Why is Indonesia terminating its bilateral investment treaties?

Authors: Leon E. Trakman and Kunal Sharma, UNSW

The value of investor-state dispute settlement (ISDS) procedures has been questioned by Australia and, more recently, Indonesia. The Australian government’s controversial 2011 Trade Policy Statement — stating that Australia would not agree to ISDS in its treaties — caused significant debate. In part, Australia’s policy was motivated by Philip Morris’ legal action against the government over legislation requiring the plain packaging of cigarettes. Read more…

Why cultural values cannot be ignored in international relations

A competitor flies a kite of the 'God of Wealth' during the kite flying championship at the 31st Weifang international kite festival in Shandong province, China, 19 April 2014. Ensuring the peaceful rise of new great powers requires a more in-depth and organised effort among Western governments to understand the cultures of Asia and elsewhere. (Photo: AAP).

Author: Kadira Pethiyagoda, Canberra

One hundred years ago began the war that was supposed to end all wars. This inauspicious centenary has allowed the foreign affairs commentariat to indulge in one of the things it is best at — drawing historical analogies.

It is true that aspects of the global landscape look similar to a century ago. Read more…

Modi’s new financial inclusion plan is a step in the right direction

Authors: Akshay Gakhar and Geethanjali Nataraj, Observer Research Foundation

On Independence Day 2014, India’s Prime Minister Narendra Modi launched his financial inclusion plan to provide a bank account to every Indian household. His ‘Jan-Dhan Yojana’ (Scheme for People’s Wealth) — which, in typical Modi vernacular, plays on rhyming words — seeks to provide financial independence to unbanked Indians through a two-phase plan.

Phase one focuses on providing every household in India with a free zero-balance bank account and a RuPay debit card — which allows for electronic payment at all Indian banks — with an aim of increasing financial literacy among the poor. Read more…

The ‘Indo-Pacific’: absent policy behind meaningless words

Australian Minister for Foreign Affairs Julie Bishop and Chinese Foreign Minister Wang Yi shake hands before giving opening remarks before the next round of the Australia–China Foreign and Strategic Dialogue in Sydney, 7 September 2014. China is likely to endorse the term Indo-Pacific, which Julie Bishop directed her department to use in 2013.-minihighres

Author: Trevor Wilson, ANU

Some may not have noticed when it happened but Julie Bishop, after becoming Australian Foreign Minister in September 2013, directed the Department of Foreign Affairs and Trade (DFAT) to use the term ‘Indo-Pacific’ instead of the traditional ‘Asia Pacific’ which has now been in use throughout the world for more than forty years. According to some, Bishop was not initially wedded to ‘Indo-Pacific’ but she seems to have become a convert, although she still occasionally uses ‘Indo-Pacific/Asia Pacific’. Read more…

The past successes and future pitfalls of decentralisation in Vietnam

Author: Thomas Jandl, American University

Vietnam’s market reforms are inseparable from the policy of economic decentralisation, which allowed for local experimentation and forced provincial leaders into competition. This improved the business climate throughout the country. In this sense, decentralisation is a root cause of Vietnam’s attractiveness to investors around the globe. Yet it would be a mistake to view decentralisation as one smooth process. Instead, it has gone through two main phases and is now entering a third. Read more…

The fragile happiness of Japan’s ‘insular’ youth

Ready to take on the world: college students at a ceremony in Tokyo to mark the start of the annual hunt for jobs. A recent survey into the attitudes of school students showed that the number who considered themselves to be very happy had doubled in the past three decades. (Photo: AAP).

Author: Noritoshi Furuichi, University of Tokyo

The youth of Japan appear to face a bleak future — a catastrophic budget deficit, ageing population and collapsing social security system. Despite this, according to data released last year, Japan’s youth are astonishingly positive in their outlook. In the government-run Public Opinion Survey Concerning People’s Lifestyles, levels of youth life satisfaction reached 78.4 per cent — the highest they had been since 1967 and higher than during Japan’s booming ‘bubble economy’ period. Read more…

Seeking accountability and failing to find it

Supporters of Pakistani cricketer-turned politician Imran Khan wave flags during an anti-government protest in front of the parliament in Islamabad, 14 September 2014. (Photo: AAP)

Author: Rosita Armytage, ANU

It started off fun. The Azadi (freedom) March led by Pakistan Tehreek-e-Insaf (PTI) chairman and former cricketer Imran Khan, and the Inquilab March (Revolution March) led by Tahir Ul Qadri of the Pakistan Awami Tehreek (PAT) party have created a festival atmosphere in the nation’s capital of Islamabad. Read more…

Defeating India’s disastrous food price inflation with trade

The inflation of food prices in India is now a pressing policy issue that the Modi government must tackle. (Photo: AAP).

Author: Rajiv Kumar, CPR

Indian economic data in July on industrial growth and inflation was disappointing. Industrial sector growth slowed to 3.4 per cent in June 2014 with the manufacturing sector, the largest component, growing at an anaemic 1.8 per cent. But the more worrying set of statistics was the rise in retail inflation to 7.96 per cent in July 2014, which also reversed the declining trend observed since December 2013. Read more…

A chance to mend China–Japan relations

The respective leaders of China and Japan should not let issues like the Diaoyu/Senkaku Island dispute get in the way of building a stronger bilateral relationship. (Photo: AAP).

