-East-Asia-and-the-Global-Economic-Order翻译报告课件

EastAsiaandtheGlobalEconomicOrderKeyQuestionsCantheglobaleconomicorderbereformedtoreflectEastAsia’sgrowingweight?HowhastheriseofEastAsiachangedtheglobaleconomicorder?HowwillEastAsiaaltertheglobaleconomicorderinthefuture?

EastAsiaandtheGlobalEconomicOrderRequiredReadingsRapkin,D.P.&J.RStrand.“IsEastAsiaunder-representedintheInternationalMonetaryFund?,”InternationalRelationsoftheAsia-PacificVol.3,No.1,2003.Wade,R.“Japan,theWorldBankandtheartofparadigmmaintenance:TheEastAsiaMiracleinpoliticalperspective,”NewLeftReview,No.217,1996.EastAsiaandtheGlobalEconomicOrderGrenville,S.&M.Thirlwell.AG-20CaucusforEastAsia,Sydney,LowyInstituteforInternationalPolicy,2009.

T.Hamashita.China,EastAsiaandtheGlobalEconomy:RegionalandHistoricalPerspectives(Routledge,LondonandNewYork,2008),Chapters1(1-12),2(12-27),4(39-57)and6(85-114).EastAsiaandtheGlobalEconomicOrderGlobalStrategicTrends(2018):ImaginingEastAsiain2050.TheDiplomatThetributetradesysteminAsiaHamashitaReadingAsianhistoryAsnotedinearlierlectures,EastAsianhistorywasbroadlyunderstoodasthehistoryofaunifiedsystemcharacterisedbyregion-widetributetraderelations,withChinaatthecentre.Ineconomicterms,tributewasthusmanagedasanexchangebetweensellerandbuyerwiththe“prices”ofcommoditiesfixedinadvanceoftrade.ThetributetradesysteminAsiaThetributarysystemanditstransformationThetributarysystemchangedfromthreedevelopmentsinmodernAsia.“Tributary”stateswereactually“equal”tradingpartnersintheirownright.Thetributarytraderunonthegovernmentlevel,hadbecomelessandlessprofitableinthe1900s.Inthe1990s,formertributarystatesadoptedWestphalianinternationalprinciplesandmethods,thatis(thateachnation-statehadsovereigntyoveritsterritoryanddomesticaffairs).Now,let’slookatthecurrentinternationalorganisationsthatareassociatedwithEastAsia’seconomy.InternationalMonetaryFund(IMF)RapkinReadingIntroductionTherapideconomicascentofEastAsiancountriesoverthelastseveraldecadesextendstheusualproblemoflaggedinstitutionaladjustment.Thatis,largeglobalinstitutionsliketheIMFtakesometimetoadjusttheirpoliciestochangingworldrealities.Thefinancialcrisis(1997)broughttothesurfacedeepdifferencesbetweenmanyAsiancountriesandtheIMFoveranumberofissues.IMFIntroductionIMF:Eachcountry’sparticipationintheorganisation’sweightedvotingschemereflectsthefollowinglogic:Relativeweightinworldeconomy→sizeofquotas→numberofvotes.QuotasubscriptionsarecentraltotheIMF’sfinancialresources.EachmembercountryoftheIMFisassignedaquota,basedbroadlyonitsrelativepositionintheworldeconomy.Amembercountry’squotadeterminesitsmaximumfinancialcommitmenttotheIMF,itsvotingpower,andhasabearingonitsaccesstoIMFfinancing.IMFHowarequotasdetermined?ThecurrentquotaformulaisaweightedaverageofGDP(weightof50percent),openness(30percent),economicvariability(15percent),andinternationalreserves(5percent).Forthispurpose,GDPismeasuredthroughablendofGDP—basedonmarketexchangerates(weightof60percent)andonPPPexchangerates(40percent).Theformulaalsoincludesa“compressionfactor”thatreducesthedispersionincalculatedquotasharesacrossmembers.IMFQuotasaredenominatedinSpecialDrawingRights(SDRs),theIMF’sunitofaccount.ThelargestmemberoftheIMFistheUnitedStates,withacurrentquota(asofMarch2017)ofSDR82.99billion(aboutUS$118billion),andthesmallestmemberisTuvalu,withaquotaofSDR2.5million(aboutUS$3.5million).IMFTheconditionsforimplementingthequotaincreasesagreedunderthe14thGeneralQuotaReviewweremetonJanuary26,2016.Asaresult,thequotasofeachoftheIMF’s189memberswillincreasetoacombinedSDR477billion(aboutUS$677billion)fromaboutSDR238.5billion(aboutUS$339billion).AsofSeptember2017,181ofthe189membershadmadetheirquotapayments,accountingforover99percentofthetotalquotaincreases,andtotalquotasstoodatSDR475billion(aboutUS$675billion).IMFHowarequotasdetermined?Quota-determinationprocessappearsarbitraryand/oradhoc:Whilethevariablesusedintheformulasarenotunreasonable,theoverallrationaleforthesevariablesandtheweightsassignedtothemisnotself-evident.Actualquotasdeviatefromcalculatedquotasthroughanegotiationprocesswhichislesstransparent.Anychangesingeneralquotareviews(GQR)largelydependsonthediscretionoftheExecutiveBoard,whicharenotalwaysopenandtransparent.IMFEssentiallytheindicatorsofacountry’srelativepositionintheworldeconomyShareofglobalproductShareofworldtradeShareofinternationalreservesQuota-determinationmethod:variabilityofcurrentaccountreceiptsUsethisasanindicatorofvulnerabilitytobalanceofpaymentsdisequilibria,andthusasameasureofneedtoaccessIMFresources.IMFComparisonsacrossvariables,regionsandcountriesNorthAmerica(USandCanada):7%oftheworld’spopulationascomparedtoa18.75%quotasharein2019.EastAsia:33%oftheworld’spopulation;however,ithasonly14%ofthetotalquota(2019).Oilproducers(OPEC)holdabout9%oftheIMFquota,asharethatexceedstheirrelativelysmallsharesoftheselectedeconomicmeasures.Developingcountrieshavealargerquotashare(26%)thantheircombinedsharesofeitherworldGDP(14%)orworldtrade(16%).IMFComparisonsacrossvariables,regionsandcountriesConclusionsEastAsia’squotasarelowerthanwouldbeexpectedinrelationtotheirrelativeweightintheworldeconomy.Atthesametime,oilproducersandthedevelopingworld’squotasharesarelargerthanexpected.Areflectionoftheirpoliticalcloutratherthaneconomicsize.WorldBankWadereadingTheWorldBank’s(WB)PositionandPowerTheWBenjoysauniquepositionasageneratorofideasabouteconomicdevelopmentItsabilitytoframeeconomicdebatesaroundtheworldrestson3factors:Itcaninfluencethetermsonwhichlow-incomecountriesgainaccesstointernationalcapitalmarketsIthasaresearchandpolicy-designbudgetfarlargerthanthatofanyotherdevelopmentorganisationIt’sreportsattractconsiderableglobalmediacoverage.WorldBankJapan’sattempttochangeorthodoxyBackgroundJapanhascometomatterforinternationalfinancialinstitutionsthroughitsgenerousaidprogrammesandforeigninvestment.Bytheearly1980s,Japanwasalreadytheprincipalco-financierofWBloans.In1990itbecamethesecondbiggestshareholderintheInternationalFinanceCorporation.In1992itbecamethesecondbiggestshareholderintheInternationalMonetaryFund.WorldBankJapan’sattempttochangeorthodoxyFourKeyReasonsOne.IdeologicalconvictionTheyemphasizetheroleofinterventionistpoliciesinJapan’sowndevelopment–selectiveinterventionscanhelpJapaneseaidbemoreeffective.Theybelievethisismoreeffectivethatleavingthingstothemarket.Two.Organisationalinterest:JapanactuallybelievesitisintheWorldBank’sowninteresttohaveinterventionistpoliciessinceitcanbettermanageoutcomesandallowittobetteradjusttochangingcircumstances.WorldBankJapan’sattempttochangeorthodoxyReasonsThree.NationalmaterialinterestBuildingapowerfulmarketpositionacrossEastandSoutheastAsiaisaJapan’stopobjective.GettingtheWBtoadmititsinterventionistpolicieswouldhelptoadvancethisagenda.Four.NationalismThedesiretoovercomeasenseofbeingjudgedinferiorbyrepresentativeofotherstatesormultilateralfinancialinstitutions.WorldBankJapan’sattempttochangeorthodoxyWhyWBwasResistanttothis?ConcessionalcreditfromtheJapaneseaidbudgetmakesWBcreditlessattractive.TheJapaneseemphasisondirectedcreditiscontrarytotheBank’semphasisonfinancialsystemderegulation.ItwouldrisktheBank’sabilitytoborrowatthebestratesonworldmarketsanditsreputationasacountry-ratingagency.WorldBankJapan’sattempttochangeorthodoxyWhyWBisResistanttothis?ItwouldrunagainstthestrategicanddiplomaticpoweroftheUSAsU.S.usedtheBankasaninstrumentofitsownexternalinfrastructurepowertoagreaterdegreethananyotherstate.AroundtwothirdsofWBeconomistsarecertifiedbyUSuniversities.TheBank’sconstitutionrequiresittobe‘apolitical’.WorldBankJapan’sattempttochangeorthodoxyWhyWBisResistanttothis?TheBankseestheJapanesepositionasposingathreatnotonlytoitselfbuttoitsborrowersbynotfollowingthemarketbutrathermakinginvestmentdecisionsbasedonothernon-marketcriteria.Essentially,theWorldBankwasconcernedthatamoreinterventionistapproachwouldlimititsabilitytoactquickly,flexiblyandconcertedly.WorldBankEconomicOrthodoxyVS.EastAsianModelStageOne:In1991,theJapaneseMinistryofFinance(MOF)pressedthebanktomakeathoroughstudyofEastAsiandevelopmentexperience.StageTwo:AroundMarch1993,itstartedwithseveralroundsofdiscussionathigherlevelsoftheapprovalhierarchyandthestudywasfinallypublishedinSeptember1993.StiglitzandYusufLet’snowseehowStiglitzandYusufaddresstheEastAsianrecoveryfromthefinancialcrisisofthelate1990sandwhatthefutureholds.TheyclaimthatmostEastAsianeconomiesexperiencednegativegrowthin1998duetotheAFCbutrecoverysetinquicklyafterwards.Theunderlyingfundamentalsweregood–industrialcompetitiveness,strongexports,FDIandhighsavings.Thiswouldcontinuetopropelgrowth.FDIalsoenhancesnewtechnologyuptake.StiglitzandYusufFDIwasalsoencouragedbythedollar-pegregimesincestableexchangeratesreducerisksforinvestors.FDIwasalsoencouragedbyLRstrengthoftheeconomies,industrialcompetitivenessandcompetitivelabourcosts.AnimportantlessonsforEastAsiangovernmentswashowpolicymakerscouldbenefitfromthelessonsoftheAFC.Lessonsincludedmarketfailuresresultingfromherdbehaviourasinvestorsfledwithmoney.Moralhazard(lackofincentivetoguardagainstriskwhereoneisprotectedfromitsconsequences,e.g.byinsurance)wasanotherfactor,asgovernments(andtheIMF)bailedinstitutionsoutforpoordecisionsandinvestorsgotofflightlyandtherewereproblemsofasymmetricinformationrelatingtothefinancialpositionsofbanks.StiglitzandYusufAfeatureofmanyEastAsianeconomieswastheparadoxicalco-existenceofastrongindustrialsectorandaweakfinancialsector.Sotheroleofgovernmenthasbeentocorrectmarketfailuresinthefinancialsector.Policycanbeaimedat:Reformingthefinancialsectorwhenappropriate.Strengtheningareassuchasinfrastructure,roads,schoolsandtransport.Strengtheningregulationwhereappropriateastheeconomybecomesmoredeveloped–egreplacingmonopolieswithcompetition,privatisingbanks,loweringtradeprotectionandfacilitatingsocialprotectionthroughdirectincometransfers.StiglitzandYusufTorecapwhattheStiglitzandYusufpublicationissaying,theEastAsiancountrieshavebeenremarkablyeffectiveinnurturingmanufacturingsectorsabletocompeteininternationalmarkets.Theywerelesssuccessfulindevelopingthefinancialsector,hencefinancialvulnerabilitypersistedevenduringthemiracleyears.ThisvulnerabilitycontributedtotheAFCof1997-98.StiglitzandYusufAnimportantobservationintheStiglitzandYusufpublicationisthatthesuccessofthemanufacturingsectorandtheweaknessoffinancialsectorscoexistedinthepast.Thecurrencycrisisof1997-98wasstronglyaffectedbythelatterfactor.ThecrisiswasNOTthefailureofmanufacturinginEastAsia.Thereforeoncetheweaknessofthefinancialsectorisaddressed,EastAsianeconomiescanachievehighgrowthratesagain.WenowturntotherolestheG7andG20canplayinbringingEastAsiancountriesontheworldstage.G7GrenvillereadingRoleandmembershipoftheG7Itstartedin1975anddealswithglobaleconomicoutlookandmacroeconomicmanagement.ItsubsequentlybecametheG8andthenonceagainrevertedtotheG7withtheexpulsionofRussiain2014duetoitsannexationoftheCrimea.OnlyoneregionaleconomyofEastAsia-JapanisatthetableoftheG7.G20TheriseoftheG20TheG20wasborneoutofcrisis(1997)anditconsistsoftheGroupof20financeministersandcentralbankgovernors.Itoffersamoreeffective,representativeandlegitimatebodythantheG7.G20makesspaceforafurtherfiveforEastAsia:China,India,Indonesia,SouthKoreaandAustralia.G20offersEastAsiaamajoropportunitytohelpshapetheinternationaleconomicenvironmentbutalsoposestheregionwithasignificantchallenge.G20CaucusforEastAsiaTherightmembershipTheG20CaucusforEastAsiaincludesalltheregionalmembersintheG20(Australia,Japan,Korea,Indonesia,IndiaandChina);thismaximisestheinfluenceofthecaucuswithinthelargergrouping.Allsixofthesecountriesarealsomembersofthe16-countryEastAsiaSummit.Thisprovidesanaturallinkbackintoawiderregionalforum.G20CaucusforEastAsiaTopicsthecaucusshouldconsiderThestartingpointhastobetheG20agenda,thatfightforstrong,sustainable,andbalancedgrowth.TheexistingagendaneedtobejuxtaposedagainsttheinterestsofthecaucusmembersandthefeasibilityofachievingaconsensusG20CaucusforEastAsiaImplicationsfortherestofEastAsiaThreekeyBenefits:EnhancingthestatusandoperationalusefulnessoftheEAS,strengtheningthecurrentregionaleconomicarchitecture.(2)OtherregionaleconomiescouldfiltertheirownviewsintoG20bythesamelinktotheEAS.(3)Produceagreaterregionalvoiceonglobalissues.G20CaucusforEastAsiaChallenges:Itwillhavetoovercomethesuspiciononthepartofnon-members,assomemightseeitasanattempttousurporsidelineexistingregionalstructureslikeAPEC.(2)Itwillneedtopromotetheideathatthecaucusisaninformalsupplementtoexistingregionalstructures,notareplacement.G20CaucusforEastAsiaImplicationsfortherestoftheG20AsuccessfulEastAsiacaucuscouldbridgethegapbetweenAsianeconomiesandnon-Asianeconomies.

