As some of you might know, recent reports have suggested that Samsung is nowhere near done with its 2013 smartphone lineup. The Diplomat has already covered stories regarding several such devices, including the Galaxy S4 Active, the “Mini” version of the Galaxy S4, as well as the rather elusive, camera-centric Galaxy Zoom.

Nevertheless, Samsung’s highly anticipated smartphone for the reminder of the year is still the Samsung Galaxy Note 3. The Note series has been a tremendous success and it’s pretty obvious that the South Korean manufacturer is planning on launching a third iteration, sometime in late Q3 / early Q4 2013. The biggest question though, is whether the upcoming “phablet” is going to be more of the same (with updated hardware specs but closely following the same formula), or if the manufacturer will truly innovate. So this time around, we look at the latest rumors about the handset’s build quality and display technology, aspects which could end up determining its success.

Samsung Galaxy Note 3 – Flexible Display

During the past few months, plenty of rumors have suggested that the Note 3 will feature a flexible / unbreakable screen. But let’s not forget that this kind of speculation is not actually fresh. Speculation about smartphones featuring flexible displays had started to surface a long time ago, immediately after Samsung and other manufacturers showcased this type of technology at various tech events.

The Galaxy S3 was rumored to debut a flexible screen, and when said display technology failed to materialize, it was Galaxy S4′s turn. It did not happen, and despite suggestions from various sources, the more recent leaks are indicating that the Note 3 will not feature a flexible display either.

Sam Mobile has recently reported on Oled-Displays.net’s findings, “confirming” that Samsung is now readying for the launch of its first 6-inch smartphone, which will be none other than the aforementioned phablet. Good news indeed, but the bad news is that, according to these sources, Samsung has run into several issues with mass producing its flexible displays. That said, the first 6-inch Samsung smartphone is now expected to arrive with a regular AMOLED panel.

On a side note, LG has also allegedly encountered similar issues, thus the chances of being able to purchase a handset boasting a flexible display by the end of the year, regardless of its brand, are slim to none.

Samsung Galaxy Note 3 – Premium Build, Or Not?

The second most impressive (speculated) characteristic of the Note 3 was that the device could actually distance itself from its roots by employing premium build materials.

Initial reports were suggesting that, with HTC One’s premium design highly acclaimed by consumers and critics alike, Samsung has started feeling the pressure and might have decided to change its “cheap plastic” design philosophy with the upcoming phablet.

Several rumors have previously indicated that the South Korean company is working on various Note 3 prototypes, one of which was said to deliver a brand new design and a metal case.

Unfortunately, just like the flexible screen, the idea of a premium design has taken a hit as well.

Sam Mobile has recently reported that, according to their sources, Samsung has decided not to stray too far away from its usual design language. Allegedly, even though the manufacturer has experimented with various designs and build materials for the Note 3, the handset in question will eventually end up being very similar to the Samsung Galaxy S4 – at least in terms of looks. Based on these reports, the main reason behind this decision is that the manufacturer would not be able to build enough metal cases in time for the handset’s release. Delaying the handset could have also been an option, but Samsung decided otherwise.

On the brighter side of things, these latest reports have also “reconfirmed” that the Note 3 should arrive with a powerful Octa-Core processor (made from two separate quad-core units, running at 1.9 GHz and 1.6 GHz respectively). The handset will allegedly also pack a 13 MP rear-facing camera as well as a 2 MP front-facing sensor. Additionally, the Note 3 is expected to take advantage of the latest version of the Android OS, and evidently, an updated TouchWiz user interface.

In the end, we need to remember that nothing is set in stone at this point. Nevertheless, it would be quite a disappointment if Samsung won’t be able to use the launch of the highly-expected Note 3 in order to bring forth some much needed innovation.

Do you consider this to be a missed opportunity? Or do you think that the Note 3 will be a success regardless of its build quality and display type, as long as the internal hardware is up to date? What are your personal expectations from this particular device, and what would make you want to own one? The comments section below is at your disposal.

Vlad Andrici is editor for gforgames.com and writes about technology issues.

Mongolia, rich with coal, gold, and copper has been riding high on the global natural resource boom. The country’s proximity to China makes its resources even more attractive. Over the past decade, mining sector development has led to significant foreign investment and growth in government spending, provided a boost to household incomes, and has moved much of the country beyond its nomadic herding past. In 2012, Mongolia was one of the world’s hottest economies, clocking GDP growth of 12.3 percent. However, political risks emerging over the past year put this positive frontier market story at risk.

