Publication in Economics, Politics and Public Policy in East Asia and the Pacific

Nation builders & shape shifters: ASEAN’s great men & their legacies

Author: Ernest Z. Bower, CSIS

Transforming swamps and paddies into roads and factories, Southeast Asia’s ‘great’ leaders built nations, wrenching post-colonial commodity-based economies into newly industrialised nations seemingly on pure will. These men will forever be known as nation-builders and rightly so – Indonesia’s Soeharto, Singapore’s Lee Kwan Yew, Malaysia’s Mahathir Mohammad, Ferdinand Marcos in the Philippines, Burma’s Ne Win, and King Bhimipol Adulydej in Thailand.

Yet their legacies are not as straightforward or literal as the runways and buildings they erected. Read more…

Indian monetary policy and the RBI – Let’s focus upon inflation

Author: Rajiv Kumar, ICRIER

The Reserve Bank of India (RBI) has acted according to expectations in attempting to restrain inflationary concerns and sustain gross domestic product (GDP) growth rate by freeing up investment demand. I doubt it is possible to argue against the RBI moving to a tighter monetary policy stance in the given circumstances. But in its latest move, the RBI has underestimated the inflationary risks and not acted strongly enough in a situation where it faces substantially greater pressure on liquidity management and where global commodity prices could be rather volatile, and possibly move upwards. The RBI should have set a lower growth rate target.

The RBI projects GDP growth rate for 2010-11 at 8 per cent with the possibility of an increase. But the RBI has overlooked some major risks to GDP growth. Read more…

Asia’s obligations in the new order

Author: Mohamed Ariff, MIER

Having been in the thick of the global economic crisis, Asia can now play a pivotal role in the post-crisis rebalancing exercise.

Although regional cooperation efforts in Asia after the 1997-98 Asian financial crisis were largely reactive and inward-looking, it is important to note that individual economies in the region maintained their outward-looking posture. Read more…

Japan’s leaders must show leadership

Author: Gerald Curtis, Columbia University

Enthusiasm among the Japanese for the Democratic Party of Japan ran high when it came to power last autumn. People were stunned by cabinet ministers speaking their own words rather than reading from scripts prepared by bureaucrats. They believed it when DPJ leaders said the prime minister and cabinet would decide policy rather than continue the practice of mostly rubber-stamping decisions made by civil servants. It seemed to many that Japan was going to have a new kind of politics – more open and responsive to average citizens than to the special interests that had captured the Liberal Democratic Party.

Eight months later hope has turned to disappointment. Read more…

A new dawn in Japanese politics?

Author: Tobias Harris, MIT

On Thursday, Masuzoe Yoichi, former minister of health, labor, and welfare and the most popular politician in Japan, will inform the LDP that he is exiting the party. On Friday, he will announce the formation of his own party (for now, the Masuzoe New Party), which is projected to have enough members to clear the five-member minimum to be considered a party and be eligible for public election funds. Whether and how many LDP members will follow Masuzoe out remains to be seen, but if Masuzoe has decided to exercise his exit option instead of trying to reform the LDP from within, who among the LDP’s reformists will continue to try to force the party’s leadership to change its way?

Masuzoe’s decision comes after the LDP virtually dared Masuzoe to leave: at a meeting of LDP Diet members last week, several members suggested that if Masuzoe isn’t willing to work with the executive he should leave.

Read more…

Building on Asia

Author: Simon Tay, SIIA

The ASEAN summit ended Friday 9 April in Hanoi not only with further plans for its ten members but also ways to widen Asian dialogues. Most agree to now include the USA and also Russia.  There are however differences over how best to do so.

The differences are not well understood. One suggestion is to expand the existing East Asian Summit (EAS), in which ASEAN annually hosts the six leaders of China, Japan, South Korea, India, Australia and New Zealand. Read more…

US engagement with Asia – Weekly editorial

Author: Peter Drysdale

The United States is heading towards a crunch point in re-shaping its relationships with Asia. It’s not that there are big immediate issues to deal with —although  the problem of North Korea is active again, with unresolved questions over the sinking of the South Korean naval vessel, the Cheonan. Rather, it’s the imperative of follow-through on the commitment that America’s first Pacific President, Barack Obama (‘ a guy who actually grew up in Indonesia for several years’ ) and Secretary of State, Hillary Clinton, have made to staking out America’s long-term strategic economic and political claims in Asia before the time has passed.  There have been recent contributions to EAF on America’s regional interests from Vogel, Pempel and Bower.

Deep down these new American commitments are motivated by a growing anxiety about the neglect of American interests in the fastest growing part of the world and how the rise of China will impact on them if the neglect continues any longer. Read more…

ASEAN and American engagement in East Asia

Author: Donald Emmerson, Stanford University

Former US Secretary of State Dean Acheson entitled his 1969 memoir Present at the Creation — the creation of a global order from the rubble of World War II. Joining or ignoring the East Asia Summit (EAS), some might say, is a comparably weighty choice — between being present or absent at the creation of an East Asian regional order in the wake of the Cold War.

