Tuesday, April 12, 2011

Inflation a worry across Asia

I read a very interesting news today in Wall Street Journal.As we know that HongKong is one of the richest economies in the world and is just the next in the ladder to US.it has got so much of money that it is literally giving away cash to its citizens after the upcoming elections..Each HongKong citizen will be entitled to HKD771.The good news is that the country's GDP is growing at 5%annually but at the same time the internal situation is very fragile.There is an increasing disquieting business class over the rising bureocracy and the government's out of touch with the locals.
At the time when the country is attracting the foreign businesses and FDI in tune of billions of dollars there is a rising divide between highly paid and lowly paid workers.The land prices are skyrocketing.Last year it increased by 24% and last to last year it was 30%.The 'sandwich' class is getting sandwiched all the more.
I see there being an inherent problem with all those countries who have pursued the policy of opening the FDI and FII inflows.It increases inflation and the money gets unevenly divided among rich and poor.Oil prices are rising,headline inflation is just at dangerous mark...I ask,where are we going?
I don't think that the situation will be dissimilar for Singaporeans if this government too carefully evaluates this dichotomy.inflation is in single digits here but it is increasingly marginally on Yon basis.
just a food for thought!

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