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

Taxing times should prompt move to revenue reform

Authors: Ken Henry and Shane Johnson, ANU

Attempting to address the ‘great corporate tax dodge’ is high on the G20 leaders’ agenda, having endorsed the OECD’s Action Plan on Base Erosion and Profit Shifting (BEPS) at their St Petersburg summit in September 2013. Leaders were prompted by global public anger over multinational companies’ failure to pay their ‘fair share’, and their own concerns about weak tax collections. The real question is whether these issues can be resolved by simply patching up the current system or whether more fundamental reform is needed. Read more…

Is Thailand Southeast Asia’s weak link?

Author: Peter Drysdale, Editor, East Asia Forum

Thailand is Southeast Asia’s second-biggest economy and has been one of its economic success stories over the past decade. The coup after the recent political standoff threatens not only to slash its recent 6.5 per cent growth rate but also trash the fragile foundations of its democracy.

While Indonesia is the region’s largest economy and the epicentre of the ASEAN polity and Singapore is its anchor in trade and financial intermediation with the global economy Read more…

Learning from Thailand’s political woes

Author: Nicholas Farrelly, ANU

With the coup d’etat of 22 May 2014, Thailand vaulted back to its familiar position as a cautionary tale. After much speculation, General Prayuth Chan-ocha announced that the military was, once again, in charge.

Since the second half of 2013 the opponents of former prime minister Yingluck Shinawatra ran an effective and demoralising campaign against her government. Read more…

A clash of expectations: Japan joins the Hague Abduction Convention

Author: Colin P.A. Jones, Doshisha Law School

After years of criticism for being a ‘black hole’ of parental kidnapping and increasingly public diplomatic pressure, Japan is finally a party to the Hague Convention on the Civil Aspects of International Child Abduction. But will it make any difference? Read more…

Will a British defence attaché to DPRK bring the countries closer?

Author: Jim Hoare, SOAS, University of London

On 13 May, Britain’s Minister of State for the Foreign Office Hugo Swire revealed in a parliamentary debate on North Korean human rights that Britain and North Korea had agreed to exchange defence attachés.

The statement attracted little coverage. The British press made no mention of it and only North Korea News picked up the story — in a piece that attracted one comment. Read more…

Time to break down investment barriers between India and Pakistan

Author: Samridhi Bimal, ICRIER

On 26 May, Pakistan’s Prime Minister Nawaz Sharif travelled to New Delhi to attend the swearing-in ceremony of Indian Prime Minister Narendra Modi. This was followed by a period of ‘letter and sari diplomacy’ between the two leaders, in which both expressed their commitment to a peaceful and cooperative working relationship. These moves are unprecedented and point to a significant change in India–Pakistan relations. One of the most promising areas for cooperation is foreign direct investment (FDI). Read more…

The Cambodian fallout from Thailand’s coup

Author: Leng Thearith, UNSW Canberra

Last month saw the 19th coup d’etat in Thailand since 1932 but, unlike previous regime changes, this coup has significant regional implications — especially for Thailand’s neighbour, Cambodia. These are both economic and political. Read more…

We must improve trade connectivity in South Asia

Authors: Bipul Chatterjee and Joseph George, CUTS International

South Asian countries trade with each other far less than they could. The high cost of doing trade in the region, among the highest in the world, is the prime deterrent of trade among South Asian countries. An urgent upgrade of transport connectivity is needed in order to revitalise regional trade and decrease costs.

But there is more to trade connectivity than usually thought, and, in South Asia, improvement in transport connectivity alone may not be enough to spur a rise in trade volume. Read more…

Japanese business needs more incentives than tax cuts

Author: Stephen Stapczynski, Sumitomo Corporation

On 3 June, Prime Minister Shinzo Abe’s Liberal Democratic Party (LDP) cleared a major hurdle to lowering the corporate tax rate. Finance Minister Taro Aso, who had resisted the cut, and Takeshi Noda, the head of the LDP’s internal committee on tax issues, both finally agreed to the tax cut. Japan has one of the highest corporate tax rates among developed economies and private-sector members of the government’s economic council have long been urging the government to lower the tax rate to below 30 per cent. Read more…

China’s growing reach in South Asia

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

China’s economic reach in the South Asian region has grown considerably since the late 1990s, while that of India has lagged behind. In 2012, India’s trade with its South Asian neighbours — those in the South Asian Association for Regional Cooperation (SAARC) — amounted to US$17 billion, compared to China’s trade with the same countries which amounted to US$25 billion. China is currently the largest trading partner of India, Pakistan and Bangladesh, and the second largest trading partner of Sri Lanka and Nepal. Read more…

Scope for an ambitious development agenda in the G20

Author: Homi Kharas, Brookings Institute

On the surface, aligning the G20’s development goals with the United Nations-led post-2015 agenda would seem to be relatively simple. The G20 has called for economic growth that is ‘inclusive and resilient’ as well as strong, sustainable and balanced. Similarly, the post-2015 development agenda is aimed at finding a set of development goals that would be inclusive, transformative and sustainable. Both offer a new commitment to multilateralism in the course of enabling all individuals to grow to their full potential while avoiding environmental threats. Read more…

Capital in twenty-first century China

Author: Wang Feng, UC Irvine

China’s inequality story received only scant attention in Thomas Piketty’s monumental new book, Capital in the Twenty-First Century. Piketty drew data mostly from sources in France, Britain, the United States and, to a lesser extent, Germany, Canada, Japan, Italy and Australia. These are all countries that have large quantities of capital and long histories of capital accumulation. Read more…

Is bigger really better in Sri Lanka’s banking sector?

Author: W.A Wijewardena, Sri Lanka

Since the end of the long civil war in Sri Lanka, the country’s financial and banking sector has been booming. A large number of institutions have sprung up, especially in finance. Throughout this period, the Central Bank prided itself on the ‘stable and resilient’ financial sector amid both domestic and global uncertainties. Yet, in early 2014, it confessed to emerging problems as it announced a Master Consolidation Plan for both banks and non-banks. Read more…

The flawed US indictment of Chinese hackers

Author: Claude Barfield, AEI

On 19 May, the US charged five Chinese army officers with hacking into American companies in the first cyber-espionage case of its kind. In defending the administration’s actions, its lead spokesman, Assistant Attorney General John Carlin, adopted an indignant, highly moral tone, alleging that Unit 61398 ‘stole information particularly beneficial to Chinese companies and took communications that would provide competitors with key insight into the strategies and vulnerabilities of the victims…This is not conduct that responsible nations within the global community should tolerate’. Read more…

Can the G20 deliver new direction?

Author: Peter Drysdale, Editor, East Asia Forum

The G20 summit in Brisbane in November this year will be held, almost to the day, on the sixth anniversary of the first summit in Washington in 2008. The leaders’ level meeting was born in a time of crisis and panic, with the world economy facing the danger of a total collapse of the financial sector in the United States and its inevitable spread to the rest of the world. While there are still deep problems in the industrial economies of Europe — with massive unemployment levels, especially among the young, and most economies barely on the mend — the United States is steadily moving out of recession and global economic confidence is on the mend. Read more…