Author: Philippa Dee

The largely self-serving statements from the universities in the lead-up to the Bradley review would have one believe that this is all about how much government money will be spent on higher education, and how it will be divvied up among institutions. Principles of good regulatory design are easily lost in the process. In order to evaluate what comes out of the review, let’s think about what we are trying to achieve.

Even the staunchest small-l liberal would not want to leave the Australian tertiary sector entirely to market forces. At minimum, there needs to be some accountability for the large amounts of taxpayers’ money involved. But to think about how those accountability mechanisms should be designed, it is useful to think about how our tertiary institutions, as (mostly) non-profit organizations, behave.

By definition, non-profit organizations are not primarily about making profits. Their goal is to achieve some non-profit objective – let’s call it a ‘charter’. This is not to say that they don’t care about the bottom line. Read more…

Author: Tobias Harris

Prime Minister Aso Taro, faced with dismal poll numbers, a potential rebellion within the LDP, and an economy galloping into recession, sought to stem the tide against him by announcing a second stimulus package at a press conference on Friday.

The government’s purpose is to ease the insecurities of the Japanese people, but also to make Japan “the fastest among the developed countries to escape the current recession.” To that end, Mr. Aso promised ten trillion yen (around $109.7 billion) in countermeasures for employment and business finances, including one trillion yen in residence and capital investment taxes. He promised thirteen trillion yen (around $142.7 billion) for shorimg up the financial system.

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Author: Peter McCawley

Imagine my surprise, doing a quick early morning check of the New York Times front page on Tuesday 16 December, to see the word “Indonesia” listed on the NYT’s Op-Ed site.  The world’s largest Moslem country, and the world’s third largest developing nation, is generally invisible in the U.S. media so I immediately followed the link to find out what was going on.  But the article was by an Australian rather than an American commentator.  It was the Lowy Institute’s own Michael Fullilove making a strong pitch for President-elect Obama to choose Indonesia as the site of his promised first Presidential speech at a “major Islamic forum”.

It’s a great idea.  Let’s hope it happens.  But in most countries, a good deal of foreign policy is drawn up to play to domestic audiences.  Sadly the suggestion isn’t likely to take on, is it?  Consider the arguments that Obama’s staffers will likely wheel out against the idea.

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Author: Chung-in Moon, Yonsei University

On December 2, the United States Congressional Commission on the Prevention of Weapons of Mass Destruction Proliferation and Terrorism, in a bipartisan report entitled ‘World at Risk’, listed the halting of North Korea’s nuclear weapons programs as one of the biggest priorities in state affairs for the Obama administration when it takes office.
The report also highlights the fact that although peaceful solutions to the issue may be sought through diplomatic efforts such as direct negotiation, if these fail, the use of threats such as military activity must be considered.

But what is important at the present time is not a hard-line policy on the presumption of diplomatic failure but the refinement of a diplomatic solution.

There are two diplomatic courses available for future negotiations with North Korea. One of them is carrying out, within the framework of the six-party talks, the negotiations for ,verifiable dismantlement’, the third stage of the February 13 agreement that is a political legacy left behind by Assistant Secretary of State for East Asian Affairs Christopher Hill. The other is the method of starting anew with the ‘broad-minded’ negotiations with the North halted because of the Bush administration’s ‘ABC’ (Anything But Clinton) policy. This would be an extension of the October 2000 North Korea visit of then-Secretary of State Madeleine Albright.

To be frank, the former approach offers little guarantee of success.

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Author: Tobias Harris

In a vitriolic post at Shisaku, MTC goes after those who insist that despite the LDP’s current crisis — which has only gotten worse sinceback in January when Fukuda Yasuo called it the worst since the LDP’s founding — the LDP will recover as it has done before.

I have encountered this argument all too frequently, and share MTC’s frustration.

Rarely have I encountered someone who offers a causal mechanism to explain how the LDP will escape the reaper this time. The argument is usually presented as the simple assertion that the LDP has survived to the present day, so it will continue to survive. This argument is logically flawed. The LDP’s survival in the past, despite defections and internal divisions, tells us nothing about whether the LDP will survive in the future. Arguably the LDP has never faced the possibility of defections while facing a major opposition party that was a plausible contender for power (indeed, an opposition party that was the largest party in the upper house). More importantly, the LDP has never contended with a major opposition party that was a plausible home for LDP defectors. While it is common to complain that the LDP and the DPJ are too similar, on the plus side the ideological overlap — if their similarities can be attributed to ideology — means that the DPJ is better prepared to welcome LDP malcontents than the Socialist Party ever was. The DPJ might be less attractive to LDP defectors by virtue of Ozawa Ichiro’s being the party president, but it’s not inconceivable that Mr. Ozawa could cut a deal regarding the premiership in order to bring in LDP members.

