APEC 2009 Meeting: Sustaining Growth, Connecting the Region
Tuesday, 1 December 2009
This Asia Society event was co-sponsored with WEAI, the National Center for APEC, the Asian/Pacific American Institute, and the U.S. Council for International Business and held at the Asia Society, NYC. The briefing began with a panel of speakers representing the 2009 to 2011 APEC host nations: Singapore, Japan and the United States. Sharon Chan, First Secretary of Political/Economic Affairs at the Embassy of Singapore in the U.S., gave the opening comments. She reaffirmed the core principles of APEC: open trade and markets and a rejection of protectionism. Ms. Chan noted that President Obama endorsed the Trans-Pacific Partnership, which could become the core of the Free Trade Area of the Asia Pacific. Monica Whaley, Executive Director of the National Center for APEC and moderator of the panel, praised Singapore for the flexibility and leadership it displayed during the financial crisis. Representing Japan was Ambassador Shinichi Nishimiya, Consul General at the Consulate General of Japan in New York. Ambassador Nishimiya offered three reasons that 2010 would be an important year for APEC. First, 2010 is the deadline for achieving the Bogor goals. Second, after the disruption of the world economy, 2010 will be a year to rethink, reset and reconfirm the principles under which world economies are managed. Third, it is the year before the United States will chair APEC. Ambassador Nishimiya was enthusiastic about this triple sequence of 2009-2011 APEC chairs, seeing it as an opportunity to engage in long-term, strategic thinking for APEC. The final panelist was Kurt Tong, Economic Coordinator and U.S. Senior Official for APEC at the Bureau of East Asian and Pacific Affairs, Mr. Tong started his comments by reflecting upon the United States’ domestic circumstances. He stated that one of President Obama’s major goals is to raise exports and create jobs. Therefore, with 2011 would come a reiteration of the shared view in the United States that exports equal jobs. Mr. Tong stated that APEC is the most important venue for trade in the region, accounting for 53% of world GDP and 58% of purchases of U.S. goods. He also mentioned other upcoming events of global importance, calling on world leaders to reach a conclusion of the WTO Doha Round of trade negotiations in 2010 and to establish clear direction on climate change at the Copenhagen Climate Conference. He emphasized how human security is linked to food security and that now, while there are still sufficient food supplies globally, is a critical time to address food security challenges.
Economic Recovery and Growth in Asia and the Pacific
Monday, 23 November 2009
Co-sponsored with CJEB
Haruhiko Kuroda, president of the Asian Development Bank and former vice minister of finance in Japan, outlined the effect of the global financial crisis on Asia. Shang-Jin Wei, the N.T. Wang Professor of Chinese Business and Economy and director of the Jerome A. Chazen Institute of International Business, provided commentary. Mr. Kuroda said the collapse in global demand hit Asia's exports hard; the region was especially vulnerable because its trade is composed largely of components for supply chains. The most open, trade-dependent economies, particularly the newly industrializing economies and several important Southeast Asian economies, suffered the largest declines. However, the region has proven resilient. Mr. Kuroda explained that the ADB has revised upward its forecast for developing Asia for several reasons: Asia's banks held very little of the toxic assets that sent the financial world reeling; following the 1997-98 Asian financial crisis, Asian banks made sure its markets were well capitalized, budgets were well managed, and foreign reserves remained high; and because they enacted timely fiscal stimulus and easy monetary policies which proved highly effective in keeping regional growth moving. The key challenge now is to convert the strong rebound to sustained recovery. Stimulus exit strategies must be carefully timed. If left too long, they will be unsustainable; if withdrawn too soon, the region's recovery could be derailed. Mr. Kuroda stated that Asia has an opportunity to help reform the global economic architecture as well as encourage closer and more systematic regional cooperation for enhanced intraregional trade. He cited the work of regional associations, in particular, the Association of Southeast Nations plus China, Japan, and South Korea, or ASEAN+3. The Chiang Mai Initiative, a reserve pool that Mr. Kuroda helped establish while working in the Japanese government, can act as a regional supplement to International Monetary Fund policies and monies. Mr. Kuroda also cited ways to address the issue of global rebalance. Right now, the industrialized world has too much debt, while the emerging economies have too much savings. The latter group needs to encourage domestic demand, which will make them less vulnerable in the event of another slump in demand for Asian exports. In his commentary, Professor Wei noted that global financial surveillance mechanisms did not fully predict the global financial crisis, citing positive statements made by the IMF on the eve of the crisis. He suggested a need to refocus on other issues affecting global and regional economies. For instance, he questioned whether more flexible exchange rate regimes mean faster current account adjustments. Although there is a connection, a flexible exchange rate regime doesn't automatically mean a balanced current account. Another area for future focus is that of social policy, for instance in China’s family planning policy. He linked the 120 men / 100 women ratio to higher personal savings rates, which improve the men’s marriage prospects. Mr. Kuroda and Professor Wei agreed that, while global imbalances contributed to the global financial crisis, imbalances were not the only cause. The world’s two largest economies need to address their high debt vs. high savings rates. Shoring up foreign reserves provides some insulation, but does not guarantee a country will not be affected by a global crisis. Furthermore, the possibility appreciating the Chinese renminbi puts it at risk of vaporizing hundreds of billions of dollars in foreign exchange reserves and other dollar assets. These and other thorny issues need to be worked out on the global and regional stages - and because of its growing prominence, Asia is well poised to hold influential positions in these debates.
In the Aftermath of the Global Economic Crisis:
Redesigning the WTO for the 21st Century
Monday, 9 November 2009
This event was co-sponsored by SIPA’s Program in International Finance and Economic Policy. This panel featured Debra Steger, Professor at the Faculty of Law at the University of Ottawa, who spoke about the state of the World Trade Organization (WTO) and its future. Michael Ewing-Chow, Professor at the Faculty of Law at the National University of Singapore, provided comments and Merit E. Janow, Professor of International Economic Law and International Affairs and Director of the Program on International Finance and Economic Policy at Columbia University’s School of International and Public Affairs, moderated the discussion. Professor Steger started off her analysis of the current state of the WTO by giving the audience reasons for optimism. She affirmed that the WTO has developed a strong dispute settlement system and a rules-based system. The WTO is also highly representative and accountable, following a one country, one vote policy and a consensus-based decision making process; however, this process is also cumbersome. Furthermore, the WTO’s relations with civil society are quite opaque and its negotiating mechanism is not very effective. Finally, the WTO has institutional issues that are overlooked; for instance, the 2004 Sutherland report and the 2007 Warwick Commission report outlined possible reforms for the WTO, but were not implemented. Professor Steger noted two areas of concern: the imbalance between the legislative and judicial sides of the WTO, and the explosion of regional trade agreements (RTAs). This imbalance could lead to the WTO appellate court seeing cases which are too big for its original purpose. Professor Ewing-Chow agreed, adding that disputes will be difficult to resolve if the details are not resolved in the rules. Regarding RTAs, Steger believes the key question is, “What should the relationship be between the WTO and RTAs?” The WTO currently has some surveillance capacity, but more may be necessary. Professor Ewing-Chow delved further into the issue of RTAs in the framework of three conditions for legitimacy: moral acceptability, comparative benefit and institutional integrity. The WTO has moral acceptability. Since 2001 there has been a 50-60% increase in the number of RTAs. Many nations are now diverting their trade resources to RTAs because they see little progress on the WTO front, demonstrating that they do not believe the WTO provides a comparable benefit. The WTO is also weak on institutional integrity because of difficulty making rules as well as the impasse between developed and newly developing countries. Professor Janow concluded by acknowledging that, while the WTO’s areas of coverage have expanded, it is still the GATT. GATT recognized that you could come to an agreement on international trade without the harmonization of national economies. Regarding the imbalance of the judicial and legislative branches, the rule-making body should be strengthened rather than weakening the dispute settlement mechanism. When faced with big, political cases, the appellate body shouldn’t try too hard to stitch together a framework because it would overreach. Janow agreed that the WTO needs to strengthen oversight of RTAs and needs to rethink, more creatively, how to address RTAs.
