Author: Rajiv Kumar, ICRIER
If the joint committee established to regulate the financial sector threatens to erode the credibility and autonomy of the Reserve Bank of India, the Multi-Commodity Exchange-Stock Exchange’s (MCX-SX) appeal against the Securities and Exchange Board of India (SEBI) should be seen as an attempt to undo possible regulatory capture. The MCX-SX asserts it has fulfilled all the SEBI conditions for conducting business in equities and other instruments.
Financial sector regulation has been in the news recently, and not for the right reasons. Read more…
Author: Vikas Kumar, Bangalore
Over the last two decades Asia has seen the emergence of competing centres of power, an unprecedented development in its modern history. A similar development in modern West Europe was followed by immense inter-state rivalry that ended only after a series of devastating wars. Even then it was the common threat of Communism and the security umbrella of an outsider, the United States, that curbed inter-state military rivalry. The United States served as a channel for inter-state communication and also balanced local powers against each other. In addition, it committed itself to defend West Europe from Soviet aggression. While Asian countries are cognisant of the economics of conflict, none of the major constituent regions of Asia — East, West and South Asia — has a common enemy that could force otherwise competing powers to close ranks.
More importantly, the capacity of any state, including the United States, to serve as a guarantor of security in 21st century Asia is increasingly moot. Read more…
Author: Shiro Armstrong and Peter Drysdale, ANU
The success of East Asian economies has been a story of openness to trade and investment that has allowed them to welcome foreign capital along with the know-how it brings, and specialize in production where they have a comparative advantage. Specialisation in industrial manufacturing has become finer as the trade in parts and components, along the production chain, can be produced wherever they can be produced for least cost and traded due to the low trade and communications costs and efficient logistics. Foreign investment has been an important driver of trade in East Asia and has been associated with the growth of efficient production networks.
Despite its ‘look East’ policy, India has not been able to join in these production networks. Read more…
Author: Veeramani Choorikkadan, IGIDR, Mumbai, and ANU
India’s growth during the last two decades has failed to transfer surplus labour away from the agriculture sector. Agriculture remains a disproportionate source of Indian employment—it is responsible for about 18 per cent of India’s GDP but employs about 60 per cent of the Indian labour force. This over-concentration on agriculture is unsustainable, and is closely related to idiosyncrasies in India’s pattern of growth.
So what has driven Indian growth over the past two decades? Read more…
Author: Tobias Harris, MIT
Having read and enjoyed Jacob Adelstein’s Tokyo Vice, it was with considerable interest that I read his article, ‘The Last Yakuza‘ in the World Policy Journal.
Like Corey Wallace, I have no particular expertise with which to assess the role played by the Yakuza in Japanese society. But also like him, I am skeptical about what political outcomes we can actually attribute to organised crime.
Read more…
Author: Joel Rathus, Adelaide University
The declaration of the Chiang Mai Initiative Multilateralisation (CMIM) in December last year required an important political decision on a seemingly innocuous number. This decision concerned each country’s contribution and ‘multiplier’ (which determines the amount a country can access in relation to their contribution). Built around a three-tier system, the multiplier determines where countries stand as either suppliers or borrowers of resources. This determines whether a country is a rule giver or a rule taker for the CMIM as a whole.
Countries with a multiplier of one cannot extract more from the CMIM than they contribute. Read more…
Author: Edward Aspinall, ANU
For more than a decade, Indonesia has had a reputation for being afflicted by serious ethnic and other forms of communal conflict. In the early years of the transition to democracy after President Suharto resigned in 1998, there were indeed serious episodes of ethnic violence in many provinces. In parts of Kalimantan, ethnic Madurese settlers were killed and driven from their homes, there were bitter communal wars in Maluku, North Maluku and Central Sulawesi, as well as serious violence associated with ethnonationalist mobilisation in Aceh and Papua. Anti-Chinese riots in several towns and cities accompanied the protests that helped bring down Suharto.
But now, more than twelve years after democratisation began, there is remarkably little organised ethnic conflict in Indonesia, and ethnicity rests only lightly on national politics. Read more…
Author: Ryo Sahashi, Kanagawa University
Japanese politics has been all mixed up after the change of ruling party last September. With an emphasis on regional community building and the December 2009 visit of Chief Cabinet Secretary Ozawa, to Beijing, some have speculated that Japan is restructuring its foreign policy radically by retreating gradually from the alliance with the US.
