Philippines, Indonesia and India have got a Fed problem

(Aug 23): The populist leaders of India, Indonesia and the Philippines won office with promises of massive spending to upgrade their nation’s roads, railways and ports. Doing so, the thinking goes, would supercharge economic growth and emulate China’s success.

India’s Prime Minister Narendra Modi intends to spend a record US$60 billion ($81.7 billion) on infrastructure this fiscal year. Philippine President Rodrigo Duterte set an infrastructure spending goal of 7% of gross domestic product, while Indonesian leader Joko Widodo has added 7,000km of new roads and four new airports and last week vowed more.

In a global landscape starved of yield, foreign investment has poured in to help fund the ambitions, lured by young populations and some of the world’s fastest rates of economic growth. As a sign of their resilience, the trio have even shaken off interest rate hikes by the Federal Reserve, something that has tripped up many a developing nation in the past.

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