Author: Quentin Grafton, Crawford School, ANU
Many of the new Aussie homebuyers who have taken advantage of the boosted First-home Buyers Grant since October 2008 appear to be blissfully unaware (or it wishful thinking?) of the global financial crisis. Thousands have rushed to buy over-priced houses, sign up to mortgages that they can barely afford and, seemingly, with little or no understanding there is a property price bubble.
In the days before the federal budget and the June 30 deadline for the end of the boosted First-Home Buyers Grant (raised in October last year to $21,000 for new homes and $14,000 for existing homes), it’s a good time to take a look at the price of our housing stock and the current recession and the Great Financial Crisis.
Robert Shiller in his book, The Subprime Solution, convincingly argues that speculative bubbles and busts in the US stock market (peaked in 2007), and in particular the US housing market (peaked in 2006), were important causes of the current crisis. Between 1997 and 2006 real house prices in the US rose 85 per cent. This housing boom encouraged lenders to make loans that couldn’t be afforded by some borrowers (the subprime and low doc loans). Lenders believed that house prices would not fall. They also took greater risks because their loans could be ‘securitised’ and the risk of default passed on to others. As interest rates started rise from record lows in 2002-2004, foreclosures increased and prices started to fall. The rest is history. We are now in a worldwide recession as confidence in the banking sector has slumped and consumer confidence has fallen off a cliff.
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Author: Pan Jiahua
During my recent trip to Australia, I encountered two illusions about climate change that need to be dispelled. The first is that an ambitious outcome from the COP15 in Copenhagen this December depends largely on agreement between the US and China (the so-called G2).The idea is that the EU will agree to whatever is the most ambitious outcome China and the US can agree to, and the rest of the world simply doesn’t count. No matter how much effort a country such as Australia makes, for example, with only 2 per cent of global emissions, the impact on global mitigation will be insignificant.
I disagree. This is not correct, and the reason for this is simple.
The second illusion relates to the effort China has made and is making in responding to climate change. I’ll attempt to dispel this illusion shortly, but first I’ll explain why countries outside of the so-called G2 count.
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Author: Alison Broinowski, ANU and University of Wollongong
We will soon know the reactions in the region to Richard Woolcott’s fishing expedition on behalf of the Prime Minister’s ‘2020 Vision’. The former head of the Department of Foreign Affairs has already said interest in an Asia Pacific Community (APC) is surprisingly widespread, negative reactions few, and willingness to discuss it almost unanimous.
What he will not be able to identify is a government in any Asian country that says an APC should replace the notional East Asian Community.
One reason is historical. The idea of an Asian or East Asian Community (EAC) has a much longer gestation period than most of us realise. If we begin in the late 19th century, we find religious and cultural scholars in India and Japan proposing the superiority of their civilization and the benefits of Asian unity, and declaring ‘Asia is One’. In the 1920s-30s, Rabindranath Tagore and Sun Yixian (Yatsen) and other opinion leaders were attracted by the nationalists’ aim, led by Japan, to create an ‘Asia for the Asiatics’. After World War II, Indians and Indonesians led newly independent and non-aligned countries in calling again for the ‘Asianisation’ of Asia and predicting ‘some sort of Eastern Commonwealth’.
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Author: Gregore Lopez, ANU
Najib Tun Razak was sworn in as Malaysia’s sixth Prime Minister on the 3rd of April 2009. He takes over the Prime Ministership of Malaysia at a critical juncture in the history of his party.
Globally speaking, Malaysia is suffering under the worst crisis since the Great Depression. Domestically, Najib’s ruling party, the United Malay National Organisation (UMNO) and the coalition that it leads, Barisan Nasional (BN), are at their lowest ebb, suffering a backlash from citizens fed up with the blatant abuse of power from a regime that has ruled Malaysia since independence.
Najib realises that party reform is critical for his and UMNO’s survival. He watched how Ahmad Badawi turned from ‘party hero’, leading UMNO and BN to a resounding victory in the 11th general election in 2004, into a ‘failed leader’ in the 12th general elections, where the citizens punished him for squandering their mandate and not instituting long-needed reforms. Badawi has been removed.
Najib knows that he will face the same consequences if he does not deliver victory for UMNO. For all its promises of loyalty, and the feudal mentality that pervades it, UMNO is ultimately driven by money and power. Read more…
Author: Kiichi Fujiwara, University of Tokyo
There is now a lot of thinking out there on security architecture in East Asia.
Thus far a stable international institution is conspicuously absent in the region, an absence that is all the more problematic with three nuclear powers – Russia, China, and North Korea – in the region, with no credible or stable mutual deterrence mechanism to speak of among them.
Yet all the thinking has not yet amounted to very much in terms of its impact on policy direction.
Here I’ll play the role of devil’s advocate, by pointing out some basic challenges that work against the construction of regional security architecture in Northeast Asia. The purpose is not to rule out future prospects; in the end, I have some concrete proposals that may make it possible to work against, or rather work around, the challenges for multilateral institution building in our region.
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