettermethodstodealwiththeseunrests.ThisexamplefurtherindicatesthatplayersinthesepoliticalplatformsaremorepreparedthantheirEastAsiancounterpartswhenitcomestoproactivelydealingwithsocialandpoliticalunrest.

Incontrast,EastAsiangovernments,toalargerdegreeexpectgeneralcompliancefromthepopulace,andwilltendtoadoptamorepassiveapproachtoquellunrest.Themainmechanismstheyusearealsoprimitive:harshlawsandregulations,aneducationsystemthatencouragescompliancewiththelaw,andevenadoptingcontroloverthemainstreammedia.Suchtacticshaveexistedforcenturies,butdonotworkverywellintheInternetage,wherethelossofcommunicativecontrolbygovernmentsandthemainstreammediahasbecome

increasinglyprevalent,anditseffectswidelyfelt.

DespitetechnologicaladvancesthathavehelpedperpetuateanarguablyWesternconceptofindividualrightstofreespeech,theChinesegovernment,stilllargelyinfluencedbyConfucianismexpectsalmostabsolutecompliancefromitspeople

Inconclusion,pervasiveinternetcontrolsandcensorshipthatareprevalentinChinacanbeseenfromtwodominantangles:TheGhostofMao(intermsoftheCCPnotwantingtorepeatthemistakethatMaomadeinthepast,andtorisklosingmandateofthepeople)andTheGhostofConfucianism(intermsofexpectedcompliancefromitspeople,andsuppressingplatformsthatencouragenoncompliance).Suchviewsareoftenoverlookedbyacademicsand

analystsalike,butarecrucialinidentifyingtheoften-overlookedinsecurityandthelackof

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trustthattheChineseGovernmentstillfacestilltoday,behindthefaadeofherdominantappearance.

1Rightistsadoptapoliticalstancethatacceptsorsupportssocialhierarchyorsocial

inequality.Socialhierarchyandsocialinequalityisviewedbythoseaffiliatedwiththe

Rightaseitherinevitable,natural,normal,ordesirable,whetheritarisesthrough

traditionalsocialdifferencesorfromcompetitioninmarketeconomies.

2TheAnti-RightistMovement,whichlastedfromroughly1957to1959,consistedofa

seriesofcampaignstopurgealleged"rightists"withintheCommunistPartyofChina

(CPC)andabroad.

3Thesystemofethics,education,andstatesmanshiptaughtbyConfuciusandhis

disciples,stressingloveforhumanity,ancestorworship,reverenceforparents,and

harmonyinthoughtandconduct.

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ASEANsEconomicIntegration:LookingattheEU,Should

theASEANRegionIntegrateFasterandFurther?(Part2)

ByNgYongxiang,SingaporeManagementUniversity

Previously,YongxiangprovidedanoverviewofASEANsandEUsintegrationhistories.Inthisissue,hedelvesdeepertoexaminetheEUregionsintegrationhistorytodrawconclusionsfor

ASEAN

TheInitiativeforASEANIntegration(IAI)wasdrawnupin2000tonarrowthedevelopmentgap1,particularlybetweentheASEAN-6andCLMV.Thisinitiativefocusesonfourareasofpriority,namelyinfrastructuredevelopment,humanresourcedevelopment,informationandcommunicationstechnology,andpromotingregionaleconomicintegrationintheCLMVcountriestohelpachievethevisionoftheAEC.Themajorproblemwiththisinitiativeisthelackoffundingandthewithdrawalofambitiouspledges.LackofpoliticalwilltoensuresuccessfulimplementationsofstrategiesisalsoamongsttheissuethatplagueASEAN.TheEUexperiencedsimilareconomicdivergenceinitsmemberstatesduringthemid-stagesofintegrationbutthegapwasgreatlyreducedwithdeliberateandconcertedefforts,aswellastheeffectiveuseofpolicytoolsincludingthatofthestructuralfunds.

Atthenationallevel,thereisconsiderabledifferenceinthetariff1structure.ExcludingSingapore,thetariffstructuresofothercountriesbysectorsvaryprominently.

Figure2:TariffsofASEANCountriesbySectors

Source:UrataandKiyota(2005:Table7.4,p.228).

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Tariffstendtobeinsignificantintheelectronicequipmentandgeneralmachineryindustries,signallingacomparativeadvantageinthesesectors.ForanACUtobesuccessfullyintroduced,thediversityintariffstructuresmustbeharmonized.Otherissuesthatcouldpotentiallyactasdeterrenceincludethepoolingofsovereigntyovertheirowncommercialpolicies,fiscalshockforsomecountriesandthecollectionofrevenuefromtheCET.AnACUiscurrentlynottabledbyASEANbutIemphasizetheneedforittobeimplementedintandemwiththegoalofachievingacommonmarket.Thebenefitsaresummarizedinthenextparagraph.

Firstly,similartothecreationofasinglemarketinEU,ASEANstandstoyieldlargerbenefitsthantheEUwithitsheterogeneouseconomiesanddevelopmentgaps.Secondly,mostefficientpracticesareallowedtodevelopinvariousareasofmicroeconomicpoliciesespeciallyinCLMV.Thirdly,ASEANwouldbemoreattractivetoforeigndirectinvestment.Thisisopposedtothehighertransactioncostsfacedbymulti-nationalcorporationswhendoingbusinesswithintheAFTA.Lastly,ASEANcouldtakeonaunitedfrontatinternationalforumssuchastheWTO,justastheEUhadinprojectingitsinterestsinsuchorganizations.