This is far from the truth. Foreign policy under former Prime Minister Hatoyama has actually been a nuanced continuation of past policies. The detail of his policy stance is best characterised as ‘dual hedging.’
Specifically, debates in the Diet and associated policy proposals are centered around economic partnerships within Asia. Read more…
Author: Xinpeng Xu, Hong Kong Polytechnic University and ANU
Hailed as the biggest change in cross-strait relations in 60 years, the significance of the Economic Cooperation Framework Agreement (ECFA) to Taiwan lies beyond changes in cross-strait relations. The ECFA ingrains Taiwan’s industry into the economic fabric of the growingly integrated East Asia and marks a new era for the future of Taiwan’s economic fortune.
The ECFA is a proposed trade agreement that requires the opening up, albeit gradually, of markets on both sides of the Strait. Read more…
Author: Evan A. Feigenbaum, CFR
So the US is going to join the East Asia Summit (EAS) … and you can hear the cheers all the way to Hanoi.
But why exactly are they cheering? Here are a few of the arguments:
(1) The US has been ‘missing in action’ in Asian institution-building; so joining EAS ‘puts the US firmly into the picture.’ Read more…
Author: Sherry Tao Kong, ANU
China and Indonesia are two of the world’s largest countries. Combined, they account for nearly 30 per cent of the developing world population. Surprisingly few studies have put them side by side, even though these two Asian giants share comparable political and economic growth experiences over the past 60 years.
The initial conditions of China and Indonesia can be described as those of underdeveloped agrarian economies. Read more…
Author: Andrew Levidis, Melbourne University and Kyoto University
Hatoyama Yukio and the Democratic Party of Japan swept to power last year amid ecstatic hopes and extravagant claims of ‘regime change’ that promised to renew Japan and finally bring to a close the ‘post-war’ era. This scion of a great political family might have seemed an improbable leader of the opposition but was seen as a beacon of change into which all the frustrations stemming from years of economic and political malaise were poured. At home he sought to end the dominance of the ailing LDP and break decisively with its post-war legacies.
Abroad, he sought to augur a new era in relations with Asia and China and a new coolness in relations with the United States. Read more…
Author: Ernest Bower, CSIS
Bilateralism, secrecy, and quiet pressure are being confronted by multilateralism, transparency, and efforts to appeal to international rule of law in one of the twenty-first-century’s most important bodies of water—the South China Sea.
Ironically, a tripartite agreement signed in Manila on March 14, 2005, one that China hoped would remain under the radar, helps to reveal the regional dynamics at play. That deal was called the Joint Maritime Seismic Understanding (JMSU). It merits a look as policymakers and politicians digest the results of last week’s important discussions at the 43rd ASEAN Ministerial Meeting (AMM) and 17th ASEAN Regional Forum (ARF) in Hanoi, Vietnam. Read more…
Author: Ayesha Zara Naeem, Lahore University of Management Sciences
Low-income earners in Pakistan have been offered financing opportunities for the first time, thanks to a recent surge in the activity of microfinance institutions (MFIs).
Microfinance theoretically involves the provision of loans or other financial services to lower-income-bracket borrowers, with little or no collateral required. These borrowers are able to take out small loans from MFIs to improve their businesses or living conditions. In Pakistan alone, the potential market for microfinance is an astounding US$27 million, with active borrowers and national gross loan portfolio size increasing in every financial quarter. Read more…
Author: Bill Standish, ANU
The 1990s were a decade of chaotic governance in Papua New Guinea (PNG), but some people are asking if the situation is any better now. Since 2006 the Somare government has taken credit for stability and new foreign investment in the minerals and petroleum sectors. The Opposition and civil society groups, by contrast, have alleged poor governance and pointed to the near collapse of essential services in many areas, while the conventions of democracy and the Standing Orders of Parliament are flouted.
Discontent from within the government could not be hidden on 20 July when the Deputy Prime Minister Sir Puka Temu, two other ministers and 17 other government MPs crossed the floor to sit with the Opposition. Read more…