Authors: Yves Tiberghien, University of British Columbia, and Yong Wang, Peking University

Over the last two years, China–Japan relations have been trapped in a downward spiral. The inescapable reality of an ongoing great power transition makes this situation particularly tense: the size of China’s economy relative to Japan’s jumped from a mere 25 per cent in 2000 to 99 per cent in 2009 and then to 188 per cent in 2013. Yet an alternative policy course is slowly developing. Read more…

India and China must think outside the ‘bureaucratic box’

Author: Tansen Sen, City University of New York

Chinese president Xi Jinping’s forthcoming visit to India will achieve nothing unless the new leaders of India and China can overcome existing inertia and seriously start revamping their bilateral relations. It is true that the two sides have managed to avoid a repeat of the 1962 armed conflict, and that diplomats have to be credited with limiting the border differences to a few ‘incursions’ and a tense standoff at Daulat Beg Oldi near the disputed Aksai Chin region in May 2013. But, as these episodes accumulate and are sensationalised by the media and dramatised in the blogosphere, they perpetuate mutual distrust and harden negative public perceptions. Read more…

Refining the role of government in the Australia–Indonesia live cattle trade

Indonesian workers unload Australian cattle from a ship in Jakarta, Indonesia. (Photo: AAP).

Author: Ray Trewin, ANU

The governments of Australia and Indonesia have become heavily involved in the live cattle trade. The 2011 Australian ban on live cattle exports to Indonesia, after some animal cruelty was drawn attention to, may have been the blackest day for Australian agricultural politics. And the issues continue, as governments inappropriately use trade policy to address sensitive domestic non-trade issues (like Australian animal welfare and Indonesian self-sufficiency). But government involvement, rather than disadvantaging trade and livelihoods by raising uncertainty and lowering prices as is the case now, could help solve these issues. Read more…

Why is Indian FDI shying away from South Asia?

Author: Saman Kelegama, Institute of Policy Studies of Sri Lanka

There have been promises of greater Indian investment in South Asia for a long time. A report produced by the Asian Development Bank (ADB) in 2007 argued that India would play a key role in investing in South Asia and this in turn will stimulate intra-regional trade in the region. The report made special reference to the rapidly growing Indian IT industry and identified it as a potential investor in South Asia. The ADB argued that business process outsourcing, knowledge process outsourcing, call centres and other IT related sub-contracting would shift to regional countries as a response to increased costs of doing business in India. Read more…

India and Japan boost cooperation, but no nuclear power deal

Indian Prime Minister Narendra Modi is welcomed by his Japanese counterpart Shinzo Abe upon his arrival at the State Guest House in Kyoto, on 30 August 2014. Modi flew into Japan for a five-day official visit as their governments seek to boost security ties and counter a increasingly assertive China. (Photo: AAP).

Authors: Pravakar Sahoo and Abhirup Bhunia, IEG

Modi’s visit to Japan from 31 August to 3 September was dubbed a success. But what has been achieved? And what do these achievements mean for both countries?

Modi’s visit assumed far greater significance than any previous visits by Indian prime ministers. This is because Modi has a powerful mandate and, of course, because of the reported bonhomie between Modi and Abe. When Modi was Gujarat’s chief minister, Japanese firms participating in the Vibrant Gujarat Summit invested between US$2–3 billion in various manufacturing and infrastructure projects in that state, in response to its investor friendly environment. Modi shares this business friendly attitude with Abe. Read more…

BRICS, banking on development

Night view of skyscrapers and high-rise buildings in Shanghai, China, 30 July 2014. Shanghai will host the headquarters of the BRICS New Development Bank that will challenge for the first time the US postwar dominance of multilateral lending institutions. (Photo: AAP).

Author: Keshav Kelkar, UBC

The creation of the BRICS New Development Bank (NDB) to finance infrastructure and sustainable development projects in emerging economies is a landmark achievement. Developing nations have lost faith in the current system with its strict conditions on development finance and its inability to insulate countries from financial shocks. International observers have however expressed mixed views about the creation of the bank and what it represents for the nascent multilateral BRICS bloc of Brazil, Russia, India, China and South Africa. Read more…

Curbing volatility: the case for monetary policy coordination

IMF Managing Director Christine Lagarde speaks to the media at IMF headquarters in Washington, 16 June 2014. The IMF, in its role as the guardian of the international monetary system, could foster an understanding of the spillovers resulting from unconventional monetary policies of advanced economies. (Photo: AAP)

Authors: Rakesh Mohan and Muneesh Kapur, IMF

Since the onset of the North Atlantic financial crisis (NAFC) in 2008, central banks in the US and the other major advanced economies have pursued highly accommodative monetary policy, including through unconventional policy actions. Policy rates have been near zero in these economies for almost five years, and both short-term and long-term interest rates have touched historic lows. Read more…