By Chan Akya, Asia Times
When a political party that has been in power for a long time suffers a sudden reverse in its fortunes, inevitably the financial media look to market reaction as a gauge of whether such moves are positive or negative. This of course goes with the longstanding principle of markets being a voting machine over the short term but eventually always being a weighing machine. In other words, fundamentals always triumph over near-term popularity questions. In Asia though, the political economy is more than a passing fad - indeed, in most countries it contributes to the bulk of fortunes enjoyed by businessmen. Thus it is that starting from the region's most developed economy, Japan, to its least developed countries like Pakistan, markets pay close attention to the composition of government, frequent statements, policy actions and the like. Going back to the first paragraph above, it becomes clear that the weighing machine and the voting machine become the same thing, in practice across Asia.
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