Short-Term Risks: The Mining Sector

Amidst the hustle and bustle of the capital, Ulan Bator, trouble is brewing. In June of 2012, the Democratic Party of Mongolia came to power as part of a coalition after years of rule by the Mongolian Peoples Party. The new government has taken a more aggressive stance regarding FDI and is ratcheting up criticism of the country’s largest investor, Rio Tinto and its management of the $13 billion Oyu Tolgoi copper and gold mine (commonly abbreviated OT), which has been in development for close to two decades.

The government is refusing to support Rio Tinto’s efforts to raise an additional $4.5 billion to finance the second stage of OT that is seen as key to the long-term economic viability of the ore body. Lawmakers in Mongolia’s parliament are seeking to secure a greater share of the wealth extracted by quadrupling royalties from the current 5% to 20%. Meanwhile, the country’s president has accused Rio Tinto of mismanagement and wants to secure a greater say in the mine’s operations. The government’s moves come as gold and copper prices have been tumbling on global markets, adding to the pressure on OT.

Thus far Rio Tinto has refused to renegotiate its agreement with the government, but support is seen as essential to raising stage two funding and for successful operation of the mine. Rio Tinto and the government made an initial effort to resolve the dispute in February, but failed.  Following those conversations, Rio Tinto CEO Sam Walsh went so far as to state he had serious concerns regarding “recent political signals within Mongolia calling into question some aspects of the investment agreement” between the company and the government.

Meanwhile there are problems elsewhere at Tavan Tolgoi (TT), a massive coking coal deposit near the Chinese border and the most important mining operation in the country besides OT. Development has been delayed several times for financial reasons, as the government-owned operator, Erdenes Tavan Tolgoi, is reported to have presold coal to the Aluminum Corp of China at a price below the cost of production. It is also rumored that that deal was rushed in order to underwrite pre-election cash handouts to the population by the previous government, which according to Batsuur Yaichil, the head of Erdenes, cost the firm $669 million in 2012. Erdenes has since asked the government for a $500 million dollar bailout. An IPO expected to raise cash for the firm in 2012 has been put off until at least 2014.

Longer-Term Risks: Fiscal Sustainability

The situations at OT and TT point to larger, long-term risks associated with the populist ruling coalition’s questionable fiscal management. Since coming to power, the government has issued $1.5 billion dollars in sovereign bonds, introduced a draft mining law that would dramatically change the regulatory environment and raise royalty rates, fired TT’s previous top executive, and halted coal shipments to China.

The parliament also voted in a 2013 budget heavy on spending and backed by poor revenue assumptions. The budget increases expenditures and net lending by 18% bringing it to a projected to 42% of GDP. This comes after spending almost tripled between 2009 and 2012.

Making matters worse, current policies have lead to double-digit inflation. Thus far, inflation has not reached the record high levels of 2008, when it peaked at 33.7%, but inflation in 2012 was approximately 15%, driven by skyrocketing food prices, which according to the World Bank are undermining the real income and spending power of the population, a third of which still lives below the poverty line.

Several issues complicate Mongolia’s future further. The first is $1.5 billion in sovereign debt issued in 2012, representing almost 12% of GDP. During the lending roadshow the government suggested that the proceeds would be used to finance infrastructure projects, which are sorely needed to sustain growth and lift the population out of poverty, but the recent handouts to the population suggest short-term priorities have intervened.

A second complicating factor is the revenue assumptions made by the government. The government currently projects corporate income taxes to swell by $320 million, approximately half of which is expected to come from a renegotiated investment agreement with Rio Tinto. The source of the other half of new corporate income taxes is not explained.

Perhaps more worrisome are poor assumptions regarding the major trends in global commodity prices and volumes. The copper price assumptions made in late 2012, during the budget drafting process, were approximately 5% above the forecasted averages for 2013. Making matters worse the price of copper, along with gold and coal, has continued to fall in 2013 as demand in China has eased. To mitigate exposure to commodity price volatility, the government established a stabilization fund but it is woefully underfunded, amounting to only 2% of GDP for one year.

If ongoing negotiations with Rio Tinto are not resolved equitably the smooth start of operations at OT, slated for this summer, appears in peril. Additionally, should Rio Tinto and the Government fail to settle their dispute further fresh foreign investment will likely dry up. 

The potentially damaging dispute between China and the United States over accounting practices and access to audit records has now been dragging on for quite some time.  Unlike many other issues between the two countries, accounting was never likely to rouse the kind of passions that normally accompany trade disagreements, international alliance structures, hacking or military affairs, even if the potential for disruption is very real and considerable, as Pacific Money reported last year.