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Author: Suman Bery, NCAER, New Delhi

With India’s state elections out of the way (and with a surprisingly favourable outcome for Congress revealed by Monday’s results), the central government was free to proceed with its two-part economic stimulus package.

Monetary policy measures (including fairly significant acts of regulatory forbearance) were announced on December 7, and ‘real’ side measures, primarily fiscal, on December 8. These measures were taken against the background of a deteriorating growth picture in the advanced industrial economies, and a sharp slowdown in certain key sectors of the Indian economy, such as labour-intensive exports, automotive and real estate.

If a rising tide lifts all boats, a falling tide brings out all lobbies. There have been plenty of voices arguing that what has been presented is ‘too little, too late’, in respect of both monetary and fiscal policy. Many of these critics cite the US; there, the emerging professional consensus is that policy has been irresolute and reactive, and that well-timed anticipatory action would have significantly reduced the growth and fiscal costs of financial deleveraging. Others cite the resolution passed by the heads of government of the G-20 in Washington last month, where all countries pledged to stimulate domestic demand (and to avoid protection). Here, the poster-child is the dramatic package announced by China well before the G-20 meetings, followed closely by the public works program announced recently by the Obama administration.

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Author: Amit Singh, ICRIER

PM Yoshiro Mori’s visit to India in August 2000 was the beginning of a new era in India-Japan relations. The visit set a precedent for visits to India by his successors Junichiro Koizumi and Shinzo Abe. Since then, the two countries have sought to strengthen bilateral ties through initiatives and programs ranging from economic and cultural linkages to defence and security.

Japan directs 30 per cent of its foreign aid to India and is, even in this period of global economic turmoil, committing more than US $4 billion to the Delhi-Mumbai Industrial Corridor (DMIC). The two recent mega deals between Indian and Japanese companies, namely, the Daiichi-Ranbaxy merger (US $4.6 billion) and the acquisition of 26 per cent stakes (US $2.7 billion) in TATA Teleservices by Japanese mobile giant NTT DoCoMo, are clear instances of the growing economic ties between the two countries.

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Author: Trevor Wilson

Taking stock of Burma (Myanmar) at the end of 2008, it is hard to see improvement in the political and economic situation and equally hard to see international policy leverage proving any more effective than before. Consensus is growing that all policies have largely failed to influence the country’s State Peace and Development Council, and even some former supporters of sanctions now admit that sanctions too have failed.

Yet governments (including Australia’s) continue to add new sanctions to those that are already manifestly not working. Unsurprisingly, most governments never evaluate their sanctions, whose indiscriminate impact on nascent Burmese private enterprise has been documented. Imposing sanctions make the imposer feel good, and anti-regime activists rejoice, but the recipient regime feels they are discriminatory policies if the sanctions are not the universal, mandatory kind. So-called smart sanctions, like the financial sanctions imposed against individuals and organizations connected to the regime, are so cumbersome that main banks prefer not to transfer any funds at all to Burma, even legitimate funds to be used by reputable organisations for genuine humanitarian purposes. Meanwhile, those in the know use well-established but completely unregulated informal networks to transfer funds without the knowledge of governments, thereby circumventing these sanctions.

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Author: Ryan Manuel

Lord Patten’s recent article argues that China’s ability to have economic growth outside of the United States’ secured, liberal order is a beacon to wannabe authoritarians everywhere. China, then, is a threat to democracy due to its economic success.

There is some reason to what he says. Undoubtedly, the recent economic successes of both China and Russia have altered many of the tenets of democratic growth theory. Democratic growth theory, in a nutshell, argues that as an economy grows, the middle class demands more of a say in its affairs, leading to more democratic institutions and often political transition.

Yet, as Robert Kagan has recently argued, there is a considerable international appeal to autocracy, and if this can be combined with a successful economic model, then suddenly a new model of development appears.

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Author: Hadi Soesastro

G20 countries must exercise leadership to wrap-up the Doha Round, fight unemployment with macroeconomic policies and strengthen safety nets to minimize calls for protection. A fund should also be created to assist emerging and developing countries in undertaking counter- cyclical fiscal measures. Regional surveillance processes, as in the 1997 Asian Crisis, could help support politically difficult policy measures.

Protectionist pressures around the world are on the rise. G20 leaders have made a strong commitment to maintaining an open global economy and to resisting the temptation to resort to protection in these difficult times. Yet one participant at the G20 Summit argued for an extensive increase in the common external tariffs of the regional trade arrangement it is a party to.

This sort of protectionism can be contagious. To halt this, world leaders should take three steps.

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Author: Tobias Harris

Watanabe Yoshimi is not relenting in threatening rebellion against the Aso government.

Speaking at a fundraising party on Monday evening, Mr. Watanabe speculated openly about scenarios for political realignment. Edano Yukio, a DPJ reformist, was in attendance and stated that if Mr. Watanbe decides to leave the LDP for the DPJ, he should be welcomed with open arms.