The Great Crash of 2008 and China
Monday, 26 October 2009
This event was co-sponsored with the Center on Japanese Economy and Business (CJEB).
Ross Garnaut, Professorial Fellow at the University of Melbourne and former Australian Ambassador to China, spoke about the effect of the 2008 economic crisis on China and its response to it. He addressed China’s economic position leading up to the crisis, the country’s subsequent response to the crisis, and its long-term implications for China and the global political economy.
Addressing China’s economic situation, Professor Garnaut argued that China’s role in global imbalances fostered the boom of recent years in the “Anglosphere,” a term he uses which roughly encompasses the major English-speaking industrial powers of the world. Garnaut believes that the most recent economic downturn took China by surprise; as late as August 2008, the People’s Bank was still contracting the money supply in reaction to inflation. However, between late September and early October, the manufacturing export business came to a standstill as factories laid off thousands of workers due to a near-total dropoff in international orders. Although China’s banks were spared much of the devastation that Wall Street and London experienced, the government quickly implemented a massive fiscal stimulus, including a huge monetary expansion. Professor Garnaut believes that in the future the world will no longer have the same mechanisms of transferring wealth from East Asia to the Anglosphere. Instead, within the next 10-30 years, he envisions the development of a quadri-polar world between China, India, the EU, and the U.S.
Oscar Lee Symposium of Undergraduate East Asian Studies
Friday, 24 April 2009 This event and the resulting publication were co-sponsored with the WEAI, the Department of East Asian Languages and Cultures, and the Columbia College Student Council.
This half-day conference, organized at SIPA by the Columbia Undergraduate East Asian Studies Initiative (EASI), gathered diverse Columbia student groups, academic departments, and institutes into a collaborative and multi-disciplinary effort toward furthering the undergraduate interdisciplinary study of East Asia. Three panels and eight presenters presented their research findings and received constructive criticism. Relevant panels included “Buying Bali Hai: Evolving Taiwanese Foreign Policy in the Pacific Islands, 1988-2008”; “Using Popular Culture to Explain Sino-Korean Bilateral Ties and Prospects for Future Reorganization”; and “The Political Economy of South Korean Rice Subsidies.” Support for the EASI also contributed to publication of the Columbia East Asian Review, an annual, online, peer-review academic journal dedicated to furthering knowledge of East Asia through the promotion of research and interdisciplinary dialogue.
Korean Soft Power in International Relations
Tuesday, 14 April 2009
This event was co-sponsored with the Center for Korean Research.
Shin-wha Lee, Visiting Professor at Columbia University and Professor of Political Science at Korea University, presented her views on Korean soft power and the current challenges facing it at SIPA. Professor Lee began by defining power and comparing hard and soft power. She identified hard power as military, economic and political power, and associated it with material incentives or threats. She contrasted this to exercising soft power by using diplomacy, culture and ideals. Soft power, she elaborated, is about gaining international legitimacy in the long-term through credibility, consensus and national appeal.
Professor Lee then assessed the soft power of the U.S., Europe, China, Japan and South Korea. She concluded that U.S. soft power is quite extensive, primarily through its cultural reach and historical advocacy of human rights, which reinforces its hard power. She contrasted this to the ‘Beijing Consensus’ and Japanese ‘cash diplomacy’, which are not as effective. Korean soft power primarily consists of diplomacy, the high tech sector, and Korean popular and traditional culture. The main constraint to Korean soft power comes from the North Korean desire to develop nuclear weapons and its heavy border military build-up aimed at Seoul. Korea aims to address this issue through its “Sunshine Policy” of downplaying hard power and embracing the North through soft power. She believes perception and policy gaps between the U.S. and Korea will be major challenges in executing this policy – and the soft power tactics it ends up using are important, because its hard power is weak.
Assessing the G-20 Results: Regional Perspectives
Tuesday, 7 April 2009
This event was co-sponsored with the Program in International Economic Policy of the School of International and Public Affairs (SIPA).