This last week however, finally brought what seemed to be a glimpse of progress in the dispute.

Professor Gillis, who is currently at China’s prestigious Peking University’s Guanghua School of Management, and who is also a member of the US Public Company Accounting Oversight Board (PCAOB), announced on his excellent China Accounting Blog that for the first time that he was optimistic that progress was being made.

 He quotes PCAOB Chairman Doty as saying “I am optimistic that we will soon be able to announce a protocol to exchange documents and other information necessary to enforcement investigations and disciplinary proceedings.”  As Professor Gillis goes on to state, this would be a significant if not total step back from the precipice that may have resulted in a mass de-listing and significant problems for even US-listed companies dependent on China for a significant proportion of their revenues.

Although the deal is not finalized, and it is far from clear that all sides in the dispute will be fully satisfied by the document exchange “protocol,” at least this progress offers both sides a chance to step back from their positions and engage in more cooperative dialogue. In addition, a partial or total resolution in the US-China issue will probably lead to a similar progress in the parallel dispute between Hong Kong regulators and their Chinese counterparts.

Despite the optimism this proposed “protocol” suggests, some questions remain.  The PCAOB in particular, will be making quite a compromise, since the documents that will presumably be shipped from China for inspection will first be filtered and possibly redacted. It will be hard for the PCAOB or foreign regulators to feel assured that these redactions are solely being done on the grounds of sensitive information relating to genuine secrets.

For China too, the agreement to allow such papers to be shipped overseas in any form also represents a significant compromise, as state secrecy laws, however extreme, were fairly clear that this was not permissible. So far, the new head of the China Securities Regulatory Commission (CSRC), Xiao Gang has a strong start in office. Not only has this US-China progress been achieved, but the CSRC is in the midst of a much needed crackdown on illegal and problematic practices in China’s markets.  

The upcoming Strategic and Economic Dialogue (SED) between US and China will provide an ideal platform at which to announce the partial resolution, although it is probable that much negotiation is still to come. Nonetheless, this breakthrough will allow more time for the problem to be fully resolved.

Global finance chiefs may have denounced it, but that has not stopped Japan joining other central banks in driving its exchange rate lower. With Australia and South Korea forced to respond, will the Asia-Pacific region be the main battleground in a global currency war?

At the latest Group of Seven (G7) meeting near London, the message from the seven industrialized nations’ finance officials was unequivocal: no currency manipulation by members.

Britain’s Chancellor of the Exchequer George Osborne said the G7 would continue its three-month-old pact “not to target exchange rates,” with the German and US finance ministers cautioning Japan over the weakening yen.

“The world community has made clear that domestic tools that are designed to deal with domestic growth are within the bounds of what the international community thinks is appropriate,” U.S. Treasury Secretary Jacob Lew said. “We’ve made it clear that we’ll keep an eye on that.”

Prior to the May 11 meeting, the Japanese yen hit a four-year low against the dollar as well as a three-year low against the euro.

Nevertheless, Japanese Finance Minister Taro Aso claimed the G7 supported Japan’s moves to reignite inflation.

"Japan took bold monetary and fiscal action to end prolonged deflation, with the government and the Bank of Japan (BOJ) working closely together," Aso told reporters after the meeting.

"The G7 didn't have a particular problem…I think Japan's stance is gaining broader understanding," he said.

The BOJ has pledged to double its bond holdings in two years with the aim of achieving a 2 percent inflation rate and end Japan’s debilitating deflation. At around 7 trillion yen a month, the Japanese bond buying is close to the US Federal Reserve’s $85 billion, but in an economy about a third the size.

The resulting slide in the yen has seen the Nikkei Stock Average climb past 15,000 to its highest level in more than five years, with investors welcoming the boost to Japanese exporters’ earnings.

However, the BOJ was forced to intervene after yields on 10-year bonds spiked from 0.6 percent to 0.92 percent. Meanwhile, “Mr Yen,” former vice finance minister Eisuke Sakakibara, has warned of a bubble and said “there will be some corrections…probably by the summer.”

In debasing its currency, Tokyo is following the well-trodden path of central banks in Britain, the United States and the eurozone. Yet the zero-sum game of devaluation has already forced countermeasures by Australia and South Korea.

On May 9, the Bank of Korea (BOK) cut its policy rate by 25 basis points, to 2.5 percent, its lowest level since early 2011, with the bank noting the threat posed by a strengthening exchange rate against its major competitor.

"The domestic economy will show a negative output gap for a considerable time, due mostly to the slow recovery of the global economy, the influence of Japanese yen weakening and the geopolitical risk in Korea," the BOK said in a statement.

