Client update: key events in Asia and the wider context
07 April 2022
Russia’s invasion of Ukraine has further dampened the economic prospects for developing countries in Asia, meaning lower economic growth and higher poverty. In the past few days, some countries in Asia have been witnessing significant local economic stress and political turmoil, bringing further uncertainty to the region.
• On 5 April, Chinese authorities extended a lockdown in Shanghai to cover all 26 million people, despite growing anger over quarantine rules. The lockdown could be particularly costly for the world’s second largest economy and will cause further disruption to the global supply chain. As well as being a leading finance centre and the world’s busiest shipping port, Shanghai is a hub for semiconductors, electronics, and car-manufacturing.
• On 4 April, Carrie Lam, Hong Kong’s Chief Executive, said she would not seek a second five-year term in office. The front-runner to succeed her, John Lee, is a former deputy police commissioner who headed the city’s Security Bureau for five years from 2017. He is likely to give Beijing even greater control over the city.
• On 3 April, Sri Lanka’s entire cabinet was effectively dissolved due to mass resignations by top ministers. This followed nationwide protests over energy blackouts, shortages of essential goods and soaring prices. The crisis is deepening as President Gotabaya is resisting pressure to stand down. The country is now seeking debt-restructuring with China and India and financial support from the IMF. More protests can be expected in the coming weeks.
• On 3 April, Pakistan’s Prime Minister Imran Khan blocked a no-confidence vote against him by dissolving the Parliament and calling for fresh elections, pushing the country into a constitutional crisis. A strident critic of the West, Khan had claimed the vote was part of a US-led conspiracy to remove him. On 07 April, the Supreme Court ruled that the prime minister’s dissolution of parliament was unconstitutional. With a no-confidence vote now set for Saturday 09 April, Khan must face his greatest test as a politician.
Given these developments, businesses will need to be on the constant lookout for physical security risks and supply-chain disruptions. They should also thoroughly track changes in the distribution of political influence and economic resources among elites. That includes, among other things, seeking to understand everchanging and intertwined geopolitical and geoeconomic relationships and situations.
For more information on Audere’s services in Asia, please contact:
Vivien Li, Senior Case Manager: [email protected]