Japan and the Middle East after the Arab Spring

本稿は、中東における問題や紛争に対する日本の政策を考察し、中長期的な視野に立った日本の国益追求のためにはどのような選択肢が考えられるかを論じる。そのために、イランの核開発問題とシリアの市民戦争をケースとしてとりあげる。戦後の日本は中東での問題や紛争に対して、地域内諸国およびアメリカとの関係を同時に維持するために、双方の均衡を図る政策を打ち出してきたが、冷戦後には米国寄りの傾向が多く見られた。現在中東では、アラブの春の展望は不透明な部分が多い。日本は中東との関係において、問題や紛争の性質によっては負の遺産を抱える欧米とは一線を画した独自の政策とアプローチを打ち出すことが、中東資源国との関係の強化と拡大や中東市場の発展と安定には望ましいと考える。また同時に、今後の米国の中東における国益の変化が考えられることも要因ととらえ、本稿は冷戦期にみられたような、より均衡のとれた立場を打ち出し、より広い概念をもとに基づいた効果的なソフトパワーの行使を提唱する。

Transformation of the Financial Sector in Indonesia

Introduction : The source and deployment of finance are central issues in economic development. Since 1966, when the Soeharto Administration was inaugurated, Indonesian economic development has relied on funds in the form of aid from international organizations and foreign countries. After the 1990s, a further abundant inflow of capital sustained a rapid economic development. Foreign funding was the basis of Indonesian economic growth. This paper will describe the mechanism for allocating funds in the Indonesian economy. It will identify the problems this mechanism generated in the Indonesian experience, and it will attempt to explain why there was a collapse of the financial system in the wake of the Asian Currency Crisis of 1997. History of the Indonesian Financial system The year 1966 saw the emergence of commercial banks in Indonesia. It can be said that before 1966 a financial system hardly existed, a fact commonly attributed to economic disruptions like the consecutive runs of fiscal deficit and hyperinflation under the Soekarno Administration. After 1996, with the inauguration of Soeharto, a regulatory system of financial legislation, e.g. central banking law and banking regulation, was introduced and implemented, and the banking sector that is the basis of the current financial system in Indonesia was built up. 　　　The Indonesian financial structure was significantly altered at the first financial reform of 1983. Between 1966 and 1982, the banking sector consisted of Bank Indonesia (the Central Bank) and the state-owned banks. There was also a system for distributing the abundant public revenue derived from the soaring oil price of the 1970s. The public finance distribution function, incorporated in Indonesian financial system, changed after the successive financial reforms of 1983 and 1988, when there was a move away from the monopoly-market style dominated by state-owned banks (which was a system of public finance distribution that operated at the discretion of the government) towards a modern market mechanism. The five phases of development The Indonesian financial system developed in five phases between 1966 and the present time. The first period (1966-72) was its formative period, the second (1973-82) its policy based finance period under soaring oil prices, the third (1983-91) its financial-reform period, the fourth (1992-97) its period of expansion, and the fifth (1998-) its period of financial restructuring. The first section of this paper summarizes the financial policies operative during each of the periods identified above. In the second section changes to the financial sector in response to policies are examined, and an analysis of these changes shows that an important development of the financial sector occurred during the financial reform period. In the third section the focus of analysis shifts from the general financial sector to particular commercial banks’ performances. In the third section changes in commercial banks’ lending and fund-raising behaviour after the 1990s are analysed by comparing several banking groups in terms of their ownership and foundation time. The last section summarizes the foregoing analyses and examines the problems that remain in the Indonesian financial sector, which is still undergoing restructuring.