BycontributingtowardsamoredynamicAsianvoicewithinG20,thecaucuswillhelpkeeptheG20relevantandotherleadersengaged.Thiswouldbeausefulsteptowardsamore‘bottom-up’internationalarchitectureandthenbringthisconsensustotheoverarchingG20framework.EastAsia’sFutureImpactontheGlobalEconomyLet’snowbrieflyexaminehowEastAsiacouldaltertheglobaleconomicorderinthefuture.EastAsiawillhaveanimpactontherestoftheworldinfourcriticalareas–humandevelopment,theeconomy,governanceandgeopoliticsandsecurity.NortheastAsiahasrelativelystronglevelsofhumandevelopment,yetthistrendmaychangeinthefuture.EastAsia’sImpactontheGlobalEconomyTheUKMinistryofDefencethinktank,theDevelopment,ConceptsandDoctrineCentre(DCDC)arguesthatanagingpopulationisacorechallengeforNortheastAsiancountries.Aswilltheeconomy,governance,educationandgeo-politics.EastAsia’sagingpopulationisthefastestgrowingglobally,withapredicted“434millionpeopleovertheageof65by2050.”EastAsia’sImpactontheGlobalEconomyInChina,thisisaresultoftheprevious“onechildpolicy”andwillcausehighdependencyratios—theproportionofchildrenandelderlytoworkingadults.