LookingbeyondthecurrentgoalssetbyASEAN,thefinalstageofeconomicintegrationwouldbetheeconomicunion.ThisrequiresanagreementamongASEANnationstotransfer

economicsovereigntytoasupranationalauthority,unifyingnationalmonetarypoliciesandacceptingacommoncurrency.TheMaastrichtTreaty2signedin1991bytheheadsofgovernmentsintheEUspecifiedthattherespectivecountryseconomicperformancehavetobesimilar.Thisconvergencecriterion,asmandatedbythetreaty,includespricestability,lowlong-terminterestrates,stableexchangeratesandsoundpublicfinances.Furthermore,thetheoryofoptimalcurrencyareasconcludesthatthecountriesinvolvedshouldbeexposedtocommonandsymmetricshocks.

Asmentionedearlier,thediversityineconomicdevelopmentresultsinasymmetricshocksandpossiblyasymmetricresponsesduetoincompatiblefinancialmarkets.Thetrade-offsinvolvedwouldbelossofdomesticmonetarypolicyflexibilityandtheinabilitytouseinflationtoreducepublicdebtinrealterms.TherecentEurozonecrisiscouldbeattributedtotheadoptionoftheeuro.Thesharpfallinlendingratesledtoasignificantincreaseinconsumerlendingandmuchofitwaschannelledintotherealestatebubble.Henceforth,thecostsofintegratingfurtherintoanASEANeconomicunionfaroutweighthebenefitsofexchange-ratestabilityandlowinterestrates.

ThehistoryofEUsregionaleconomicintegrationdoessupportASEANintegration.EUhasexperiencedthegeneralfactorsthathindertheprogressofintegrationforASEAN.TheobjectiveofanAEChasbeenpushedforwardfrom2020to2015.ThisclearlyindicatesthatASEANisintegratingfasterandbeyondtheCEPT-AFTA.However,theoutlinefortheAEC

doesnotincludeacustomsunion.Inthisregard,ASEANshouldseriouslyconsidertheformationofanACUifitintendstointegratefurther.Theproblemofthedevelopmentgapisnotmerelyanobstacleintheprocessofintegrating,butaprerequisiteifASEANtrulyintendstofollowinthestepsoftheEU.

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Sources:

1. Bacha,O.I.(2008).AcommoncurrencyareainASEAN?Issuesandfeasibility.AppliedEconomics,

40,(515-529)

2. Bui,T.G.(Aug,2008).DevelopmentGapsinASEANasCrucialNontraditionalSecurityIssue:A4-I

Approach.ConsortiumofNon-TraditionalSecurityStudiesinAsia.

3. Plummer,M.(Nov,2006).AnASEANcustomunion?JournalofAsianEconomics,17(5),(923-938).

4. Thangavelu,S.M.andChongvilavan,A.(Sep,2009).FreeTradeAgreements,RegionalIntegration

andGrowthinASEAN.

5. Tjhiong,R.(March,2002).ForginganEconomicIntegration:TheCaseofASEAN.

1Atariffiseitherataxonimportsorexports(aninternationaltradetariff),oralistofpricesforsuchthingsasrailservice,busroutes,andelectricalusage(electricaltariff,etc.).

2TheMaastrichtTreatyortheTreatyonEuropeanUnionwassignedon7February1992bythemembersoftheEuropeanCommunityinMaastricht,Netherlands.

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TheS&P500isafree-floatcapitalization-weightedindexpublishedsince1957ofthepricesof500large-capcommonstocksactivelytradedin

theUnitedStates.IthasbeenwidelyregardedasagaugeforthelargecapUSequitiesmarket

TheMSCI Asiaex JapanIndex is a freefloat-adjustedmarket capitalization indexconsisting of10developedand emergingmarket country

indices:China,HongKong,India,Indonesia,Korea,Malaysia,Philippines,Singapore,Taiwan,andThailand.

The STOXXEurope 600 Index is regardedasa benchmark for Europeanequity markets. It represents large, mid and small capitalization

companiesacross18 countriesof theEuropean region:Austria,Belgium,Denmark,Finland,France,Germany,Greece,Iceland,Ireland,Italy,

Luxembourg,theNetherlands,Norway,Portugal,Spain,Sweden,SwitzerlandandtheUnitedKingdom.

Correspondents:

VeraSoh(VicePresident,Publication)vera.soh.2011@economics.smu.edu.sgSingaporeManagementUniversitySingapore

NgJiaWei(VicePresident,Operations) [email protected] SingaporeManagementUniversitySingapore

SamuelOng(PublicationsDirector/Editor)samuel.ong.2010@business.smu.edu.sgSingaporeManagementUniversitySingapore

YingyuZeng(LiaisonOfficer)yingyu.zeng.2010@economics.smu.edu.sgSingaporeManagementUniversitySingapore

NgYongxiang(MarketingDeputy/Writer)

yx.ng.2011@accountancy.smu.edu.sgSingaporeManagementUniversitySingapore

DarrenGohXianYong(Editor)

darren.goh.2010@business.smu.edu.sgSingaporeManagementUniversitySingapore

TanKwanHong(Writer)UndergraduateSchoolofEconomicsSingaporeManagementUniversitykwanhongtan.2009@economics.smu.edu.sg

MrigankKanoi(Writer)UndergraduateLeeKongChianSchoolofBusinessSingaporeManagementUniversitymrigankk.2009@business.smu.edu.sg

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