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Strategies & Market Trends : Asia Forum

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To: Stitch who wrote (485)	1/6/1998 12:26:00 AM
From: Rational	Read Replies (2) of 9980

Stitch: << in Malaysia the price of fish, rice, and chili padi will have a much larger impact on buying power while in the states I guess it must be white bread and hamburger helper? How is this accounted for?>> The IMF/WB/IFC do not take the per-capita income literally. They have a multiplier, which for India is ~10 which should be multiplied with the per-capita income to get the purchase power. Ordinarily, the exchange rates are biased downward (US$ is higher than it should be) for countries that depend on high-margin imports (aircraft, defense equiment). This bias has gotten seriously accentuated due to the panic-driven currency runs. China and India are not getting affected as much because they have virtually self-sufficient local economies and can run (albeit inefficiently), keeping the imports restricted. Sankar

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