Integration under 'One Country, Two Systems' - The Case of Mainland China and Hong Kong-

Ever since the handover of the territory in 1997, Hong Kong has had its own unique law and its own economic system and international legal personality, and has not been integrated with Mainland China. The Basic Law guarantees the uniqueness of the Hong Kong SAR until 2047. But close economic ties between Hong Kong and the Mainland will promote closer economic integration. The Basic Law limits only a customs union and the introduction of a single currency, but not the formation of a Free Trade Agreement (hereafter FTA) and monetary union. FTA has already been realized in the form of the Closer Economic Partnership Arrangement (hereafter CEPA). The Hong Kong SAR government, including the bureaucrat as well as the Chief Executive Tung Chee Hwa, was opposed to, and hesitant towards, the formation of a regional trade agreement with the Mainland, but the business community made them to adopt a positive attitude towards the CEPA. It is unclear how much integration can been deepened, but it can be argued that the current policy of the Hong Kong SAR is too supportive of business, and an excessive degree of economic integration may threaten the uniqueness of Hong Kong. But if Hong Kong achieves democracy and enjoys complete autonomy, it will be easy for economic integration to co-exist with the 'One Country, Two Systems' approach, in the interests of the business community and of the citizens of the SAR.

Financial Cooperation in East Asia

This paper addresses the rationale for financial cooperation in East Asia. It begins by giving a brief review of developments after the Asian currency crisis, and argues that enhancing regional financial cooperation both quantitatively and qualitatively will require: (1) upgrading surveillance capabilities in the region, and (2) creating a clear division of labor between regional institutions and the IMF. It also mentions the issue of membership and the background forces that have led to the duplication of similar forums in East Asia. Although the concern over crisis management is the central issue in East Asian financial cooperation, other issues such as exchange rate policy coordination and fostering regional capital markets are discussed as well.

Distribution System of China's Industrial Clusters: Case Study of Yiwu China Commodity City

This paper discusses the issue of upgrading industrial clusters from the perspective of external linkages. It is taken for granted that in most developing countries, due to the limited domestic market and poor traditional commercial networks, industrial clusters are able to upgrade only when they are involved in global value chains. However, the rise of China’s industrial clusters challenges this view. Historically, China has had a lot of industrial clusters with their own traditional commercial networks. This fact combined with its huge population resulted in the formation of a unique external linage to China’s industrial clusters after the socialist planning period ended. In concrete terms, since the 1980s, a traditional commercial institution . the transaction market . began to appear in most clusters. These markets within the clusters get connected to those in the cities due to interaction between traditional merchants and local governments. This has resulted in the formation of a powerful market network-based distribution system which has played a crucial role for China’s industrial clusters in responding to exploding domestic demand. This paper explains these features in detail, using Yiwu China Commodity City as a case study.

The Choice of Transport Mode: Evidence from Japanese Exports to East Asia

This paper investigates Japanese trade by mode of transport, i.e., air transport versus maritime shipping. Some facts about Japanese machinery exports by mode of transport in the 1990s are examined first. Then it will be shown that products of the machinery sector where international fragmentation prevails are more likely to be exported by air.

The Effect of Exchange Rate Volatility on International Trade: The Implication for Production Networks in East Asia

This paper is an empirical investigation of the relationship between exchange rate volatility and international trade, focusing on East Asia. It finds that intra-East Asian trade is discouraged by exchange rate volatility more seriously than trade in other regions because intermediate goods trade in production networks, which is quite sensitive to exchange rate volatility compared with other types of trade, occupies a significant fraction of trade. In addition, this negative effect of volatility is mainly induced by the unanticipated volatility and has an even greater impact than that of tariffs.

Constitutions around the world : A View from Latin America

This paper gives a global summary of the number of constitutions and the number of　articles in each constitution for many representative countries around the world. Several　works have already been written comparing different legal systems and different　constitutional traditions around the world; the purpose of this paper is just to compare the　numbers of constitutions and articles in the diverse regions of the world, namely: North　America, Latin America, Europe, Oceania, Middle East, Asia and Africa. Around the world, on average, Latin America has had the most convoluted constitutional history. The Dominican Republic has had a total of 32 constitutions, the largest number of constitutions of any country, since its independence in 1844. Three other countries have also had 20 or more constitutions throughout their history, all of them in Latin America: Venezuela (26), Haiti (24) and Ecuador (20). On the other hand, there are economies and societies that do not even have codified constitutions, like the United Kingdom in Europe, Hong Kong in Asia and New Zealand in Oceania. The United States has had only one constitution, even if it has been amended several times. There are also the special cases of Israel and Saudi Arabia, both in the Middle East, that do not have official written constitutions for historical and religious reasons. Comparative constitutional numbers and history help explain several things about the stability of political systems, but not necessarily about their quality.

