Author: Peter Drysdale

This year has seen a remarkable change in the world economic order, with the establishment of the G20 as the premium international forum for dialogue on international economic and related issues. The significance of this change in global arrangements is yet to be fully absorbed. So far there have been three G20 meetings — in Washington, London, and Pittsburgh. The next will take place in June in Toronto. In November the G20 goes to Seoul.

The meeting in Seoul symbolises the shift in the structure of world economic power towards Asia. SaKong Il, who writes this week’s lead for us, will coordinate Korea’s hosting of the Summit in Seoul as special adviser to President Lee Muyng-bak. As Dr SaKong says, since its inception in the mid-1970s, the G7 acted as if it were the informal global steering committee for global economic and financial issues. Read the rest of this entry »

Author: Andrew Elek

The meetings of APEC ministers and leaders during the week to November 15, set the scene for pursuing a post-Bogor agenda in APEC, working alongside other forums and institutions, including the G20 and the multilateral development banks. A breakfast meeting led to a realistic approach to the Copenhagen meetings on climate change. That informal gathering may come to be seen as the first in an annual sequence of meetings where APEC leaders who are part of the G20 help shape a common approach to global issues.

The declaration of economic leaders was a businesslike, to some unexciting, summary of the highlights of APEC’s ongoing efforts. That reflects the maturity of the APEC process – there is no need for grand new initiatives each year. There was much more to the week than its low-key press and the traditional photo opportunity and declarations. It was an efficient opportunity for many bilateral discussions of pressing matters, while speeches to the CEO summit allowed leaders and ministers to set out their vision for future cooperation.

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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

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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Guest Author: Arvind Subramanian, Peterson Institute for International Economics

In the run-up to the G-20 Summit in London in April, China created a frisson of excitement by pushing for the use of Special Drawing Rights (SDRs) as an alternative to the dollar as a global economic currency. To be sure, China’s demarche was self-serving. It is also true that when China now talks, the world must listen. But the Chinese proposal was taken seriously because it had enough objective appeal and systemic relevance.

In all the discussions about the reform of the international economic architecture and the G-20 process, India’s predominant concern has been with getting a seat at the table. This desire for influence is appropriate and attaining it is long overdue particularly since existing international arrangements, especially at the IMF and World Bank, are outdated and inequitable. But acquiring influence cannot become an end in itself. ‘Influence for what’ is a question that India must continually ask.

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Author: Takashi Terada, Waseda University

With a crisis of leadership looming large in the ruling LDP and the elections right around the corner, it’s easy to forget the leading role Japan has played in its region. Aside from Japan’s crucial role in APEC, the move towards ASEAN+6 began in earnest with a speech by Junichiro Koizumi in 2002, when the former Prime Minister called for Australia and New Zealand to be included as ‘core members’ in the process towards creating a community in East Asia, along with the ten members of ASEAN and China, Korea and Japan.

With the inauguration of the East Asia Summit (EAS) in 2005, and Prime Minister Abe’s proposal towards a Comprehensive Economic Partnership Agreement in East Asia (CEPEA), East Asian nations, and Japan in particular, have been positive about progress towards a more functional framework for cooperation.

However, a tangle of regional institutions competes for attention and resources, and as long as the 16-nation ASEAN+6 framework continues to coexist with the 13-nation ASEAN+3 framework in East Asia, the argument as to which is the more effective framework for regional cooperation continues to linger.

Japan, through all of this, has pushed for moves to strengthen regionalism. But why is Japan so interested in promoting ASEAN+6 as an ‘expanded’ East Asian regional concept, despite the existence of ASEAN+3?

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Author: Philippa Dee

Everyone is calling for a Doha conclusion by 2010. The G5 and the G8 are doing it. The APEC Member countries are doing it.

But Jagdish Bhagwati warns ‘Everybody’s talking a good game, but the question is whether they can play a good game … You have to distinguish between containing protectionism and actually liberalising further. I can’t think of any example of liberalisation when the macroeconomic stress is this enormous.’

