"Rural demand in India has been growing in the last two years. The share of non-farm incomes of rural households has been rising steadily. In 1980, two-thirds of rural income was farm income. In 2007, it is estimated that only 41% was farm income. The non-farm income acts as a buffer during the period when the agriculture output is affected due to poor rainfall, thereby reducing volatility in rural spending.

Economists expect non-farm rural income to maintain its healthy growth, lending stability to overall rural demand. Over the next 12-18 months, as the urban employment growth remains slow, the importance of rural demand will continue to remain high. One of the factors helping rural spending is the steady improvement in credit availability."

"The first lesson on 'neo-realism' should involve acknowledging the concept of broad-based economic growth. Ever since the financial crisis of 1998, Indonesia's economy has had one cylinder down. Due to a variety of problems, growth in the manufacturing sector has not been satisfactory. To make double digit growth rates possible, one must first prioritize resolving the long-overdue problems in the manufacturing sector; i.e. issues such as labor market rigidity, deficiencies in human capital, regulatory uncertainties-all of which even the incumbent administration has yet to satisfactorily tackle.

The second lesson on 'neorealism' involves acknowledging Indonesia's linkage with the global economy, particularly in terms of capital flows. Government budget deficits are nowadays financed (partly) through financial markets. Financial market fund flows have become a significant component in the balance of payments and greatly affect movements of the exchange rate and economic stability. Therefore prudential macroeconomic policies should remain at the top of any elected government's priority list."

"Nepal's entrepreneurs, who have been exposed to an unprecedented level of obstructions in running their businesses in recent months, have ranked strikes and political instability as the top two constraints in the development of entrepreneurship in the country. A report also highlighted the lack of an affordable and reliable electricity supply and a poor transport network as constraints on growth.

Expensive power tariffs in Nepal, mainly due to inefficiencies in the power sector, have also slimmed Nepal's development prospects. A 2004 study noted that consumers in Nepal were paying $0.093 per kilowatt-hour, about 115 percent higher than tariffs in Bangladesh and India."

"The dream of connecting the entire continent of Asia by rail is one step closer to reality as an intergovernmental agreement marks a milestone in the ongoing project. The Trans Asian Railway spanning 114,000 kilometers and 28 countries is ever closer to being completed. China became the eighth country to ratify the treaty, joining Cambodia, India, Mongolia, Korea, Russia, Tajikistan and Thailand and 22 other signatories.

Nearly 10,000 kilometers of railroad needs to be constructed to complete the Trans Asian Railroad at a cost of $25 billion but funding for these so called 'missing links' remains a critical constraint. Member states, international development banks and the private sector will all collaborate to prioritize investment needs. Building the necessary rail infrastructure will also create employment opportunities in remote areas."

"The June 1 opening of Vietnam's first deepwater port in Cai Mep, outside of Ho Chi Minh City, will benefit Cambodia's sea transportation by reducing transit periods and cutting costs, the shipping industry says. Overland transport would also rise as Cambodia sees an increase in through transit due to its strategic position close to the Cai Mep port.

As well as increased through traffic, the main benefits for Cambodia is that exports from the country would also no longer have to rely solely on Hong Kong and Singapore -- vessels can now travel directly from the southern Vietnamese port to North America, while large vessels will also be able to dock closer to Cambodia, also cutting costs for domestic businesses. Cambodia and Vietnam this year agreed to facilitate cross-border trade by permitting the checking of cargo on just one side of the frontier."

"China and Malaysia are planning to allow exporters to settle some of their trade in the two nations' currencies after the countries agreed to a currency-swap arrangement in February, Malaysia's central bank said. The move would give exporters more flexibility and wouldn't replace the US dollar as a trading currency.

Exporters and importers would benefit from lower transaction costs and less exposure to currency fluctuations. The yuan and the ringgit are managed against a basket of currencies. The two countries removed their respective pegs against the dollar in July 2005."

"China's environment ministry sought to reassert its authority last week by blocking a 200 billion yuan ($29.8 billion) cascade of hydropower dams near Shangri-la that would generate as much electricity as the Three Gorges Dam. Despite pressure from local governments that want to push ahead with big ticket development projects to offset the financial downturn, the ministry suspended approval of the project along the Jinsha river in Yunnan province for failing to carry out adequate assessment of the environmental impact.

Power companies want to build 12 hydropower plants along the 1,423-mile Jinsha river, which flows to Yunnan and Sichuan provinces from its source high on the Tibet Plateau. But environmental groups have fiercely opposed plans to add dams along the Jinsha, which would affect one of the most bio-diverse regions in the world."

"The Indonesian government will this year withdraw a stand-by loan from Japan in order to support the stability of the country's economy, a finance ministry official said. The government has a stand-by loan commitment in yen denomination with Japan amounting to $1.5 billion as a reserve for the issuance of its Samurai bonds.

The government's stand-by loans up to now have reached $5.5 billion dollars. About $2 billion of the stand-by loans came from the World Bank, $1.5 billion from Japan, $1 billion dollars from Australia and $1 billion from the Asian Development Bank."

"The Vietnamese government is implementing a stimulus plan it values at more than $8 billion to meet the proposed goal of 5 percent economic growth in 2009. As part of the plan, the government launched a subsidy program for farmers on May 1. Under the initiative, farmers can get interest-free loans to buy domestically-produced agricultural tools and machinery. They can also obtain an interest rate subsidy of 4 percent for purchases of other agricultural supplies and house-building materials.

But farmers have been finding it hard to apply for subsidized loans because of the stipulation that they could only buy locally-made agricultural machinery with the funds. The products that the Ministry of Industry and Trade allows farmers to buy to be eligible for the loan subsidy are very limited while there are a wide range of other such products on the market. The definition of locally-made products is also an issue."

"The Philippines' central bank signalled a further rate cut on Monday, saying slowing inflation meant the authority, unlike some others in Asia, could keep to an easier monetary stance to support the weak economy. The central bank governor said rising oil prices did not pose a major inflation risk despite the economy's reliance on crude imports, adding a pause in rate cuts would be considered only when the economy showed clearer signs of turning around.

His remarks underline market expectations that the central bank will cut its overnight borrowing rate by 25 basis points to a record low of 4.0 percent in July. The economy shrank a seasonally adjusted 2.3 percent in the first quarter, its worst performance in two decades, which put pressure on the central bank to keep cutting rates, analysts say. Some other central banks, including those in Malaysia, Korea and Thailand, have stopped cutting rates for now, analysts say."

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