Pacific Currents

Rubén Calderón
Portfolio Manager, Fidelity Asset Management, Global Asset Allocation
This article is part of Fidelity Asset Management’s ‘Leadership Series’ and appears here with the express permission of the author

The economic malaise in the aftermath of the global credit crisis has called for extraordinary monetary policy responses, especially in the form of quantitative easing (QE). While central banks have focused on the unique circumstances of their own nations, the collective magnitude of QE has had unintended consequences beyond the borders of their constituencies. This paper will discuss the consequences of QE outside of developed markets—where most of the QE has taken place—and its effects on emerging markets. Specifically, it will highlight the massive liquidity pouring into emerging markets, identify the primary source and reason for the excess liquidity, and provide specific examples of how QE has inadvertently disrupted emerging-market currencies, exports, inflation levels and more.

Ippei Yamazawa
Professor Emeritus, Hitotsubashi University, Japan

APEC 2012 Meetings were successfully held in Vladivostok in September and we have got in recess for a while. The new IAPs by all 21 economies, together with Policy Support Unit’s Progress Reports and Dashboards have been published on the APEC’s website.

At 2010 APEC Yokohama, APEC Leaders conducted the mid-term review of their efforts for achieving the Bogor Goals and renewed their commitment for all 21 economies to continue their IAP process toward its final goals in 2020. We would like to call my fellow experts’ attention to this renewed IAP process and encourage you to closely monitor this process. We believe it is the role for us academics to monitor and advise our senior officials and their staffs to implement the IAPs effectively.

Growth in the Asia-Pacific this year is expected to increase slightly to 3.7 percent from last year’s 3.5 percent. Looking ahead to 2013, growth will be much the same at 3.9 percent. However, these forecasts, based on the IMF’s World Economic Outlook are based on some assumptions: that financial conditions on the Eurozone will ease; expansionary policies in emerging markets will gain traction; and the United States will find a solution to the fiscal dilemma it faces at the end of the year. In short, the downside risks to the forecast are enormous and uncertainty remains abundant.

Chiu Shun Yu, Bonnie
PECC Intern from Hong Kong, China

The Asia-Pacific region envisions the building of a “dynamic and harmonious community”. At the heart of a community is holding something in common – common views, values, beliefs, and direction. Do such shared views exist in the region? If not, what are the divergences?

The Pacific Economic Cooperation Council (PECC) has conducted the State of the Region surveys since 2006, asking the views of opinion-leaders from more than 24 economies in the Asia-Pacific region. Two questions, on short-term economic outlook and regional economic integration, are chosen specifically to examine the region’s views on important economic issues.

Datuk Mahani Zainal Abidin
Chief Executive of the Institute of Strategic and International Studies (ISIS) Malaysia
Chair of Malaysian National Committee for Pacific Economic Cooperation (MANCPEC)

The Institute of Strategic and International Studies (ISIS) Malaysia recently held a Roundtable on Myanmar to better understand the rapid political and economic changes taking place in the country and to learn more about the available business and investment opportunities. The delegation from Myanmar comprised a good mix of young and energetic corporate leaders as well as senior policymakers. Also present was an American academic who has been a longtime watcher of Myanmar.

Peter A. Petri and Michael G. Plummer

© Peter G. Peterson Institute for International Economics. All rights reserved.

SUMMARY

The Trans-Pacific Partnership (TPP) agreement, now in negotiation among nine Asia-Pacific countries, could yield annual global income gains of $295 billion (including $78 billion for the United States) and offers a pathway to free trade in the Asia-Pacific with potential gains of $1.9 trillion. The TPP’s expected template promises to be unusually productive because it offers opportunities for the leading sectors of emerging-market and advanced economies. An ambitious TPP template would generate greater benefits from integration than less demanding alternatives, but it will be harder to sell to China and other key regional partners as the TPP evolves toward wider agreements. The importance of Asia-Pacific integration argues for an early conclusion of the TPP negotiations, without jeopardizing the prospects for region-wide or even global agreements based on it in the future.