According to the Wall Street Journal, expectations of a rate cut followed earlier moves by the European Central Bank and the Reserve Bank of Australia (RBA) to reduce interest rates.

In announcing its decision two days earlier to reduce Australia’s official interest rates to their lowest level since the 1960s, the RBA said: “The exchange rate…has been little changed at a historically high level over the past 18 months, which is unusual given the decline in export prices and interest rates during that time.”

According to analysts, the central bank was forced to act to reduce the overvalued Australian dollar, which despite lower commodity prices had remained high, punishing manufacturers, tourism and other exporters.

Across the Tasman, neighbor New Zealand has shown reluctance to increase rates due to its strong currency, despite concerns of a housing bubble.

While the Australian dollar has since cooled on speculation of an early end to US quantitative easing, falling below parity with the US dollar, it has remained at 2008 levels of around 100 to the Japanese yen.

The real targets for Japan may be South Korea and China, which have long benefitted from favorable exchange rates.

However, noted China economist Andy Xie has warned of the yen collapsing “like the Russian rouble in 1998. What the central bank is doing is they can’t see the end game, but the end game is chaos.”

But with governments seeing in their exchange rates an easy means of spurring export-led growth, there are few signs of an early end to the “currency corruption.”

China is on a global economic quest for foreign direct investment (FDI) and business opportunities. It is a quest in large part driven by the need for commodities. But other industries benefit from the opportunities created when Chinese businesses invest and trade. Georgia offers an interesting example. A seldom analyzed subtext of its relationship with China is the fact that Georgia is both an emerging economy and a former Soviet republic that, rather than falling prey to the forces of political and economic recidivism that have plagued so many of its peers, has chosen to root itself firmly in free market economics and democracy.

With a population of just under 4.5 million, Georgia is small in comparison to the other states of the former Soviet Union. But with a GDP of USD26.6 billion (2012 figures from the IMF, on a purchasing power parity basis) and real GDP growth of 7% for 2011 (and 6% for 2012 projected), it boasts an economy considerably more robust than those of larger former Soviet states and fellow “colored revolution” countries like Ukraine. It’s an economy that has proven its resilience, coming back from a 3.8% contraction in 2009 due largely to the political and economic upheaval caused by the Russo-Georgian War of August 2008, better known as “The Five Day War.”  An instrumental figure in Georgia’s improving, if at times varied, fortunes is current President Mikheil Saakashvili, a largely Western-leaning and U.S.-educated leader who has been a staunch ally of the U.S., and a proponent of a free market economy for his country. At times both an enigmatic and controversial leader, Saakashvili and Russian President Vladimir Putin have been at loggerheads since the beginning of Saakashvili’s presidency. Tensions between the countries remain high, with the close U.S.-Georgian relationship still drawing sharp anti-U.S. rhetoric from Russia.

Yet despite external pressures and internal political changes, Georgia appears determined to forge ahead with its commitment to free markets and democracy. Trade and foreign investment are a key element, and China an increasingly important partner. China and Georgia established diplomatic relations in 1992, when trade between the two nations was a paltry USD3.7 million. By 2011, that figure had risen to USD550 million. Recently China announced that it would invest as much as USD1.7 billion in Georgia over the next five years. While FDI from China into Georgia is largely focused on mining (gold, copper, marble) as well as timber cutting and processing, Georgia has ensured that money goes to other industries as well.

Take the example of the Sichuan Electric Power Corp China (SEPC). One of the first large Chinese companies to establish a presence in Georgia, SEPC built the Khadori Hydro Power Plant, which has a capacity of 24,000 kilowatts and 120 million kWHs (annually). With an investment of USD34 million, the firm is 93% owned by SEPC, China, and 7% by Peri, a Georgian company. It’s a significant employer of Georgians. China Xinjiang Hualing Group is the largest Chinese investor in Georgian mining and timber production, employing 1,600 local workers. Xinjiang Hauling Group will also build a trade center and an Olympic Village for the 2015 European Youth Olympic Games, investing at least USD1.5 billion over the next 5 to 6 years. Meanwhile, Georgia has been increasing its wine exports to China, with volumes rising from 180,000 liters in 2008 to 580,000 liters by 2011.

Trade between Georgia and China has had social and cultural implications for Georgia, which faces a small but proportionately significant influx of new immigrants, predominantly from China, India and Africa, drawn by employment opportunities. A relatively homogenized country, Georgia is now seeing a shift in population demographics as a direct result of its openness to trade.  The migration offers Georgia and China the opportunity to exchange on other, perhaps deeper levels.