‘This is just a ritual assertion,’ Bhagwati adds, referring to the G8+G5 statement. ‘When it comes to actually liberalising trade, they have to face their parliaments and their publics.’

But let’s think about this.

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Guest Author: Nina Hachigian, Center for American Progress

By all accounts, planning for the Group of 8 Summit-polooza in Italy was disastrous. Complex logistics were one problem. After Prime Minister Silvio Berlusconi decided to allow PR considerations to trump sanity and move the location of the summit to earthquake-stricken L’Aquila, tremor measurements and evacuation plans dominated the news coverage.

Another cloud was Berlusconi the man, who has been plagued by multiple scandals, the most recent involving very young women with very few clothes. But the underlying trouble is the G-8 itself. The world simply needs a different set of countries at the high table of global governance to tackle today’s challenges.

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Guest Author:  Barry Eichengreen

There has never been a question about the ultimate purpose of the Chiang Mai Initiative (CMI), the system of Asian financial supports created in 2000 in that Thai city. That purpose, of course, is to create an Asian Monetary Fund, i.e., a regional alternative to the International Monetary Fund (IMF), whose tender ministrations during the 1997-98 financial crisis have not been forgotten or forgiven.

So far, however, the CMI has been all horse and no saddle. Its credits and swaps have never been activated. The distress following the failure of Lehman Brothers would have been an obvious occasion. Yet, revealingly, the Bank of Korea, the central bank hit hardest, negotiated a $30bn foreign-currency swap with the US Federal Reserve, not with its ASEAN+3 partners.

Now, we are told, ASEAN+3 has achieved another great breakthrough, the so-called Chiang Mai Initiative Multilateralisation (CMIM), aimed at turning its bilateral swaps and credits into a regional reserve pool. The goal was set in 2005, and last month ASEAN+3 finance ministers negotiated the details.
They specified contributions to their $120bn pool, set down borrowing entitlements, and allocated voting shares.
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Author: Ron Huisken

Twenty years ago, Japan and Australia spearheaded a drive to create a forum for the states of the Asia Pacific to collectively consider how to advance their shared interests in a more liberal trading regime. This became Asia Pacific Economic Cooperation or APEC, the first official (or Track One) multilateral acronym in the region (other than the sub-regional Association of Southeast Asian States – ASEAN – which dates from 1967). Establishing APEC was a major, and difficult, accomplishment. The Asia Pacific was (and, of course, still is) a vast and diverse region. Moreover, it had little pedigree in, and weak instincts to, surrender of any sovereign rights to multilateral processes. The difficulties are manifest in the title of the forum – four adjectives in search of a noun, as one wit observed – and in the fact that it was a gathering of member economies, not of states, in order to finesse Taiwan’s participation. But APEC has endured. Since 1993, at the initiative of the US, it has involved Heads of Government. Even though its formal mandate has remained confined to trade liberalisation, HOGs have found the opportunity for low-key bilateral negotiations to be sufficiently attractive to continue to turn up.

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Guest Author: Brendan Kelly, former Country Director for China Affairs,  Office of the Secretary of Defense, United States

On June 16, the leaders of Brazil, Russia, India and China met in Yekaterinburg, Russia for the first formal BRIC summit.  The issue topping the meeting agenda was reform of the international financial and monetary system.   The BRICs offered a counterpoint and challenge to the G7/G8, which has served as the world’s economic ‘steering committee’ for the past few decades and meets next month in Italy.   Though light on substance, the BRICs’ message was clear: these growing economies want greater voice and representation in international financial institutions, and to a lesser extent, a greater role for their currencies in the international trade and monetary systems.

