Welcoming China’s Asian Infrastructure Investment Bank initiative

Chinese workers pave rails at a construction site of Chengmianle. China’s Asian Infrastructure Investment Bank initiative will be launched this year. (Photo: AAP).

Author: Andrew Elek, ANU

In October 2013, just before the APEC meeting in Bali, Chinese president Xi Jinping announced the creation of the Asian Infrastructure Investment Bank (AIIB). The bank will be launched this year, possibly when APEC leaders meet in Beijing.

This new development bank can help fill the vast unmet demand for productive economic infrastructure, especially in the emerging economies of Asia. Read more…

A role for APEC: accelerating investment in economic infrastructure

Construction workers move stainless steel at a building site in Beijing. APEC leaders can agree this year on steps to promote infrastructure investments. (Photo: AAP).

Author: Andrew Elek, ANU

The world has a huge demand for economic infrastructure, including better transport and communications among economies. The world economy is performing well below its potential and, in 2011, Indonesia alerted APEC and G20 leaders to the significant potential benefits of meeting this demand. In the short term, new investment would help to further boost demand, while current low rates of interest provide an excellent opportunity to invest in economic infrastructure that would raise long-term productivity and integrate economies. Read more…

RCEP will help get Asian integration back on track

Leaders from ASEAN pose for a photo during the opening of the two-day World Economic Forum on Asia Thursday, May 22, 2014 at the financial district of Makati, east of Manila, Philippines. (Photo AAP)

Author: Andrew Elek, ANU

Asian interest in the Regional Comprehensive Economic Partnership (RCEP) process is rising. It is now perceived to be far better suited to Asia than the proposed Trans-Pacific Partnership (TPP), which is dominated by the interests of the United States. After recent failures to conclude United States–Japan market access negotiations, the proposed TPP is no longer expected to lead to comprehensive trade liberalisation. And, on closer inspection, so-called ‘platinum standards’ are seen to suit rich economies while limiting the ability of emerging economies to compete. Read more…

Seizing the global infrastructure opportunity in Indonesia

Workmen bed down the reinforcing for an elevated roadway in Jakarta on 14 April 2011. In recent years Indonesia has begun to build institutions that will help the nation’s infrastructure development. (Photo: AAP).

Authors: Mahendra Siregar, BKPM, Andrew Elek, ANU, and Maria Monica Wihardja, World Bank

Five years after the 2008 global financial crisis, the world economy is still operating well below capacity, largely because of serious policy mistakes in ‘advanced’ economies. Extraordinarily loose monetary policy has not been enough to counter the perverse fiscal austerity forced on the Eurozone by Germany and on the United States by the Tea Party. This combination of macroeconomic policy settings is not only inefficient — it is also unsustainable. Read more…

The potential role of the Asian Infrastructure Investment Bank

This picture, taken on 8 August 2013, shows men looking at a new suspension bridge being built over the Yangtze River in China. Chinese President, Xi Jinping, recently announced the creation of an Asian Infrastructure Investment Bank (AIIB). (Photo: AAP).

Author: Andrew Elek, ANU

China’s president, Xi Jinping, announced the creation of an Asian Infrastructure Investment Bank (AIIB) just before the October 2013 APEC meeting in Bali. If the new bank is managed professionally to finance commercially viable investments in economic infrastructure, it can begin to correct a very significant failure of global financial markets. Read more…

APEC leads by example in sparking economic recovery

(1st row) China's First Lady and President, Indonesia's President and First Lady, Russia's President, (2nd row) South Korea’s President, Malaysian Prime Minister and First Lady, Mexico's President and First Lady, New Zealand’s Prime Minister and Peru's President take part in the Asia-Pacific Economic Cooperation (APEC) Summit in Bali on 7 October 2013. (Photo: AAP)

Author: Andrew Elek, ANU

The APEC process will be 25 years old in 2014. Its first quarter-century was dominated by trade policy to attain the Bogor goal of free and open trade and investment.

 It is now time to broaden the APEC vision: Asia Pacific governments need to take more responsibility for preserving the global environment needed for peace and prosperity in the coming decades.