Georgia-China trade cooperation is a study in contrasts. Georgia has adopted democracy and free markets, and has economically outperformed its neighbors, even in the face of the existential threat that is Putin’s Russia. Yet while emulating Western models, Georgia is reaping the benefits of looking east, trading with China, diversifying its economic options, and reducing the dominance of Russia.

Over the past few years, smartphone cameras have become powerful enough to be used as alternatives to regular point-and-shoots. Not surprisingly, then, more and more smartphone owners are today interested in the camera capabilities of a handset, and smartphone manufacturers are starting to catch up to expectations.

Apple’s iPhones have been held in high regards for their image capturing and video recording capabilities, but truth be told, these characteristics are not exclusive to Apple’s finest anymore. Sony takes pride in its Exmor RS sensor, Nokia has impressed with its PureView technology, and even HTC has switched gears with its UltraPixel sensor, in a quest to prove that when it comes to megapixels, size is not the only thing.

Smartphone manufacturers have invested heavily in the camera department, an effort that could really pay off by the end of the year. Rumors have recently begun to swirl around a handful of camera-centric smartphones, suggesting that we might witness a “cameraphone revolution” sometime in Q3 – Q4 2013.

Sony Honami – Rumors

Though Sony offers one of the best cameras on the Android market right now, it seems that the company wants to step it up a notch. According to several rumors, Sony is working on a camera-centric smartphone known under the codename “Honami” (which would allegedly go on sale under the name of Sony i1).

Spec-wise, this device will allegedly pack a Snapdragon 800 processor running at 2.3 GHz, 2 GB of RAM, 32 GB of storage expandable via microSD, a 5-inch 1080p Triluminous display, Android 4.2.2 Jelly Bean and a 2,930 mAh battery. The Honami is also rumored to come with a dedicated WALKMAN chip and liquid magnetic mobile speakers.

But what interests us most in this context is that the Honami is also reported to feature a 16.2 MP sensor borrowed from the Cyber-shot camera series. Additionally, a new image processing algorithm is said to be on board, as well as a G Lens and Xenon flash or Dual LED / Plasma Flash.

Google Nexus 5 – To Pack a Nikon-Based Camera?

Though the Nexus 5 hasn’t been unveiled during the Google I/O event, contrary to earlier speculation, it doesn’t mean the device is not going to eventually hit the shelves. Now that Google I/O has come and gone, we’re expecting the Nexus 5 to be unveiled roughly within the same timeframe in which the Nexus 4 was revealed last year.

In any case, we’re here to discuss about camera-centric smartphones, so what’s this about the Nexus 5? Well, apparently there have been several reports claiming that Google will focus on delivering a great “camera experience” with its next smartphone.

Judging by these reports, the Nexus 5 will probably arrive with a 5-inch 1080p display, a Snapdragon 600 CPU, a large 3,140 camera and Android 5.0 (or at least 4.3 if Key Lime Pie will not be unveiled by then).

But what interests us right now is that sources of Phone Arena have claimed that the Nexus 5 will feature a Nikon branded sensor that will be one of the biggest selling points of the device. According to these rumors, the testing module is already better than anything else on the smartphone market right now.

Nokia EOS / Lumia PureView

When it comes to camera-centric Nokia smartphones, the first device that pops into my mind is the 808 PureView, a smartphone that features a beastly 41 MP PureView camera with a 1/1.2″ sensor, ND filter, Carl Zeiss optics, Xenon flash and more.

Unfortunately, this handset hasn’t been one of the most popular, despite its amazing camera capabilities. It runs on Nokia Belle OS in a world where people expect Windows Phone 8, the hardware is not especially powerful, and availability-wise … well let’s just say that it’s difficult to find one in certain regions.

The good news is that the Finnish manufacturer could also have a new cameraphone in the works. To be more precise, some time ago The Verge reported that a so-called Nokia EOS Lumia PureView (or a combination of those names) is scheduled for release in June. This handset will allegedly be similar to the aforementioned 808 PureView, but as its moniker suggests, it will be powered by Windows Phone 8.

Closing Lines and the Samsung Galaxy Zoom

As a reminder, we’ve already discussed the Samsung Galaxy Zoom – which seems to be the Korean manufacturer’s response to the now-evolving cameraphone market. If you would like to learn more about the Zoom you can do so by reading our previous entry regarding Samsung’s smartphone line-up.

