Banyan Now for the soft part The heyday of “factory Asia” may be ending sooner than anyone thought Oct 6th 2012 | from the print edition; The Economist PARK JAE-SANG has shown the way forward. The South Korean rapper, known as PSY, this week topped the pop charts in Britain and lay second in America. His gloriously inane video, “Gangnam Style” (with some 350m online viewings so far), has proved that Asia’s economic powerhouses can lead the world in exporting intangible goodies as well as things you can drop on your foot. Facing an alarming economic slowdown, much of Asia needs to learn the lesson: service industries are the future. That is a crude summary of the latest “Outlook” for the region published this week by the Asian Development Bank (ADB). For almost the entire region, it is far gloomier than the ADB’s previous forecast in April—if still startlingly perky by Western benchmarks. In Asia as a whole, excluding Japan, economic growth this...

Buttonwood The secrets of Buffett’s success Beating the market with beta Sep 29th 2012 | from the print edition The Economist IF INVESTORS had access to a time machine and could take themselves back to 1976, which stock should they buy? For Americans, the answer is clear: the best risk-adjusted return came not from a technology stock, but from Berkshire Hathaway, the conglomerate run by Warren Buffett. Berkshire also has a better record than all the mutual funds that have survived over that long period. Some academics have discounted Mr Buffett as a statistical outlier. Others have simply stood in awe of his stock-picking skills, which they view as unrepeatable. But a new paper * from researchers at New York University and AQR Capital Management, an investment manager, seems to have identified the main factors that have driven the extraordinary record of the sage of Omaha. Understanding the success of Mr Buffett requ...

Rethinking the welfare state Asia’s next revolution Countries across the continent are building welfare states—with a chance to learn from the West’s mistakes Sep 8th 2012 | from the print edition; The Economist ASIA’S economies have long wowed the world with their dynamism. Thanks to years of spectacular growth, more people have been pulled from abject poverty in modern Asia than at any other time in history. But as they become more affluent, the region’s citizens want more from their governments. Across the continent pressure is growing for public pensions, national health insurance, unemployment benefits and other hallmarks of social protection. As a result, the world’s most vibrant economies are shifting gear, away from simply building wealth towards building a welfare state. The speed and scale of this shift are mind-boggling (see article ). Last October Indonesia’s government promised to provide all its citizens with health insurance by 2014. It is building the bi...

FEATURES / Independence Special 2012 | Aug 27, 2012 | 15274 views Credible India by Sundeep Waslekar Hope is the most important input for growth in any country. All hope asks for is focus to build a nation that is humble, compassionate and above all else, a great one Stone me for saying this. But say, I must. The great Indian obsession with wanting to be a great power is utterly impractical, completely undesirable and totally nonsensical. What I would like India to be instead is a great nation. I refuse to be a part of “Incredible India”. What I want is to be part of “Credible India”. This, for two reasons: Great powers destroy, great nations nurture. Destruction demands cruelty. Nurturing demands compassion. I believe in compassion. Great powers are built by rulers. Great nations are built by citizens who have as much a chance to take a stab at greatness as their lead...