Author: Jinjun Xue
There is a potential for environmental issues to act as a constraint on economic growth. In this chapter a growth model displaying the characteristics of an Environmental Kuznets Curve (EKC) is used to analyse China’s potential of achieving low carbon economic growth.
The EKC is derived from historical empirical observations across countries. It is observed that environmental degradation associated with economic growth increases most rapidly at low levels of per capita income. As income grows, the additional degradation due to economic gain slows until it eventually peaks. As per capita income continues to grow, degradation eventually diminishes.
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Author: Hugh White, ANU
When the Berlin Wall fell it seemed to many that the end of the Cold War marked not just the end of a particular geostrategic episode, but the end of geostrategy as such. Now geostrategy is back. We are again exploring how the international order — the set of understandings and expectations that shape relationships between states — is formed by the perceptions and realties of power, and especially how changes in relative power affect the workings of the international order. Moreover, after a period during the Cold War in which geostrategic calculations were based more on military than on economic factors, we are rediscovering the centrality of economic power as the key driver of geostrategic relationships.
There is a simple reason for this: we are living through and period of remarkable economic transformation, which is driving shifts in relative economic weight of a scale and speed that we have not seen for many decades, if ever. And China is the key.
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Author: Hal Hill
One of the most durable and important elements in the Australia-Indonesia relationship is the large number of Indonesians who have studied in our universities. In Indonesia, Australia offers the largest number of graduate-level scholarships for study abroad, and it also hosts the largest number of private Indonesian university students studying abroad.
More so than almost any other country in Southeast Asia, these graduates now increasingly occupy senior positions in government, business, universities and civil society. It is no exaggeration to say that it is probably the single most important dynamic in the bilateral relationship. At elite levels in Indonesia, we are probably now better understood than any other western nation. And there is momentum in that many of the earlier Australian graduates send their children here to study.
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Author: Tobias Harris
In 2007, I reviewed the twenty-nine single-seat upper house races and offered a prediction (or, rather, a range) that actually proved too optimistic as far as the LDP was concerned.
Rather than review the races in the 300 single-member districts, I’ve decided that I will look at the state of the races in each of the country’s 11 proportional representation blocks, looking at important single-member district races in which bloc and making predictions on a block-by-block basis.
The goal is not necessarily to arrive at a precise prediction in which I have total confidence, but rather to identify important battlegrounds and ultimately address the question of whether the DPJ can win an absolute majority in the House of Representatives. Winning an absolute majority would not spare the DPJ from having to govern along with coalition partners, but it would have practical importance for improving the DPJ’s bargaining power with its coalition partners.
More importantly, it would have symbolic importance, signifying a clear public mandate for the DPJ to proceed in implementing the policies included in its manifesto — and forcing the DPJ’s adversaries in the Diet and the bureaucracy to think carefully about how to oppose the government.
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Author: Joel Rathus, Adelaide University
In recent days both the Liberal-Democratic Party (LDP) and the Democratic Party of Japan (DPJ), in addition to trading barbs, have released their respective ‘manifestos’, or policy platforms. Unsurprisingly, the focus in these documents is on domestic political matters almost exclusively with the pension system again taking centre stage.
Despite the preoccupation with internal affairs, Japan will not be able to shut out events in the outside world. The global financial crisis will propel the new government headlong into international affairs, ready or not.
It is increasingly likely that the DPJ will win this election. What are the DPJ’s views on Japan’s role in the international economy?
A central question is whether Japan will throw its weight behind the effort to de-throne the US dollar’s global role. It is worth remembering that in 1999, in the aftermath of the Asian financial crisis, the then PM Obuchi proposed ‘yen internationalisation’ as a means of achieving exactly this. Japan’s intentions are still important because unlike China – the current ‘leader’ (or at least the most vocal member) of the putative movement to replace the dollar, the Japanese yen has the greater ability to replace to some extent the dollar’s role, at least within East Asia.
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Author: Tobias Harris
Sankei has a long and must-read article on the obstacles facing a DPJ government in implementing its plans for reforming the policymaking process.
The article highlights divisions within the DPJ over how to proceed in reforming Japan’s administration, especially budget-making authority. The pragmatism visible in other aspects of the DPJ’s program is also visible in the party’s approach to administrative reform of late.
