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January 25, 2008

On the Road: Singapore and Manila

Glenn Hubbard
Dean and Russell L. Carson Professor of Finance and Economics
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I had the opportunity to give a lunch talk on the global economic outlook to the American Chamber of Commerce in Singapore. While I made the case for slow growth in the U.S. (but no recession) and discussed various credit crunch scenarios, I particularly enjoyed the questions about globalization. One possible explanation for Asian stock market declines a few days ago is that market participants are realizing that Asia is not “decoupled” from economic performance in the United States and the rest of the industrial world. The discussion only highlighted for me the extent to which business leaders have to think globally even in assessing the local outlook.

A fantastic evening in Manila last night: a small group of Columbia Business School pillars of the Philippine business community and friends gathered with me at the Tower Club to join in singing popular standards with the very talented University of the Philippines Concert Chorus. We stayed for a dinner, hosted by Board of Overseers members Wash SyCip ’43 and Al Yuchengco ’50. Conversation centered on the School, what the current students are like, and the fun CBS students had on their recent trip to the Philippines. We also debated Asian “decoupling” from the U.S. economic situation and banking opportunities to the Asia-Pacific region. This morning I joined a dozen alumni for a breakfast at the Peninsula Hotel, hosted by Nori Gonzalez Poblador IV ’96. After a vigorous economic discussion, we talked about the upcoming Pan-Asian Reunion and the CBS Ambassador interviewing program.

I was struck by the warm feelings of the Philippine friends for Columbia Business School and Columbia University. The embraces and remembrances were fond and familiar. I was also keenly aware—as I am in so many conversations around the world—of the many connections our alumni have to each other and to the business leaders generally.

Home via Hong Kong coming up—but a great trip to Asia!

Comments

by Michael Senno | January 26, 2008 at 11:36 AM

First, I really enjoy the blogs and, especially for someone interested in using the Media concentration at CBS to pursue a digital media career, think it is a great addition to the site. While it certainly makes sense that the business climate in the US affects Pan-Asian economics, and vice versa, it indirectly defies an age-old investing axiom - diversification. Typically different parts of the world experience different economic cycles, driving overseas investments to offset domestic losses. Could continued globalization, eliminating the barriers between countries, force more markets to move in step with each other rather than in opposite cycles? An interesting experience or commentary would be on how business leaders in Asia respond to difficult economic times, compared to domestic business leaders. That perception affects how business is conducted when dealing with Asian companies.

by Zheng Xu | January 26, 2008 at 12:31 PM

I really like this blog, which gets me so close to the Columbia community members, from Dean to current Students. Experience virtually what Columbia is experiencing is exciting. Maybe one day this public offering becomes kind of "CBS-Facebook" or "CBS-pedia", reaching out to and bringing in all people around it.

by Olivier Do Ngoc | February 03, 2008 at 6:46 AM

It is true that emerging markets in particular Asia are still very dependent on so-called global events (rather US ones I would say) affecting their economies. Globalization in that sense takes a toll on some of the most fragile economies which have to either be in synch with the US business and economic cycles or always have to fight strong headwinds of exogenous factors to their own domestic economy. Take Thailand for example, is the fragile economic recovery expected after last December's democratic elections and the 18 months long military-coup appointed regime at stake because of the US sub-prime mortgages 'global' issue? Surely this is unfair to millions of middle class hard working Thais who are hopefull that 2008 would see their lives improving. Similarly, is the historic rapid growth in Vietnam going to be affected by the US business cycle, and with that over 84 million people moving from relative poverty to higher living standards? Fortunately, it seems that Asia is starting to be more immune to the US, not so much in the equity markets but through intra-regional trading and cooperation (a testimony of this is that South Korea, Japan and Taiwain, not US, for example are the largest investors in the Vietnam economic boom). But with the largest financial institutions in the world being affected by the global business cycles and given the interdependency of capital, there still a risk for emerging or recovering economies to have to be impacted by one of the negative aspects of globalization, hopefully for millions of people in Asia not a repeat of the 1997 Asian crisis though.

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