The choice is conditioned by time and space. The East Asia Summit has been meeting without the United States since 2005. The Obama administration, unable to travel back in time to the Summit’s creation, can only be present or absent at its maturation. Read more…

How November defines US engagement in Southeast Asia

Author: Ernest Z. Bower, CSIS

Put yourself in US assistant secretary of state for East Asian affairs, Kurt Campbell’s shoes – National Security Council Senior Director for Asia, Jeff Bader’s moccasins would work too – and think about this November. It’s not quite a horror movie – more like ‘Gallipoli’.

The scene is Bader’s office in the Old Executive Office Building, the camera slowly pans 360 – security safe a crack open with papers hanging out, cabinet spilling over with books on various moments in Asian history, half empty take-out container with braised tofu teasing mold, couch rumpled – looking slept on, 14 foot ceilings feeling unappreciated. Read more…

An Asian perspective on financial crises

Author: Stephen Grenville, Lowy Institute

Andrew Sheng’s recent bookFrom Asian to Global Financial Crisis, is a balanced judgment upon the relationship between the Asian and Global Financial Crises. Sheng’s analysis is important not only for its historical value – it also presents a basis for the creation of durable solutions to current structural problems in the global economy.

Sheng brings a diverse but relevant experience to this financial history: he has been central banker, corporate regulator, academic, and World Bank official. He has observed, first-hand and close up, the amazing development of East Asia’s financial sector in Malaysia, Hong Kong and China. Read more…

Should Asia begin to look within?

Author: Amitendu Palit, NUS

The aftermath of the financial crisis has opened a new can of worms for Asia. The region has to decide its degree of dependence on the non-Asian world. The decision is anything but easy.

Just about a decade ago, the Asian financial crisis had hit the region. The crisis saw the region responding in a collective manner; to figure out Asian solutions to Asian problems. Circumstantial imperatives led to a revival of Asian regionalism. A key driver of such regionalism was the disappointment with the quality of response from the West. Read more…

China’s partnership of stability in Xinjiang

Author: Tom Cliff, ANU

Xinjiang has once again faded from global attention after a brief spate of interest in the wake of the Urumqi riots in July 2009, but a recent series of high-level meetings in Beijing convened specifically to lay out strategy in relation to Xinjiang, and top leaders doing inspection tours of the region this year is proof that China’s Central leadership continues to take the situation very seriously.

Long before the ethnic clashes between Uyghur and Han in Urumqi in July last year (the ‘7/5 incident’), the Xinjiang and Central authorities were already far more concerned about dissatisfaction within the Han community than about the possibility of a Uyghur uprising. Read more…

Japan’s postal reform and the farmers

Author: Aurelia George Mulgan, UNSW@ADFA

One of the major criticisms of the Hatoyama administration’s postal reform plan has centred on the proposal to maintain more than a third of Japan Post Bank shares in government hands and to raise the cap on individual savings deposits from ¥10 million to ¥20 million. This will make it harder for private sector financial institutions, particularly small and medium-sized institutions in regional areas, such as regional banks and credit unions, to compete with Japan Post Bank because of the implicit government guarantee on postal deposits. Under these conditions, people will inevitably shift their savings into Japan Post Bank.

It is not often that Japan’s agricultural cooperative organisation (JA, or Japan Agriculture) is on the side of free and fair competition, but on this issue its message to the government has been loud and clear. Read more…

India should continue to look East

Author: Amitendu Palit, NUS

India did not look to the East for a long time. The best and brightest from India travelled to the West for learning and living and Indian business was far more comfortable looking West even during the days of tight control. Oddly enough, the US and Europe remained India’s largest trade partners, even during the committed years of rupee-rouble trade between India and the erstwhile Soviet Union. While the Cold War did not put an end to India’s economic ties with the West, despite expectations to the contrary, it saw India neglecting the East for a major part of the last century.

India’s neglect in favour of the West hurt its own economy more than the Eastern Asian region. Read more…

The new Spice War: China, Japan and rare metals

Author: Ming Hwa Ting, University of Adelaide

During the eighteenth and nineteenth century, there was a great deal of competition between European powers, such as Britain and the Netherlands, to expand their influence and control in Southeast Asia. The region provided many economical advantages including the highly lucrative spice trade. What is unique about spices is that only a little amount is needed to preserve and improve the taste of food. However, with the advent of refrigeration, demand for spices decreased as new and more effective methods of food preservation were found, in consequence spices became less valuable.

Currently, there are signs that a new ‘spice war’ is on the horizon. Read more…