Bangladesh seeks financial aid, political reckoning in Malaysia and TikTok influences Silicon Valley
August 2022
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BANGLADESH’S BAILOUT REQUEST
The economic downturn is hitting all corners of the world, with several South Asian countries struggling to manage cash flows.
Pakistan and Sri Lanka’s calls for aid were inevitable given the extent of their financial problems. But Bangladesh’s request for US$4.5 billion worth of support from the IMF has raised concerns about its vitals.
For years, Bangladesh was hailed as a promising emerging market - it even beat India in per capita income in 2021. However, the double whammy of surging energy costs and lower exports are hurting government revenues and foreign currency reserves.
In an effort to preserve diesel and gas supplies, Dhaka has ordered electricity rationing across the nation. Schools are closing for an extra day of the week, public agencies are working for an hour less each day, and factories are adjusting to mandated power cuts.
In addition to the manufacturing disruption, Bangladesh’s huge garment and textile industry (third biggest global exporter after China and Vietnam) is facing weaker demand from buyers. European and North American retailers, such as Walmart and Gap, say customers are tightening their belts amid the cost of living crisis.
Another source of pain is soaring inflation. Imports, ranging from food to cars, are far more expensive this quarter, and the strength of the US dollar is exacerbating Bangladesh’s debt payments.
IMF officials are scheduled to visit the country for talks in September. Meanwhile, ministers in Dhaka are keen to point out that the national economy remains in better shape compared to its regional peers. Still, some analysts say the terms attached to any loan could spur Bangladesh to implement reforms and diversify its production base.
SERVING TIME…TWO YEARS LATER
Malaysia’s former prime minister, Najib Razak, begun serving time in prison this week after losing his final appeal to overturn a 12-year sentence. In 2020, Najib was convicted of seven counts of money laundering, breach of trust and abuse of power, capping a lengthy legal battle to punish those associated with the 1MDB fiasco.
Despite Najib’s status as a veteran politician and golden child (his father led Malaysia in the 1970s), he wasn’t immune from prosecution and his stalling tactics ultimately failed.
Najib’s fall from grace happened in 2015 when it emerged the sovereign wealth fund he sanctioned - known as 1MDB - was essentially an international scam, involving the embezzlement of billions of dollars. [Readers of Billion Dollar Whale will no doubt have opinions on the actions of Najib’s family, Jho Low, Goldman Sachs et al.]
Najib is also on the hook for four other corruption cases, but there’s already speculation he could ask for - and potentially receive - a pardon from Malaysia’s king. As a towering figure in the country, many Southeast Asia experts say it’s perhaps too early to completely write off Najib’s future.
TIKTOK CHALLENGES SILICON VALLEY
This is TikTok’s world and we’re just living in it. The video-sharing platform continues to pervade the digital realm, forcing Silicon Valley’s old guard to quickly adapt.
With 1+ billion users, TikTok’s vertically-framed, short-form content has transformed music trends, storytelling, influencer popularity, advertising and attention spans.
It’s obvious the folks at Meta are very nervous, especially since TikTok captures the elusive 16-24 year old demographic. Cue Instagram’s recent algorithm revamp and the growth of Reels. While the pivot to seconds-long videos sparked criticism and delayed the rollout of other new features, Instagram’s chief reiterated that change was inevitable - and those changes sound rather TikTok-esque.
Away from Mark Zuckerberg’s empire, Alphabet is also feeling the heat from TikTok. YouTube launched Shorts in 2020 to lure creators and viewers. But now there’s the matter of search - Google executives have reportedly noticed that young people are turning to Instagram and TikTok for discovery purposes. This means scores of teenagers are bypassing Google for TikTok when searching for “restaurants in Paris” or “chocolate cake recipes”.
TikTok is impacting online retail as well. Amazon is said to be experimenting with a similar photo and video feed of its products. According to the Wall Street Journal, the app feature is in beta mode and available to a small number of Amazon employees.
The question is: as TikTok and parent company ByteDance innovate further, will Silicon Valley have to mimic something else next?
Catch you in September! Take care and stay curious, Sara x