HumandevelopmentinChinaandHongKongwillthereforebeaffectedbythegrowingelderlypopulationalongwithslowedeconomicgrowth.Chinahasrespondedbyincreasingitssocialsafetynets;however,itremainstobeseenhowChinawillsustainitswelfareprograms.EastAsia’sImpactontheGlobalEconomyHumandevelopmentinSoutheastAsia

variesacrosscountries,withhighhumandevelopmentlevelsinSingaporeandBruneibutlowlevelsinLaos,Cambodia,andMyanmar.AswithNortheastAsia,SoutheastAsia’shumandevelopmentlevelswillbeaffectedbyanagingpopulationandadecliningbirthrate,particularlyinThailandby2025andSingaporeby2045.Manycountriesmaywellneedto‘import’labourthroughimmigrationschemes.Singapore’s

governmenthasinitiatedschemes

toassisttheelderlyandschemesto

improvethebirthrate.TheseschemeshavehadonlyalimitedeffectandSingapore’sdependencyratiowillstillbeachallengeinthefuture.EastAsia’sImpactontheGlobalEconomyAnotherkeyconcernintheregioniseducation,specificallysecondaryschooleducation.SoutheastAsiancountrieshavediversesecondaryschoolratesrangingfromhighratesofcompletioninBrunei“tobelow75percentforMyanmar.”SoutheastAsiancountrieshaveinvestedheavilyinpost-primaryeducationyetthequalityofeducationmaynotmatchemploymentrequirementsofthefuture.Manycountries–EastandSouthAsiawillcontinuetoimportwesterneducationservicesfromwesterncountriesliketheUK,USA,CanadaandAustralia,notonlyatthepost-secondarylevelbutincreasinglyattheprimaryschoollevel.EastAsia’sImpactontheGlobalEconomyWenowturntotheeconomy.DCDCforecaststhatNortheastAsiawillaccountfor25percentoftheglobaleconomy,withChinabeingaleadingeconomicgiant.TheNortheastAsianregionwillalsoaccountfor29percentofglobaltrade.Muchoftheeconomicboomwillbeuneven,however,withurbanizationexpandingintechnology-drivenmegacitiesinJapanandChina.Economicgrowthisalsoexpectedtobespurredbytheriseofe-commerceandbiotechnology,whichisprevalentthroughSouthKoreaandJapan.BiotechnologypatentsinJapanandChinaisexpectedtofallinnumberscomparedtootherOECDcountries.Moreimportantly,NortheastAsiancountries,especiallyChina,willfinditchallengingto

trainthepopulation

ifthescopeofe-commerceande-businessincreasesnationwide.EastAsia’sImpactontheGlobalEconomyWenowlookatgovernance.SomeNortheastAsianjurisdictions–Japan,Korea,ChineseTaipeiaredemocraciesanddevelopedeconomies.Yettheymayalsofacecallsforgovernancereformssuchasgreaterfemalerepresentationintheworkplaceandleadershippositions.EastAsia’sImpactontheGlobalEconomySoutheastAsiangovernmentshavebeensemi-democratic(tovaryingdegrees)fordecades.DCDCneverthelesspositsthatmanySoutheastAsiangovernmentsmaynoteasilyshifttodemocracies.EastAsia’sImpactontheGlobalEconomyWefinallyturntogeopoliticsandsecurity.EastAsiawillcertainlyfacedifferingthreatsinthefuture.UK’sMinistryofDefencenotesthatboarderandterritorialdisputesbetweenNortheastAsiannations—includingRussia’sPacificborder—couldbecoreflashpointsinthenextfewdecades.ItalsoassertsthatNorth