Over the past several months, leaders from Russia, China, Brazil and other countries have expressed concerns regarding the value and stability of the dollar, and have called for reducing the world’s dependence on the U.S. currency.  As the BRIC countries account for 42 per cent of global foreign reserves (and amount to about US$2.8 trillion), their pronouncements have produced strong market reactions.   Read the rest of this entry »

Guest Author: Carlyle A. Thayer, UNSW and ADFA

In a speech delivered to the Shangri-la Dialogue in late May, Prime Minister Kevin Rudd once again advanced his proposal for an Asia Pacific Community this time calling for a one and a half track conference to be held in Australia later this year. There has been widespread academic and diplomatic scepticism of the proposal since it was first promoted in an address to the Asia Society in Sydney in June last year.

Veteran Singaporean diplomat Barry Desker declared the proposal ‘dead in the water’ shortly after Rudd spoke. More recently, the retired ABC foreign correspondent Graeme Dobbell, writing in a Lowy Institute blog, argued that the Prime Minister had cut his losses and ‘moved on’ by demoting the ‘c’ in community from upper to lower case. And, as the East Asia Forum has revealed, The Australian got it wrong when it asserted that Kurt Campbell, in his confirmation hearing for appointment as Assistant Secretary of State, had opposed the idea.

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Author: Hadi Soesastro, CSIS, Jakarta

The Asia Pacific region is fast becoming a core area, if not the core area, in the international system. A new regional architecture is required to help frame the cooperation with the Asia-Pacific core as well as shape regional strategies towards global issues. As a soon to be released PECC report suggests: ‘So long as the multilateral architecture fails to incorporate Asian economies in a manner central to systemic issues, these economies will remain secondary players on global issues and sometimes even regional issues. The world cannot afford this.’

The need to reassess Asia Pacific’s regional institutional architecture has been under discussion at the Pacific Economic Cooperation Council (PECC) since 2006. A PECC Task Force will publish a report on the subject within the next month. The relevance of this exercise was underlined by Australia’s Prime Minister, Kevin Rudd, in his address to the Asia Society AustralAsia Centre in Sydney on 4 June 2008, when he suggested a new vision for an Asia Pacific Community. Has the moment arrived for a significant transformation in Asia Pacific’s institutional architecture?

There are four basic functions that a regional architecture needs to address. Read the rest of this entry »

Author: Peter Drysdale, ANU

In his keynote address to the Shangri-La Dialogue, the eighth summit of Asia Pacific security and military leaders held in Singapore, Australian Prime Minister Rudd took his idea of an Asia Pacific Community (APC) a decisive step forward on Friday.

It’s an open secret that the Singaporean commentators have been the principal doubters on the Rudd plan. Linking the economics to the long term security priorities for the region, Rudd took the argument up front, in a straight-talking yet subtly argued presentation that, at its core, left no doubt about Australia’s earnestness in taking the idea forward or about the current of support there is for it around the region.

The precise shape of the idea requires thinking through carefully and further diplomatic follow-up. Rudd re-asserted that Australia has no prescriptive view of the architecture nor exactly how to build it. In that context, Rudd used the occasion in Singapore to announce that he would host a one-and-a-half track meeting in Australia to help do just that. This specific initiative is clearly consistent with the advice that Dick Woolcott, Rudd’s personal emissary on the initiative, gave following his extensive soundings around the region.

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Author: Peter Van Ness, International Relations, ANU

During his first days in office, President Obama banned torture and restricted US interrogations to the non-coercive methods of the US Army Field Manual. He also ordered the closing of Guantanamo Bay and the CIA’s secret prisons abroad.

More recently, the President published some of the internal memos written by Bush administration lawyers that attempted to argue that torture was legal. By taking decisive action, President Obama hoped to deal with the problem and put the issue to rest. But the debate about torture is still raging.

The fact that the United States used torture in the interrogation of people captured during President Bush’s ‘war on terror’ is obviously a serious and complicated issue. This essay aims only to clarify three aspects: the language, legal status, and responsibility for this controversial policy.

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