Trade, Exchange Rates, and Macroeconomic Dynamics in East Asia: Why the Electronics Cycle Matters

Against the background of increasing regional trade and investment, there is growing interest in monetary and macroeconomic policy coordination in East Asia. Although there is a sizable literature on macroeconomic linkages among East Asian countries and the potential merit of policy coordination in the region, the existing studies tend to examine these issues exclusively in terms of macroeconomic variables and do not consider how these aggregate variables are influenced by one prominent feature of a number of East Asian economies: their heavy dependence on the electronics industry. Although active engagement in the global electronics industry has been a powerful growth engine for the Asian countries, it has also left their economies vulnerable to cyclical fluctuations in the world electronics market. As the cycle of the global electronics industry exerts profound impacts on the medium-term dynamics of the Asian economies, it is imperative to take an explicit account of its influence when studying the way in which the regional economies are linked to one another and how this relationship can be altered by a specific policy initiative. We illustrate the importance of this point by examining recent studies on: (1) trade competition between China andother Asian countries and the role of the Chinese renminbi therein; and (2) the effect offluctuations in the yen/dollar exchange rate on the regional economies.

International Competitiveness of Manufacturing Firms in sub-Saharan Africa

As the success of East Asian countries has shown, labor-intensive industry is recognized to lead economic growth in the early stages of development, utilizing relatively low labor costs. This same growth process has already started in South and South East Asian LDCs since the mid-1990s. However, the manufacturing sector in sub-Saharan Africa has been underdeveloped and manufacturing exports, in particular labour-intensive goods, have stagnated. This paper investigates the international competitiveness of the African manufacturing sector and its determinants through an analytical survey of empirical studies and a comparison with Asian low income countries. Empirical evidences indicate that primary factors of competitiveness, namely productivity, labour cost and exchange rate are unfavorable in sub-Saharan Africa. Representative arguments attribute the weak competitiveness to problems in the business environment, factor endowment, and the exchange rate. However, careful review shows that labour cost is beyond the range explained by endowment and misalignment of exchange rates have been reduced in Africa. Moreover, comparison with Asian low income countries which have competitiveness in labour-intensive goods shows no difference in the quality of business environment, while the labour cost is significantly lower than sub-Saharan African countries. Although results should be considered tentative, high labour cost beyond endowment and conservative investment behavior emerge as important factors for the weak competitiveness in sub-Saharan Africa when controlling income level.

Border Barriers in Agricultural Trade and the Impact of their Elimination: Evidence from East Asia

Abstract: By means of a GTAP based-CGE model, we investigate the impact of the elimination of import tariffs and non-tariff policy barriers (NTPBs) on agricultural trade towards East Asian FTAs. To do that, we first measure the NTPBs by employing a widely-used method derived from the literature on border effects. Next, by adding into the GTAP database our estimates on the NTPBs, which the original GTAP database by its nature does not succeed in incorporating, we compute the impact of the entire elimination of policy barriers (the complete reduction of import tariffs and of NTPBs) on GDP.

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。