THE AGE OF POST-COVID AUSTERITY

Hello from Tokyo. I am back from a short summer vacation, but Japan's scorching summer is not over yet. According to the Japan Meteorological Agency, the hot weather is likely to continue until as late as the first half of October.	View in browser
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	Editor-in-chief's picks August 25, 2023

	Hello from Tokyo. I am back from a short summer vacation, but Japan's scorching summer is not over yet. According to the Japan Meteorological Agency, the hot weather is likely to continue until as late as the first half of October. Our Big Story this week focuses on another very hot island nation: Sri Lanka. Summers in the South Asian country are sweltering, and compounding the discomfort there this year are major debt restructuring moves aimed at winning continued support from the International Monetary Fund. Rising prices and government spending cuts are making people's lives on the island increasingly difficult. The story highlights the country's "new poor," a description used by seasoned analysts and grassroots campaigners as a dire economic picture emerges in the wake of the COVID-19 pandemic. Sri Lanka early last year became the first Asian country in nearly two decades to declare bankruptcy, resulting in a historic sovereign default and an economic meltdown that ultimately forced then-President Gotabaya Rajapaksa to flee the nation in July 2022. It's been more than a year since then, and from what I hear from diplomats and journalists there, the dust from those dramatic times has mostly settled. But the story makes it clear that the crisis is far from over. The story also examines whether the IMF's policies are actually benefiting the country. Officials from Japan, Sri Lanka's second-largest creditor, argue that the nation's deteriorating debt situation has historical roots and is essentially the result of fiscal overreach to achieve economic stability amid long-standing sociopolitical uncertainty. But it is also true that the pandemic crisis has dramatically changed the course of recovery. This week's Asia Insight also features an island nation: Papua New Guinea. PNG has been in the spotlight recently with a series of visits from U.S. and French dignitaries. Rurika Imahashi, our Sydney bureau chief, visited the Pacific island nation to find out why it has become so geopolitically important and how its prime minister, James Marape, has become a power broker between big nations. The war in Ukraine has highlighted the significant role that drones now play in modern warfare. One of the companies that has expanded to meet this demand is Baykar Technology of Turkey. In this week's Business Spotlight, Nikkei Asia interviewed the company's chairman and chief technology officer, who also happens to be President Recep Tayyip Erdogan's son-in-law, to understand how Baykar has managed to establish a dominant technological presence in the defense industry. While I have written mostly about geopolitical stories so far, the most prominent news when it comes to the global economy right now is undoubtedly about China. News outlets around the world are rushing to report on the worrying signs coming from the world's second-largest economy. As an Asian media player, we have published countless insightful stories on this important topic. For the second week in a row, our Market Spotlight has focused on the Chinese property market, marked by the poor performance of companies such as China Evergrande Group and Country Garden. The property woes raise questions about the validity of China's current economic development model. Lastly, from the Life & Arts section, this week's Tea Leaves piece is about Thailand, which recently elected a new prime minister. The story itself is not about the country's political turmoil, but it talks about how the city of Bangkok has changed over the past decade or so, as illustrated by the recent documentary, "The Last Breath of Sam Yan." I still remember feeling the "breath" of vibrant Asia when I first visited Bangkok in the early 2010s. It would be a shame to see it replaced by shiny mixed-use developments or mass-transport extensions. Wishing you a wonderful weekend! Shin Nakayama Editor-in-chief, Nikkei Asia
	The editor's choice Sri Lanka enters a new era of post-pandemic austerity Encouraged to borrow during lockdowns, many poor countries face harsh consequences as priorities change Read more Papua New Guinea's Marape: Pacific power broker or PM in peril? Amid U.S.-China balancing act, PNG leader faces mounting pressure at home Read more Turkish drone maker Baykar seeks to extend global influence Unmanned aerial vehicles made in Istanbul prove valuable in 'asymmetric war' Read more China's property downturn spreads to trophy office buildings Vacancies rise at top Beijing and Shanghai towers as tenants seek lower rents Read more How a Bangkok shrine became a gentrification battlefront Students make a principled stand against university's property arm Read more
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