In the end, you need to keep in mind that all the information above is speculative. However, even if this early data is not entirely in line with what transpires, the fact of the matter is that this year there’s a lot of buzz about cameraphones. Even though there’s a chance that the above handsets will be released under different names and with slightly different hardware specs, the evidence thus far suggests that we’re still going to see a lot of camera-centric devices being released in the second half of 2013.

Which one would you be more interested in? Do you consider cameraphones to be the “Next Big Thing”? Feel free to share your thoughts.

Vlad Andrici is editor for gforgames.com and writes about technology issues.

Trans-Tasman rivalry is usually played out in sport, but this week’s budget announcements by Australia and New Zealand have taken competition into a new arena.

Announcing Tuesday a forecast deficit of A$18 billion for fiscal 2014, Australian Treasurer Wayne Swan said predicted savings A$43 billion would see the budget balanced by fiscal 2016 and returned to surplus a year later.

Estimating real GDP growth of 2.75 percent this fiscal year and 3 percent the next, Swan said that “by mid-2015, our economy will be 22 percent bigger than before the global financial crisis, outstripping every major advanced economy”.

Yet two days later, New Zealand Finance Minister Bill English said the New Zealand budget would return to surplus a year ahead of Australia, despite also suffering from a strong exchange rate and weaker exports.

Predicting a narrow NZ$75 million (about A$60 million) surplus for fiscal 2015, English said the budget “enhances the momentum that is building across the New Zealand economy".

"That momentum can be seen in some recent favourable data and can be felt in a growing sense of confidence and security about our economic position," he added.

The New Zealand economy is expected to expand to 3 percent in the year ended March 2015, averaging 2.5 percent over the five years to March 2017 after an average of just 0.8 percent in the previous five years.

The comparison was seized upon by Australian Shadow Treasurer Joe Hockey, who used the prediction by his conservative counterpart to attack the Labor government’s record.

"How can the Australian treasurer insist that the government's budget of deficits, higher unemployment and slower economic growth is unavoidable when New Zealand has been able to deliver an earlier surplus without a major resources industry and a strong New Zealand dollar," he said.

Trading places

Writing in the Australian Financial Review, Luke Malpass, a research fellow at The New Zealand Initiative, said New Zealand and Australia “have essentially swapped places” since the 2008 global financial crisis (GFC).

“The Kiwis started the GFC in the pit, but have doggedly clawed their way back. In contrast, Australian government profligacy has completely undermined the benefits of a once in a lifetime boom,” he wrote in an article published Friday in the Australian financial daily.

According to Malpass, New Zealand put the budget back on track by increasing consumption tax but cutting spending along with income and company taxes. By comparison, Swan had posted successive deficits despite having seen tax receipts grow by more than the entire New Zealand budget.

New Zealand also expects to reduce net government debt to below 20 percent of GDP by fiscal 2021, down from the current 28.7 percent, helped by asset sales.

However, Swan said he was “completely dumbfounded” by the comparison. Australia’s English-speaking neighbor has around one-fifth of its population, while its $170 billion GDP is a fraction of Australia’s $1.5 trillion.

"There are just a couple of small differences between Australia and New Zealand," Mr Swan said. "New Zealand went into recession [during the GFC]."

Swan said the Australian economy had expanded by 13 percent since the GFC, compared to New Zealand’s 4 percent. Australia’s net government debt is expected to peak at 11.4 percent of GDP in fiscal 2015, and according to Moody’s currently has “the lowest debt level of any AAA-rated sovereign, with the exception of Luxembourg”.

According to the Australian government’s budget papers, the US economy has grown by only 3.25 percent since the GFC, while the eurozone and Japan are yet to make up lost ground.

In this regard, Japan’s announcement Thursday that its economy expanded at an annualized rate of 3.5 percent in the March quarter would have been welcomed by both Australia and New Zealand, given its importance as an export market.

Speaking in Brisbane on Thursday, ANZ economist Justin Fabo said: “Historically when you’ve had a financial crisis, growth for the next seven to 10 years is not only below the pre-crisis level, but also below long run averages. We’re still in that period.”

While pointing out that government debt had swollen by 10 percentage points since the crisis, Fabo said Australia “hasn’t had a recession in 20 years”.

New Zealand might not be able to say the same. But with its finances looking more robust, the Kiwis are undoubtedly happy to be as competitive fiscally as they are on the rugby field.

The latest data suggests that Japanese Prime Minister Shinzo Abe’s inflation targeting policies, known now as “Abenomics”, are yielding at least short-term results in the world’s third-largest economy. Meanwhile, indicators from the largest economy, the United States, shows that prices there are falling.

