Author: Tobias Harris
With US President Barack Obama scheduled to visit Japan at the start of an East Asian swing in November — he will stop in Tokyo before going to Singapore for APEC and then concluding his trip with meetings in China and South Korea — the Hatoyama government is working hard to hammer out positions on the two major sticking points between the DPJ and the US government, the future of the refueling mission in the Indian Ocean and the Futenma question.
Regarding the former, Nagashima Akihisa, parliamentary secretary for defense, made waves this week when, in a speech in his Tokyo constituency Monday, he argued that the refueling mission ought to continue with a new mandate from the Diet. Read more…
Author: Peter A. Petri
Last week, the IMF raised its semi-annual forecast of world economic growth for next year, from 2.5 per cent to 3.1 per cent. The projections confirm that Asia is leading the global recovery. This is good news: the last three such revisions were downward, and at the time of the last report in the spring many Asian economies were still in freefall.
But for policy makers, the beginning of the recovery means new, difficult choices. The challenge is not just to exit interventions adopted in the crisis—which dominates the policy debate—but to replace these with structural policies that promote growth through the recovery and beyond. Read more…
Author: Peter Drysdale
The APEC Summit in Singapore is now just a month away. Each year APEC brings together the heads of government of 21 Asia Pacific economies to discuss issues of importance to the development, prosperity and security of a region that already constitutes more than half the world economy and is still its most dynamic centre of economic growth. Asia’s rebound from the global financial crisis confirms the region’s growing importance in the world economy. Next year, the APEC Summit will be held in Yokohama in Japan and the year after in the United States. The global financial crisis has seen the installation of the G20 Summit as the premier forum for international dialogue on global affairs and the fourth G20 Summit will be held in Seoul, cheek by jowl with the APEC Summit in Yokohama. The G20 includes the United States, China, Japan, Korea, Indonesia, Australia, Russia, Canada, Mexico (all APEC members) plus India (a potential APEC member after the end of the moratorium on membership next year).
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Author: Peter Drysdale, ANU
When the 21 APEC leaders get together at their summit in Singapore next month, the spotlight will be on Japan and its new Prime Minister Yukio Hatoyama.
For one thing, this year is the twentieth anniversary of the birth of APEC in Canberra, in 1989. APEC is the child of a remarkable Japanese and Australian diplomatic initiative. Its foundations were laid by Prime Minister Masahiro Ohira and his Foreign Minister, Saburo Okita, with whom successive Australian leaders including Prime Ministers Malcolm Fraser and Bob Hawke, as well as economists Sir John Crawford and I, outside government, worked closely over nearly two decades. APEC has become the central pillar of trans-regional architecture in East Asia and the Pacific. That is a significant Japanese achievement.
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Author: Joel Rathus
Beijing, October 10, the heads of Japan, China and South Korea met at the Trilateral Summit.
Ten years since the first such meeting was held, established on sidelines of the ASEAN+3 as an informal breakfast, the summit has come a long way. Read more…
Author: Ashima Goyal, IGIDR
The Direct Tax Code proposes to cut through the maze of tax laws, starting on a new slate towards overall objectives of growth and equity. The core idea is to expand the tax base to increase the tax to GDP ratio, even while keeping per capita tax liability low. The tax base should rise as compliance costs, exemptions, and resulting arbitrage-induced inefficiencies fall. Clear simple writing should reduce ambiguity and litigation.
A sharp shifting up of tax slabs is the carrot provided to swallow the stick of vanishing exemptions. The Code which will be applied as of 2011, has been put out for comments. It has a chance if discussions succeed in hammering a new social contract. Low rates and minimum exemptions would work if everyone pays, and the State also delivers.
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Author: Renu Kohli
Following the annual central bankers’ meeting at Jackson Hole, Wyoming, in the US, The Economist magazine in its 27 August issue predicts that the global financial crisis of 2008 will be a cathartic event for central banks. The responsibilities of central banks, it suggests, are certain to include financial stability in the future; inter alia, this will not merely broaden the scope of central banking and monetary policy, but will also place greater discretion with central banks, considering that financial stability is difficult to define and even harder to measure.