The pragmatic view is that of party senior counselor Fujii Hirohisa, a former LDP member who left the party in 1993, followed Ozawa Ichiro through from the Japan Renewal Party to the New Frontier Party to the Liberal Party to the DPJ. He served as finance minister in the short-lived Hata cabinet. And before running for the upper house in 1977 as an LDP candidate he served in ministry of finance for twenty-years, rising to the position of budget examiner in the budget bureau. Accordingly, perhaps we shouldn’t be surprised that Fujii is opposed to suggestions that the DPJ might completely detach the budget bureau from the finance ministry and attach it to the cabinet (the party’s 300-day transition plan refers to this idea).
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Author: Jonas Parello-Plesner
China and India (Chindia) is on everybody’s lips when talking about rising Asia.
Then what is KIA? A car, most people would reply. Yet it could also be the new brand-name for Asia’s middle powers; (K)orea, (I)ndonesia, and (A)ustralia. They are Asia’s 4th, 5th, and 6th largest economies. All three are often dwarfed by the big power play between China, India and Japan and the region’s –and the world’s – superpower, the US.
Yet look at Indonesia’s population as the world’s third largest democracy, Korea’s economy, and Australia’s size – a continent in itself. They are solid middle powers. Relocate them to Europe and they would be large countries on most accounts. In Asia, they are too small to be big, but too large to be small.
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Author: Jeffrey Frankel, Harvard Kennedy School
Friday marks 200 days in office for President Obama. “How has he done?” asks Fortune.
The first thing to say is that Barack Obama took over the presidency at an extremely difficult time. A variety of analogies suggest themselves: He is Harry Houdini who has been thrown in the river, in a straitjacket, with chains wrapped around him. Or he has taken over as the captain of a ship with a rotting hull, while the ship is under attack in a hurricane. To capture the state of the economy, perhaps the best metaphor is that Obama took over as pilot of an airplane in the middle of a steep dive. For a president precedent, he is Lincoln, who takes office as the South secedes. Or he is Roosevelt, who takes office at the depth of the Great Depression.
In any case, in light of the difficult circumstances, I think Obama has done amazingly well.
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Author: Peter Drysdale
The global financial crisis reinforced reluctance in key developed countries (the US, the EU, and Japan) to take the lead in crafting new global agreements on climate change, with the newly emerging economies (China, India, and Brazil), that aspire to play a greater role in global governance, not yet ready to take on a greater share of the responsibility. As Hadi Soesastro points out in this week’s lead, they still align with the developing countries (G77) to avoid having to make binding commitments by appealing to UNFCCC’s principle of ‘common but differentiated responsibility’[pdf]. They are holding on to this as a first principle in the negotiations for fear that making binding commitments could obstruct economic growth catching up and poverty reduction. The US position is that all countries should commit to a common principle and targets. With four months to go, there has been some shift in these negotiating strategies, as Soesastro explains, but there will have to be a lot of movement to get a satisfactory outcome from Copenhagen. He sees a deal between China and the United States as key to a positive result. He also suggests that China could be part of an East Asian ‘game-changer’ in the negotiations in which Australia, Indonesia and Korea might also play a key role. Discussion of the options is urgent.
In the months to Copenhagen, the East Asia Forum will feature contributions to this discussion from around the region, and the October-December issue of East Asia Forum Quarterly will digest the key arguments. We welcome your input.
Author: Hadi Soesastro, CSIS, Jakarta
Climate change is perhaps the most controversial international issue today. The scientific debate on the need to limit GHGs (green house gases) that are responsible for global warming has not ended, but it is no longer the main issue at this point in time. The Declarations of both the G8 and the Major Economies Forum (MEF), held in L’Aquila (Italy) in July 2009, stated the leaders’ agreement [pdf] with ‘the scientific view that the increase in global average temperature above pre-industrial levels ought not to exceed 2 degrees celcius’.
The real issue is how this would be achieved. As of today, the planet is already 0.8 degrees celcius warmer than at pre-industrial time, and the rise in the world’s average temperature has continued to accelerate. Establishing an international climate regime is seen as necessary to deal with this global problem. This effort began with the agreement in 1992 of the UN Framework Convention on Climate Change (UNFCCC) that led to the adoption of the Kyoto Protocol in 1997 and its entry into force on 16 February 2005.
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Author: Sandy Gordon
Problems with overseas students are not new. Former Prime Minister Bob Hawke famously cried over the Tiananmen Square massacre in 1989 and agreed to let 10,000 Chinese students stay. Many of them were on dubious short courses and on visas of doubtful provenance. Nevertheless, those who stayed have mostly made excellent citizens.