First-quarter GDP growth in Japan surged to 0.9% (3.5% in annualized terms) according to the latest data. This unexpectedly robust upturn in Japan’s economic fortunes seems mostly to be down to a psychological boost. High expectations about the direction Japan’s economy is now taking under Abe’s “bold experiment” helped boost private consumption by 0.9%. 

Meanwhile, the fall in the yen associated with Abe’s quantitative easing program provided a predictable, yet better-than-expected boost to Japan’s exporters during the first three months of the year. The currency has fallen by a fifth of its value against the dollar and other major currencies, helping exports to make a 0.4% contribution to GDP, even after higher import values associated with the currency were balanced out.

Investment, the other driver of GDP growth, did not fare so well.  Capital spending dropped 0.7% from the end of December to the end of March, a particularly painful data point given that expectations were for an increase. Rising investment will be needed if Abenomics is to be considered a sustainable success.

Meanwhile, in the United States on the other hand, consumer prices, measured by the consumer price index (CPI) declined in April for the second month in a row. The fall of 0.4% (month-on-month) was sharper than expected, and brings the year-on-year increase in April to 1.1%.

Detailed data shows that falling energy prices, related in part to changes in the US energy market associated with technological changes and production increases, offset slight inflationary pressures in “core inflation” (measured excluding energy and food prices).

The fall in energy prices also allowed consumers to maintain spending in the face of higher taxes and spending cuts that were triggered earlier this year. The sequestration and other measures have brought about a surprisingly fast reduction in the US government budget deficit – the topic of so much political wrangling in Washington this year and during last year’s presidential campaign.

With inflation remaining roughly on target, and the budget deficit falling from 7% of GDP last year to 4% now, the United States seemingly has at least some room to breathe.

For the time being, both countries continue to make modest gains and realize recoveries, albeit at a weak rate.  For Japan, the positive sentiment will provide a boost that will continue to help growth, the main risk being the damage that future inflation resulting from “Abenomics” could do to growth if wages fail to keep pace. For the United States, a slow recovery is still a recovery, which is more than can be said for the collective eurozone.

Despite the recent crisis on the Korean Peninsula, Kim Jong-Un appears intent on pushing through with the agricultural reforms adopted last year. Although the effort is likely genuine, its success is unlikely.

News of the reforms first broke in July of last year, when Daily NK first reported on the so-called “June 28 New Economic Management Measures,” known informally as the “6.28 Policy.” Later that month Daily NK sources explained the new policy in greater detail, saying that it would entail reducing the size of agricultural production units to between four and six people, and would allow farmers to keep part of their yields.

“The state will take 70 percent of the target production and the farmers will get 30 percent, but if the farmers exceed the target then they get to keep the surplus,” the sources said.

The policy, which was reportedly set to take effect last October, essentially called for reversing some of the changes made during the 1990s, when the military was given greater responsibility for managing the farming system and reduced the food available to the actual farmers themselves.

Despite the recent crisis, the proposed reforms seem to be going ahead. At the Workers’ Party of Korea’s (WPK) plenary meeting in March, for instance, Kim announced a new strategic line that called for the “parallel development of the economy and nuclear arms build-up,” a line reiterated ad nauseam by DPRK officials and state media ever since.

Then, in April, Radio Free Asia, citing sources inside the country, reported that in parts of North Korea farmers were indeed being told they will be able to keep up to 30 percent of their harvests this year.

Finally, last week government officials acknowledged in state media that economic reforms had been made, but warned that their “legal and institutional frameworks still require alteration if changes are to be expanded.”

There are at least two reasons why it makes perfect sense that Kim Jong-Un would be rolling back some of the changes made under his father, Kim Jong-Il. Not long after Kim Jong-Il came to power he adopted a Songun (military first) policy that gave priority to the military over the WPK, which had enjoyed supremacy under North Korea’s first leader, Kim Il-Sung.

He did this because he recognized that it was the powerful comrades in the party who were in the best position to challenge his rule. By empowering the relatively neglected military at the expense of the WPK, Kim Jong-Il was able to create new power brokers loyal to him personally.

When Kim Jong-Un took power he faced the opposite problem; namely, it was the military officers who pose the greatest threat to his rule because of their empowerment by his father. Thus, along with purging senior officers who pose the greatest immediate threat, Kim Jong-Un has a vested interest in gradually devolving power away from the military. The economic reforms appear aimed at advancing that goal.

