It’s only when the tide goes out, as Warren Buffet likes to say, that we learn who’s skinny dipping. The last 12 months saw a bull market in naked swimming among leaders, policy makers, businesspeople and pundits.
Of course, this last group was especially suitless in 2016. The “experts” assured us that Rodrigo Duterte wouldn’t be elected in the Philippines, Brexit couldn’t happen, Donald Trump had zero chance of winning, China would crash, India would impress, Taiwan wouldn’t be much in the news, North Korea would pipe down and Samsung would quickly get its exploding-phone crisis under control. Instead, the media, pollsters and establishment commentators looked like a collective walking lobotomy.
It’s time to look back at a year when so many smart people were caught sans clothes, in the Buffett sense. Without further ado, here are the nominees for our second annual Barron’s Asia “Naked Awards.” Drum roll, please!
Xi Jinping: China’s president punted on the epochal upgrades he’s promised since 2012. Out were Joseph Schumpeter-like reforms, in were moves to accelerate the money-printing press, double down on censorship, lock up political opponents and troll neighbors from Japan to Singapore. What’s more, China’s $9 trillion bond market went haywire, raising hard landing risks. All that, while pledging “reformist” China’s rise would be “peaceful” and “benevolent.” Clearly, those words mean something different in Beijing than everywhere else.
Rodrigo Duterte: In just 176 days, the Philippine president changed the narrative from pro-growth reforms to machine guns. His bloody war on those with supposed ties to the drug world has some watchdogs tiptoeing up to accusations of genocide. Credit-rating agencies, meanwhile, are aghast at how quickly an emerging-market darling seems to be returning to the chaotic days of the 1980s. There’s also a here-goes-the-neighborhood vibe as the “Trump of Asia” naively cozies up to China in ways that worry Southeast Asian peers.
Barack Obama: The outgoing U.S. president saw his much-ballyhooed Asia pivot unravel. First, a flurry of leaders opted for Beijing over Washington from the Philippines to Malaysia. Then Trump vowed to kill Obama’s Trans-Pacific Partnership and flirted with Taiwan independence. China is delighted by the former, enraged by the latter, and bracing for Trump’s pivot to a trade war footing. Japan and South Korea, too, are in the dark about whether Trump has their backs should the tide go out on Asian peace or Pyongyang attack.
Park Geun-hye: The impeachment of South Korea’s president was a spectacular turn of events for the daughter of Park Chung-hee. Many are nostalgic for the strongman’s 1963-1979 tenure, which planted the seeds for the boom that followed. At its core was a handful of family-owned conglomerates. In 2012, Park pledged to reduce their dominance — only to get caught, through an emissary, allegedly shaking down those corporate giants for tens of millions of dollars. Her influence-peddling crisis may set back progress many years.
Najib Razak: Malaysia’s prime minister beat all odds by clinging to power amid controversies that might unseat anyone else. What started with $700 million the Wall Street Journal found in his private bank accounts morphed into an international scandal over billions of dollars missing from state fund 1Malaysia Development Bhd. Neither myriad investigations around the globe nor former leader Mahathir Mohamad demanding his resignation ousted a leader dragging his nation’s reputation through the mud.
Shinzo Abe: Where to start, as the Japanese leader’s four-year old Abenomics policies remained in first gear, Russia’s Vladimir Putin played him on territorial disputes and Trump ignored his pleas to ratify the Trans-Pacific Partnership? Abe got outmaneuvered by Tokyo’s first female governor, Yuriko Koike, who delayed moving Tsukiji fish market and challenged the 10-fold jump in spending on the 2020 Olympics. It stung, too, that two major gender milestones — Koike’s election, and that of opposition leader Renho — occurred no thanks to Abe and his flagging “womenomics” push.
Samsung: South Korea’s most prominent conglomerate earned a truly dubious honor: fire hazard. The Samsung brand took a colossal hit when its Note 7 forced airplane evacuations and got banned from hotel rooms around the world (the replacement gadgets exploded, too). Even good news out of Samsung skewed bad. Promising as it was to see de facto company leader Jay Y. Lee take advice from hedge funds to return 50 percent of free cash to shareholders, Lee resisted splitting the company in two.
Narendra Modi: India’s prime minister earned this nomination for unintended consequences from a well-intended policy — and shares it with Japan’s Haruhiko Kuroda and China’s Xu Shaoshi. Modi’s move to take big currency notes out of circulation fomented chaos. Bank of Japan head Kuroda’s negative-rate gambit boosted the yen and savaged banks. Moves by Xu’s National Development and Reform Commission to cap coal prices unleashed a destabilizing spike instead. If these kinds of policy failures continue in the 12 months ahead, billions of Asians could feel awfully exposed. Naked, even.
William Pesek is executive editor of Barron’s Asia and writes on Asian economics, politics and markets. www.barronsasia.com
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