Put all this together and you get the larger picture: One, it blows the death bugle of the narrow, inflation-targeting central bank that had reached iconic status though never embraced by all. Two, central banking will be anything but rule-based as central banks marry price stability with regulation to give birth to something called ‘macroprudential regulation’.
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Author: Aurelia George Mulgan
The appointment of new Ministry of Agriculture, Forestry and Fisheries (MAFF) Minister Hirotaka Akamatsu – one of the most high-profile members of the DPJ, but a politician with almost no expertise on agricultural policy – is being interpreted as a symbol of the DPJ administration’s reform aiming to cut long-standing ties between Kasumigaseki (where Japan’s main ministries are located in Tokyo) and Nagatacho (where LDP headquarters is).
The Japanese press reports that MAFF bureaucrats, who, together with the LDP have controlled the country’s agricultural policy since 1955, have been gearing up for a war with the DPJ on the issue of transferring policymaking power from bureaucrats to politicians.
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Author: Raghbendra Jha, ANU
Many agencies including national governments and the World Bank have cited public works programs as a crucial tool for poverty alleviation, particularly in the rural sector. When properly designed and implemented, rural public works (RPW) have the dual advantage of providing employment to the unemployed (hence reducing poverty) and building much needed rural infrastructure.
Besides, as RPW are designed to peak in seasonally slack periods, they help stabilise incomes. By stabilising and stimulating rural incomes and, therefore demand, RPW have the potential of stimulating the rural economy and, therefore, act as a counterfoil to contracting demand during recessions. RPW have been used in many countries, including India.
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Author: Joel Rathus
In 2006, the Asian Development Bank’s (ADB) President Haruhiko Kuroda announced a new ‘regional’ platform in the Bank’s development strategy.
The Regional Cooperation and Integration Strategy (RCI) is now three years old. It is time to reflect on the problems it has confronted and to examine how it might fare from here on.
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Author: Maria Monica Wihardja, CSIS, Jakarta
This post looks at the interaction between economic and political institutions.
A theoretical study of a simple strategic complementary game with private and public information among partially informed agents such as central banks shows that initial fundamentals might give rise to different levels of transparency. Read more…
Author: Geethanjali Nataraj, NCAER
Since the last World Trade Organisation (WTO) ministerial meeting in Hong Kong in 2005, the WTO Doha negotiations have remained at an impasse. Negotiations continue to be unbalanced with developing countries still being offered a raw deal.
The stalemate is largely over developed countries’ reluctance to make considerable reductions in their trade distorting agricultural subsidies and unbalanced proposals for further reductions in industrial tariffs. Read more…
Author: Rajiv Kumar
The Pittsburgh Summit has clearly pronounced that ‘Today, we designated the G-20 as the premier forum for our international economic cooperation.’
This should normally imply the demise of G8, which has so far been the premier informal forum for global governance. It seems, however, that G8 will continue to function, albeit economic issues may be formally off its agenda, which could henceforth be more focused on geo-strategic and political issues. This will result in a two-track global governance architecture, which, in my view, does not really work.
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Author: Mohamed Ariff, MIER
There are signs that the global economic crisis is abating and a recovery is dawning. Economic data and earnings have surprised on the upside. While this seems reassuring, there are nagging doubts about the sustainability of the anticipated recovery.
Second-quarter numbers relating to private consumption, manufacturing production, exports and imports and gross domestic product have been encouraging, in that they have not been as bad as initially feared.
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Author: Tobias Harris
Nakagawa Shoichi, the finance minister under Aso Taro who, becoming infamous worldwide for his behavior at a G7 meeting in Rome in February, was forced to resign and then lost his seat in the August general election, was found dead at his home in Tokyo’s Setagaya ward Sunday morning.
Yomiuri notes an absence of external wounds, suggesting that Nakagawa, like his father Ichiro, took his own life.
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