Gary Hawke

Sir Brian Talboys had a significant career as a political leader in New Zealand. He was a Minister of Education who managed to remain popular with educationists while not damaging his political career. He was deputy Prime Minister and a leader in international economic diplomacy, especially as a major force in the negotiation of the Closer Economic Relations Agreement with Australia. Had he been willing to give more priority to his personal interests and less to obligations of loyalty- to the Prime Minister of the day, to his political party and to the wishes of the electorate - the "colonel's coup" of 1980-81 might have made him Prime Minister.

Professor Christopher Findlay
Executive Dean of the Faculty of the Professions at the University of Adelaide
Vice-Chair of AUSPECC

Republished from the East Asia Forum

The weather was awful outside the WTO Ministerial Conference in Geneva last week, but there was some sunshine within the convention centre.

Russia acceded as a member, along with Samoa, Montenegro and Vanuatu (the club still attracts new members, and as one minister said: ‘as far as I know, nobody has asked to leave’).

Peter A. Petri
Non-resident Senior Fellow with the East-West Center
Professor of International Finance at Brandeis University

Republished from the East West Center

(This analysis originally appeared in the Honolulu Star-Advertiser on Oct. 16, 2011 as part of a monthly series on regional Asia Pacific issues leading up to the APEC leaders’ meetings in Honolulu in November)

In the last half century, world trade has grown twice as fast as output and helped to lift the majority of the world’s people from poverty—a feat unimaginable a generation ago. When APEC leaders meet in Honolulu next month, they will represent countries that account for half of world trade. Can APEC help to keep the engine humming for another half century?

Plenary: Asia Pacific Regional Outlook and Concurrent Session: Enabling 21st Century Services in the Asia Pacific
Prepared by Youth delegates Angela Zhang Yiou (HK), Muhan Cheng (CT) and Jihye Seon(KO), 29 September 2011

The First Plenary session was moderated by Mr. Zou Mingrong. The first speaker Roberto Cardarelli delivered the Overview and Forecast of the IMF on global economy. During his speech, Mr. Roberto highlighted that slower growth was expected around the world. However, Asia will still exhibit relatively good performance with strong domestic demand. He also mentioned “Two Channels”: trade channel and financial channel. Mr. Roberto concluded that Asia still would have solid growth but monetary tightening and economic rebalancing are required.

Professor Christopher Findlay
Executive Dean of the Faculty of the Professions at the University of Adelaide
Vice-Chair of AUSPECC

Republished from the East Asia Forum

Commentators on these pages have been pondering the implications of the Fukushima explosion on Japan’s energy policy and its strategy for international purchases. Samuels suggests an extensive re-examination of energy policy in Japan and a possible shift toward renewable energy. Vivoda pointed to a scenario in which the share of nuclear power in Japan’s total electricity consumption could fall. This share previously accounted for 30 per cent of consumption, and even as little as 12 months ago the plan was to raise this to 50 per cent.

Global Services Network Update
republished from http://globalservicesnetwork.com/GSNOctober32011.html

Following the Pacific Economic Cooperation Council (PECC) and Asian Development Bank Institute (ADBI) Conference on Trade in Services in Hong Kong earlier this year, the PECC included in their annual survey of opinion leaders across the Asia Pacific the specific question "should APEC members take the lead in promoting a plurilateral agreement on services?"  72% of all respondents responded positively, with only 5% disagreeing. 70% percent of government officials responded positively, as did 76% of business leaders.

Ganeshan Wignaraja
Principal Economist, Office of Regional Economic Integration, Asian Development Bank

Slow progress in the WTO Doha Round trade talks has seen China and India have focussing on free trade agreements (FTAs) as a vehicle of trade strategy and economic diplomacy. By mid-2011, the two Asian giants were among Asia's leaders in FTA activity with 11 each in effect in both China and India. The number of FTAs under negotiation and proposed suggested that such activity will rise in the future, as China has another 13 agreements in the pipeline and India another 20. China has FTAs with ASEAN, Hong Kong, Macao, Chinese Taipei, Pakistan, New Zealand, Chile and Peru, among others.