Reforms also make sense for Kim Jong-Un and his inner circle as a way to reduce discontent in the country, which, like the military, could potentially threaten his hold on power. It is an open secret that most North Koreans remember the reign of Kim Jong-Un’s grandfather more fondly than they do his father’s. This is partly due to Kim Il-Sung’s charisma—a trait Kim Jong-Un has tried to evoke—but also because the average North Korean’s economic lot was considerably better under Kim Il-Sung.

Indeed, although it’s difficult to imagine now, for a number of decades following the war North Korea was more prosperous and developed than its southern counterpart. As Andrei Lankov explains in his new book, “In most cases, the North Korean consumers were quite content with what they got through the PDS [Public Distribution System],” until about 1990. Many North Koreans still perceive getting food from the PDS as the norm.

Reviving some of the economic conditions that prevailed under Kim Il-Sung, like the PDS, could theoretically help bolster Kim Jong-Un’s grip on power. If agricultural productivity was greatly increased by incentivizing output, for instance, the North Korean state could potentially strive to restore the PDS.

Unfortunately for North Koreans’ sake, even the limited reforms that are being suggested are unlikely to be successful given the numerous obstacles they face. One of these obstacles, as Stephen Haggard, an expert on North Korea’s economy at the Peterson Institute of International Economics, points out: 

“Reforms in a country like North Korea are bound to be incremental. But if fundamental uncertainties remain about issues such as how cooperative output will be divided and whether households will have recourse to adequate private plots, then cultivators will not respond and the reforms will not have their intended effect.”

Another issue is that the North Korean regime lacks the ability to implement long-term objectives. This is evident by its decision to close the Kaesong industrial zone, despite the fact that this area was a huge source of foreign currency, which is something the regime desperately needs if it wants to make the necessary investments (or even buy fertilizer) to improve economic conditions.

Finally, the reality is that the limited economic success of the Kim Il-Sung era was achieved using an unsustainable economic model that can’t be resurrected. Even its limited and short-lived success was largely attributable to the enormous amounts of aid and trading concessions it received from the Soviet Union and Maoist China. The problem for the North is that the Soviet Union no longer exists nor does China in its Maoist form. Sadly, neither will any sort of economic prosperity in North Korea under the current government.

Zachary Keck is Assistant Editor of The Diplomat.

Just one month after the HTC First was released, AT&T has already reportedly decided to discontinue it due to poor sales.

The HTC First, or the “Facebook phone” as it is often called, was released among high expectations as it was the first device to ship with the new Facebook Home feature pre-installed. This came after months of speculation that the popular social networking site was preparing to enter the mobile phone industry in a big way.

As The Diplomat reported in April when the HTC First’s existence was first confirmed, Facebook Home “replaces your phone’s regular home-screen and delivers a new user interface that is focused mainly on people and social interactions,” with the idea being that it would enable users to more easily interact with their contacts.

From the start things did not go well for Facebook or the Taiwan-based HTC. Reviews were lukewarm at best for the device. In reviewing the HTC First and its Facebook Home Feature, ABC News remarked, “A Nice Place to Visit, but Not Quite Home.”

Starting at an initial retail price of US$99.99 with a two-year contract, already significantly lower than the nearly US$200 high-end competitors like the iPhone go for, AT&T announced last week that they were lowering the price of the Facebook Phone… to US$0.99. That’s a sizeable reduction for any month; it’s nothing short of a catastrophe when the reduction is made one month after a product’s release.

Amazingly, things have continued to get worse for Facebook, if BGR, a popular mobile phone site is to be believed.

Earlier this week BGR’s Zach Epstein reported, citing a “trusted source” within AT&T, that the company has decided to discontinue the phone altogether.

Epstein writes:

“Our source at AT&T has confirmed that the HTC First, which is the first smartphone to ship with Facebook Home pre-installed, will soon be discontinued and unsold inventory will be returned to HTC. How much unsold inventory is there? We don’t have an exact figure, but things aren’t looking good. According to our source, AT&T sold fewer than 15,000 units nationwide through last week when the phone’s price was slashed to $0.99.”

Epstein went on to say that the source did not give him an exact date for when AT&T would stop selling the HTC First, but that it was trying to unload as much inventory as possible by offering the phone for 99 cents. Our guess is that this leak just complicated that plan.

If the rumor is accurate, this certainly constitutes another huge setback for Mark Zuckerberg and Facebook, the first being its disastrous IPO offering. Still, social media is so integrated into so many people’s everyday lives that it has the resilience to overcome the occasional blunder. Then again, given the dismal reports on Zuckerberg’s recent effort to get into the lobbying industry, these blunders might be a more frequent occurrence.