Agglomeration versus Fragmentation:A Comparison of East Asia and Europe

Inspired by the observed contrasting patterns of industrial distribution in East Asia and Europe, this paper conducts an empirical clarification of the difference in spatial relationships among countries within a region for the electric machinery industry by use of spatial econometric analysis. The results indicate that, while production in the electric machinery industry in a country is positively correlated with that of neighboring countries in East Asia, there is no significant spatial correlation in Europe. Such a difference in spatial interdependence has important implications for economic development in those regions.

The size distribution of all Cambodian establishments

This paper presents empirical evidence on the size distribution of all Cambodian establishments in the nonfarm sector for 2009. Small- and large-scale establishments account for the largest share of employment, pointing to a “missing middle” that is commonly observed in developing countries. The analysis provides little evidence for Zipf’s law because Cambodian industry is characterized by a more dense mass of small establishments than the Zipf distribution would predict.

Chapter 4 The Challenges in Developing Realistic NEG Simulation Models for East Asia

This chapter attempts to identify some important issues in developing realistic simulation models based on new economic geography, and it suggests a direction for solving the difficulties. Specifically, adopting the IDE Geographical Simulation Model (IDE-GSM) as an example, we discuss some problems in developing a realistic simulation model for East Asia. The first and largest problem in this region is the lack of reliable economic datasets at the sub-national level, and this issue needs to be resolved in the long term. However, to deal with the existing situation in the short term, we utilize some techniques to produce more realistic and reliable simulation models. One key compromise is to use a 'topology' representation of geography, rather than a 'mesh' or 'grid' representation or simple 'straight lines' connecting each city which are used in many other models. In addition to this, a modal choice model that takes into consideration both money and time costs seems to work well.

Impact of foreign capital entry in the Indonesian banking sector

After the Asian financial crisis of 1997/98, the Indonesian banking sector experienced significant changes. Ownership structure of banking sector is substantially-changed. Currently, ownership of major commercial banks is dominated by foreign capital through acquisition. This paper examines whether foreign ownership changes a bank’s lending behavior and performance. Foreign banks tend to lend mainly to large firms; this paper examines whether the credit to small and medium-sized enterprises (SMEs) is affected by foreign capital entry into the Indonesian banking sector. Empirical results show that banks owned by foreign capital tend to decrease SME credit.

The middle-income trap from the viewpoint of trade structures

In this study, we try to elucidate the middle-income trap from the viewpoint of international trade. We conduct regression analyses on the relationship between income level and net export ratios for different types of goods for trapped and non-trapped samples separately. Our findings indicate that industrial upgrading appears to occur exactly as depicted by the flying-geese model for non-trapped countries while trapped countries tend to depend on the export of primary commodities, and industrialization appears to be driven by forward linkages to processed goods and a narrow base. The results of our analyses suggest that the middle-income trap is a form of Dutch disease or a 'resource curse' in the middle-income stage.

Better than nothing? : dowry in the absence of the legal protection of women's inheritance rights

The practice of dowry is often thought to be the root cause of the unequal treatment of women in India. For women without inheritance rights, however, dowry may function as their only source of protection. Using a nationwide dataset and exploiting a natural experimental situation, this study explores the effects of dowry on women's empowerment in India, a society where women do not have inheritance rights. In such a society, dowry seems to enhance women's status in the marital household. The effects reverse when women have equal inheritance rights as their brothers. Empirical analysis suggests that the outright ban on dowry that ignores the context may not necessarily benefit women.