Mr. Watanabe’s three scenarios for realignment include (1) a franchise model, the creation of a new party bearing the LDP label (the Tokyo LDP, for example); (2) the amicable divorce model, freeing Mr. Watanabe to bargain with all possible partners; and (3) the “without means” model, jumping from the LDP without any guarantee of a successful landing.

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Author: Benjamin Reilly

Democracy is a difficult subject for Asia.

Asian leaders may no longer advocate ‘Asian values’, but they still tend to shy away from discussing the internal politics of their neighbours. And when they do, they almost never talk about it in terms of democracy.

Today’s Bali Democracy Forum, an Indonesian initiative which will be attended by the governments of all East Asian nations, including China and other assuredly non-democracies, will do exactly that.

Co-chaired by Australian Prime Minister Kevin Rudd and Indonesian President Susilo Bambang Yudhoyono, it represents an ambitious step to place democracy squarely on Asia’s regional agenda.

This will not be easy. But it is well past due.

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Author: Tobias Harris

The Yomiuri Shimbun has released its December public opinion poll, which found that not only has the Aso cabinet’s approval rating fallen by half since the beginning of November (from 40.5% to 20.9%), but the cabinet’s disapproval rating rose by twenty-five points to 66.7% during the same span of time. The poll contains bad news for the LDP on every front. The DPJ has edged ahead of the LDP in baseline approval rating (28.2% to 27.2%) and opened a commanding lead in support in the next general election (40%, a ten-point increase, to 24%, an eight-point drop) — and, moreover, Ozawa Ichiro scored higher than Prime Minister Aso when respondents were asked who is the most appropriate choice as prime minister (Mr. Ozawa’s support rose to 36%, a fourteen-point increase, while Mr. Aso’s fell twenty-one points to 29%). This last figure is a critical indicator for the next general election, because voters have not only abandoned Mr. Aso, they also appear to be warming to Mr. Ozawa, depriving the LDP of the argument that no matter how unpopular the LDP is, the public still does not trust Mr. Ozawa.

(For the record, Asahi‘s monthly tracking poll recorded similar numbers. Twenty-two percent approval rating compared to a sixty-four percent disapproval rating and a dramatic fall and rise in support for Mr. Aso versus Mr. Ozawa for prime minister.)

The only heartening news — if one can call it that — is that more respondents preferred a political realignment over a DPJ-centered or LDP-centered government, or a grand coalition, the second-most preferred option.

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Author: Robin Jeffrey, Australian National University

What happened in Mumbai will not shake India to its foundations. India is tough and has weathered bigger storms. But the highly symbolic attacks dramatise a much wider set of struggles: the product of growing wealth for some and a revolution in communications.

The spectre haunting the nation is the old ghost in new clothes – class conflict, propelled by the same communications revolution that enables it to launch moon probes and claim recognition as a global power. In the new media age, awareness of injustice and disparity is growing among the poor, along with a sense that “we’re not going to take this any more.”

It will be some time before anyone knows for sure who was responsible for yesterday’s calculated lunacy. But we can be almost sure among them will be young men left out of the prosperity a growing minority of Indians have experienced. Religion sometimes propels violence, but deprivation and injustice are felt around the country. Last month 12 police were killed by suspected Naxalites in Bijapur, eastern India. It was the latest encounter between police and Naxalites or Maoists, who are leading a resistance by tribal people and landless labourers in a belt snaking from Nepal down the highlands of eastern India. Near Kolkata, the attempt by Tata, a giant conglomerate, to build a factory for the new cheap mini-car the Nano was chased away by landholders mobilised against inadequate compensation for their land. Tata announced earlier this month it would build the factory elsewhere.
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Authors: Rajiv Kumar, Mathew Joseph, Karan Singh (ICRIER)

India had a dream run of five years during 2003-08 as the GDP growth averaged nearly 9 per cent annually, the best run over five years ever! The economy began to slow from the middle of 2007-08. A 9 per cent growth apparently could not be sustained: India’s potential rate of growth has been estimated by more than one agency to be around 8.5 per cent. As the economy overheated, the central bank tightened credit gently initially but more sharply since 2006-07. The economy began to slow down. Some of us had argued that the tightening was going too far and was an over-reaction to global inflationary pressures. No one foresaw the external shock arising from the global crisis which began with the financial meltdown in the US.

Now the interesting question is what would India’s growth rate have been in response to the policy measures without the global crisis as compared to what it is likely to be in the context of the on-going global crisis.

Our analysis suggests a sharp collapse in Indian growth this year. India would have grown 7.5 per cent (a slowdown from 9 per cent in 2007-08), had the global crisis not occurred. The global crisis is likely to bring India’s growth rate to below 6 per cent in 2008-09.

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