Don Gunasekera
Senior Economist, CSIRO, Canberra

The 2004 Asian tsunami illustrated the disproportionate impact that natural disasters have on poorer communities. More recent natural disasters in New Zealand, Japan, Australia and the US have shown that even well-to-do communities can be significantly hard hit by the impact of catastrophic and severe weather events. Preparing for natural disasters has many facets. They can range from adaptive response measures to the use of modern technologies to provide early warnings.

Masahiro Kawai, Dean and CEO, Asian Development Bank Institute
Ganeshan Wignaraja, Principal Economist, Office of Regional Economic Integration, Asian Development Bank

The inability to conclude the World Trade Organization (WTO) Doha Development Round has spawned a proliferation of bilateral and plurilateral free trade  agreements (FTAs) across the globe. While East Asia is a relative newcomer to FTAs, the region has seen a dramatic increase in the number of such agreements  in recent years. The explosion of FTAs in East Asia, led by the large economies of Northeast Asia—the People’s Republic of China (PRC), Japan, and the Republic of Korea (ROK)—is tied to the need to support sophisticated production networks through continued trade and investment liberalization, while also serving as a defensive response to the spread of FTAs elsewhere in the world.

Julius Caesar Parrenas, PhD
Senior Advisory Fellow, Institute for International Monetary Affairs (IIMA)¹

(posted from: http://www.iima.or.jp/pdf/newsletter2010/NLNo_37_e.pdf)

The recent G20 and APEC meetings in Seoul and Yokohama underscored the importance of structural reforms. While G20 leaders struggled over the way forward to achieve sustained global economic recovery, APEC leaders went ahead to launch work toward a Free Trade Area of the Asia-Pacific (FTAAP), possibly through the expansion of the Trans-Pacific Partnership (TPP). Embedded in the G20 and APEC leaders’ statements are references to a key issue that will influence the success of current efforts to sustain global recovery and advance free trade.

Yuen Pau Woo
President and CEO, Asia Pacific Foundation of Canada

From: http://www.asiapacific.ca/editorials/presidents-view

Prime Minister Harper and three of his senior cabinet ministers spent much of the last week at two major international gatherings in Asia. The Seoul G20 meeting on 11-12 November was followed by the annual APEC Leaders’ Summit in Yokohama. The close proximity of these two meetings and their overlapping mandates raise important questions about the rapidly changing structure of global governance and Canada’s place in it. In light of Ottawa’s recent failure to secure a seat on the United Nations Security Council, the issue of Canada’s place in regional and global groupings has come into sharper focus.

Preamble

Recognizing the access to adequate food sources as a fundamental requirement for human security and national security, we, the 2010 PECC Youth Delegation have compiled the following report in the hope that it may inform discussions within PECC in regards to the issue of food security.

Introduction

Recent food price hikes have drawn the attention of the world’s policy-makers and news media to food security. But what is “food security” and how can it be measured? For the purpose of this report we have adopted the definition of food security, as defined in the UN Food and Agriculture Organization’s 1996 Declaration on World Food Security:

Dr Hadi Soeastro talking at the USAPC Annual Washington Conference

Dr Hadi Soesastro, founding member of PECC, Executive Director of the Indonesian PECC committee (INCPEC) and international chair of the Pacific Trade and Development Forum (PAFTAD) passed away on 4 May.

Pak Hadi, as he was fondly called by Indonesians and others alike was one of the intellectual founders of regionalism in Southeast Asia and the broader Asia-Pacific.

The food system is one of the economic sectors most sensitive to the potential consequences of price volatility. The expectation is that price volatility will continue for at least the near term. Public and private sector decision makers around the region need the best possible information to address this challenge.