Nor are the twin problems of dodgy training providers and violence against overseas students unique to Australia. According to the BBC, ‘Tens of thousands of foreign students may have entered the UK to study at bogus colleges … before the system of accreditation was tightened up this year’. That system was tightened up not because of concerns about providers, but on grounds of security. Ten Pakistani ‘students’ suspected of terrorism were found to be ‘attending’ colleges for various short courses that were clearly little more than an immigration scam.
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Author: Shinji Takagi, Osaka University
The G-20 Summit of April 2009 called for a reform of the International Monetary Fund (IMF). Augmenting the IMF’s resources and making its lending more friendly to potential borrowers hit hard by the global economic crisis has been the easy part. More difficult to reform is the governance of the institution, which among others involves a reallocation of voices among the membership and an overhaul of its governance framework. Nevertheless, the Summit committed ‘to implementing the package of IMF quota and voice reforms agreed in April 2008 and call on the IMF to complete the next review of quotas by January 2011’ and agreed to give ‘consultation to greater involvement of the Fund’s Governors in providing strategic direction to the IMF.’
Increasing the voice and representation of new economic powers is important if the IMF is to maintain or restore relevance and legitimacy. In this context, what has been achieved in the 2006 and 2008 quota reforms is disappointing: the weight of the Asia-Pacific region has risen only by about 1.5 per cent, while that of Europe has hardly changed. The G-20 Summit called for an acceleration of the next round of quota reform but, given the nature of the voice reform as a zero-sum game, the pace of reform can only be incremental.
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Author: Tobias Harris
The LDP continues to set the tone in the non-campaign campaign. Speaking in Hiroshima on the occasion of the sixty-fourth anniversary of the dropping of the atomic bomb, Prime Minister Aso Taro stressed the existence of ‘a country with nuclear weapons that could attack as our neighbor,’ and reiterated the importance of the US nuclear umbrella.
That Aso stressed the US nuclear umbrella ought to deflate the impact of the first statement somewhat: if the US nuclear umbrella is adequate to meet the North Korean nuclear arsenal, then the prime minister is suggesting that North Korea can be dealt with in the same way that Japan has dealt with the Russian and Chinese nuclear arsenals. But, of course, Aso’s purpose was to call attention to North Korea as a country THAT COULD ATTACK Japan rather than his suggestion that the North Korea could be managed via the same arrangement by which the much larger and sophisticated Russian and Chinese arsenals have been contained.
In other words, another day of the LDP’s playing on the public’s fears to make its case for a new mandate.
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Author: Brad Glosserman
According to conventional wisdom, the global economic crisis is accelerating the transfer of power and influence from the West to Asia. The United States has been particularly hard hit by the downturn and America’s loss is China’s gain.
The Group of Eight industrialized nations, the traditional locus of power, has been fatally wounded. In the future, goes the argument, the most important forum will be the Group of 20.
If this analysis is correct, it suggests that another fundamental shift in global economic activity is due. Western demand will no longer serve as the primary engine of growth. Instead, Asian nations will abandon export-oriented economic models and embrace domestic consumption to generate growth. That will put in train another set of ‘knock-on effects,’ the most important being the development of social safety nets that no longer oblige their citizens to save so much of their income and instead encourage them to consume.
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Author: Virginia Horscroft
Fiji may not have been invited to this week’s Pacific Islands Forum Meeting in Cairns, but its presence will be felt nonetheless.
Regional leaders expelled Fiji from the Forum back in May, because they were not persuaded that Commodore Bainimarama planned to restore democratic rule in the near future. Far from getting Fiji off the agenda, its expulsion has intensified the dilemma facing Forum members – as recent public displays of their differing opinions on the treatment of Fiji demonstrate.
Australia’s political leaders are anxious to ensure that the issue of Fiji does not overshadow this week’s meeting in Cairns. Instead, Australia’s foreign minister, Stephen Smith, is insisting that leaders throughout the region are keen to focus on the ‘real work at hand’.
Rightly so. The Pacific Islands are now facing unprecedented challenges to their economic development, thanks to the global financial crisis and climate change.
For these challenges to be tackled effectively, the Forum must agree on regional responses to them. The important role that Fiji has to play in those responses is inescapable.
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