Read more…

APEC paves the way for greater regional connectivity

Leaders of the Asia-Pacific Economic Cooperation forum are pictured ahead of their joint press conference after concluding a two-day summit on the island of Bali in Indonesia on Oct. 8, 2013 (Photo: AAP)

Author: Andrew Elek, ANU

For more than a decade, the business sector has been telling governments to shift the focus of regional economic integration. Dealing with across-the-border problems of connectivity and behind-the-border problems caused by needless differences in economic regulations is now more important to business than further liberalisation of border barriers to trade or investment. Read more…

A new G20 strategy for development cooperation

Heads of the G20 leading economies posing for a family photo at the convention center in Los Cabos, Mexico on 18 June 2012. (Photo. AAP)

Author: Andrew Elek, ANU

In late 2008 the policy failures of Western economies created a global problem which they could not fix by themselves.

The G7 was forced to bring other emerging economies to the table to help deal with the global financial crisis. The new grouping — the G20 — was able to agree quickly on policies that limited the potential damage of the crisis. Read more…

G20 and Asian leadership

Govenor of the Bank of Japan, Masaaki Shirakawa, Japanese Finance Minister Taro Aso, and South Korea Central Bank Governor Kim Choong-soo attend a group photo ceremony at a meeting of G20 Finance Ministers and Reserve Bank Governors (Photo: AAP)

Author: Andrew Elek, ANU

Only five years after its excellent start, the G20 is still trying to define its role and its ambition.

Although the agenda is already too wide, some huge threats to the prospects for inclusive and sustainable development remain unattended. Read more…

Invest in infrastructure to restore confidence in the global economy

Mexican President Felipe Calderon opens the first working session of the G20 summit in Los Cabos, Mexico, 18 June 2012. (Photo: AAP)

Author: Andrew Elek, ANU

A series of massive policy failures are to be blamed for the crisis of confidence in the West that now threatens the global economy.

At the same time, policy failure is being compounded by the failure of global financial markets, with interest rates turning negative in real terms and huge gaps in infrastructure becoming increasingly evident — both in emerging economic giants and in the US.

Read more…

Trade regionalism in Asia: new issues and old

A worker walks on the scaffoldings built at a construction site in front of an apartment building in Beijing, China, Tuesday, 22 Nov 2011. The World Bank held its East Asian growth forecast steady but warned of growing risks including the European sovereign debt crisis and uncertainty about Thai manufacturing recovery from widespread flooding. Growth in the East Asian economic linchpin, China, is expected to ease to 9.1 percent this year and 8.4 percent in 2012 after a searing 10.4 percent growth in 2010. (Photo: AAP)

Author: Andrew Elek, ANU

A revolution in information and communications technology since the 1990s has changed the nature of production, international commerce and the importance of integration.

Eager to engage their economies in global production networks, governments have moved unilaterally to lift most tariff and other policy barriers which inhibit trade at the border. Read more…

Asia’s global leadership at a difficult time

A view of world leaders meeting for the G20 summit in Cannes, 3 November 2011. US President Barack Obama joined other world leaders in the south of France for a G20 meeting that is expected to focus on the Greek debt crisis and broader European financial troubles. (Photo: AAP)

Author: Andrew Elek, ANU

The 2008 global financial crisis catalysed a long-overdue transformation in the oversight of global affairs, bringing large emerging Asian economies to the G20 table.

A transition in the role of Asian countries at the G20 — from cautious and sometimes defensive to visionary and exemplary — was expected to unfold slowly, possibly taking a decade or more. Read more…

How can Asia help fix the global economy?

In this photo taken on Dec. 6, 2010, construction work continues along the Grand Canal, a trade route built 2,500 years ago to bring grain from the Chinese South to its rulers in the north, in Yangzhou, China. (Photo: AAP)

Author: Andrew Elek, ANU

The global economy has another serious bout of the jitters around the deep problems in Europe and uncertain recovery in the United States.

The IMF meetings in Washington may have temporarily allayed the effects of the collapse in global confidence but there remain big challenges for the G20 in developing a response to the threat of the world’s slipping back into recession.

Read more…