At SIPA, several Columbia faculty presented their views on the results of the 2009 G-20 summit in London: Richard Clarida, C. Lowell Harriss Professor of Economics and International Affairs; Sharyn O’Halloran, George Blumenthal Professor of Political Economy and Professor of International and Public Affairs; Guillermo Calvo, Professor of International and Public Affairs and Director of the Program in Economic Policy Management; Padma Desai, Harriman Professor of Comparative Economic Systems and Director of the Center for Transition Economies; and Arvind Panagariya, Professor of Economics and Jagdish Bhagwati Professor of Indian Political Economy. Richard Clarida spoke about the effect of the G-20’s coordinated stimulus agreement in the United States and was impressed by the results of the summit from the notoriously slow-moving body. Sharyn O’Halloran provided global economic statistics that underscored the urgency of the meetings. Guillermo Calvo was concerned about the lack of assistance for Latin America from the G-20 in the face of capital flow reversals in the region. Padma Desai saw a silver lining in the crisis for Russia – it might be the impetus for policy reform that the country needs. Arvind Panagariya said that India used the G-20 meeting to press for increased IMF voting rights for developing economies. He doesn’t believe that the additional stimulus packages agreed to at the summit will affect India very much due to its strong fiscal position and policy response. The event was moderated by Merit E. Janow, Professor in the Practice of International Economic Law and International Affairs. A report is available.
The Financial Crisis: The Government’s Response and Next Steps
Wednesday, 4 March 2009
This event, featuring the spring 2009 Distinguished Speakers in International Economic Policy, was co-sponsored with The Program in International Economic Policy of The School of International and Public Affairs.
On March 4th, several renowned financial industry experts gave a presentation at SIPA critiquing the U.S. government’s handling of the current economic crisis. These included Dr. Henry Kaufman, President, Henry Kaufman & Company, Inc; Mr. Peter R. Fisher, Managing Director, Co-Head, Fixed Income Portfolio Management Group, BlackRock; Professor Harvey J. Goldschmid, Dwight Professor of Law, Columbia University and former Commissioner, U.S. Securities and Exchange Commission; and Professor Charles Calomiris, Henry Kaufman Professor of Financial Institutions, Columbia Business School. Dr. Kaufman opened by unfavorably comparing the current crisis to the fifteen previous post-war downturns that have afflicted the US economy. He believes that the Federal Reserve failed to do its job due to its overarching belief in the clearing power of markets. Mr. Fisher then delineated the crisis in three steps. It began when many institutions could not de-lever through borrowing even with low interest rates. They were then unable to raise additional equity. Finally, contagion took hold as the Fed’s capitalization program came too late as Lehman, Fannie Mae and Freddie Mac failed. Professor Goldschmid contrasted the difference in regulation between the equity and mortgage industries and how the lack of safeguards in the mortgage industry led to systemic failure. As a result, unregulated credit default swaps encouraged more risky lending while banks made the false assumption that housing values would continue to increase. Professor Calomiris closed by focusing on government policy errors as the cause for the crisis. He was especially critical of the US government’s overactive enthusiasm for pushing home ownership as well as weak corporate governance that allowed CEOs to ignore shareholder concerns. The panel was moderated by Merit E. Janow, Professor in the Practice of International Economic Law and International Affairs, SIPA.
Food and Water Security Issues
Wednesday, 25 February 2009
This event was co-sponsored with WEAI.
This seminar, held at SIPA, featured Regina Birner, Senior Research Fellow at the International Food Policy Research Institute, and Alan Nicol, Research Fellow and Program Director at the Overseas Development Institute (UK), who examined the dire environmental challenges in Asia and Africa. Dr. Nicol discussed the critical water problems in Ethiopia. He framed the problem as one that is primarily political rather than "natural". Better use of land and water are deeply connected to corruption, waste and decades of poor policy making. He also pointed out that international issues impact Ethiopia's water situation/access. The country suffers from a lack of regional coordination and lack of power (regionally) over usage questions regarding the Nile. Dr. Birner discussed food and water security in India. She described the impact of decentralization on the work of NGOs, and addressed malnutrition and poor water supplies. She gave examples of how local leaders and their family/friends used programs from aid agencies to enrich themselves so that even the best designed programs could be thwarted. She also gave examples of feeding programs that were only open sporadically and the challenges faced by agencies trying to do development work in India.