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662. In Malawi, the battle to save mangoes
- Author:
- Charles Mkoka
- Publication Date:
- 08-2021
- Content Type:
- Journal Article
- Journal:
- Cairo Review of Global Affairs
- Institution:
- School of Global Affairs and Public Policy, American University in Cairo
- Abstract:
- Malawi, like other African fruit producers, is drawing on local and global resources to combat a pest which threatens vital fruit exports.
- Topic:
- Agriculture, Economics, Exports, Farming, and Crops
- Political Geography:
- Africa and Malawi
663. The Automotive Industry: The Achilles’ Heel of German Economy?
- Author:
- Marie Krpata
- Publication Date:
- 03-2021
- Content Type:
- Special Report
- Institution:
- Institut français des relations internationales (IFRI)
- Abstract:
- The global car market has been shrinking since 2018. This is a key economic sector for Germany whose producers belong to the Top 15 carmakers worldwide. Yet they are running the risk of being outclassed and eventually replaced, given emerging actors in the USA and China. These new competitors benefit from the growing digitization of the mobility sector, disruptive economic models and the obsolescence of vehicles with an internal combustion engine. This form of propulsion is progressively being replaced by less-polluting alternatives, which are being endorsed by public authorities. The Chinese-American rivalry is also impacting German carmakers, whose strategy greatly relies on the globalization of production chains. This has led to major successes in the past, but the threat of a technological decoupling between the USA and China limits German carmakers’ activities in terms of production and exports. Access to the Chinese market, which accounts for nearly 20% of the global population, is indispensable for the German brands that intend to benefit from China’s catch-up effects. European industrial and political actors plan to invest in promising sectors whilst seeking to respect environmental and social objectives. Also, the European Union (EU), led by a German powerhouse, intends to prevent market distortions such as hurdles to market access, while supporting the emergence of technologies and the compliance with production standards. However, developments in the automotive sector are challenging the EU’s capacity to act in a unified fashion, even if the EU is not seeking to impose its vision on the industry’s private sector, in a top-down manner.
- Topic:
- Climate Change, Economics, Energy Policy, Industrial Policy, European Union, Social Policy, Mobility, Industrialization, Green Deal, and Automotive Industry
- Political Geography:
- Europe and Germany
664. How economic ideas led to Taiwan’s shift to export promotion in the 1950s
- Author:
- Douglas A. Irwin
- Publication Date:
- 08-2021
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics (PIIE)
- Abstract:
- Taiwan was the first developing country to adopt an export-oriented trade strategy after World War II. The factors usually associated with big shifts in policy—a macroeconomic crisis, a change in political power or institutions, lobbying by export interests, pressure from international financial institutions—were not present; it was ideas that were key. In 1954, economist S. C. Tsiang proposed that Taiwan boost export earnings rather than squeeze import spending to deal with its chronic shortage of foreign exchange. He recommended a currency devaluation to establish a realistic exchange rate and a market-based system of foreign exchange allocation to end the inefficient rationing by the government. Four years later, a policymaker, K. Y. Yin, fought for the adoption of Tsiang’s proposal, helping clear the way for Taiwan’s phenomenal growth in trade.
- Topic:
- Economics, History, Exports, and Trade
- Political Geography:
- Taiwan and Asia
665. From hermit kingdom to miracle on the Han
- Author:
- Douglas A. Irwin
- Publication Date:
- 09-2021
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics (PIIE)
- Abstract:
- In 1960, South Korea’s exports were about 1 percent of GDP, and the country’s ability to import depended almost entirely on US aid. After changing its foreign exchange and trade policies in the mid-1960s, Korea saw a surge in exports to more than 10 percent of GDP by the end of the decade. What factors account for the shift in policy that enabled this dramatic export growth to occur? The United States helped initiate the process by withholding financial assistance, pressuring Korea to devalue its currency and reform its foreign exchange regime. Initially, the Korean government resisted taking these steps, but in 1964 it became firmly committed to an export promotion strategy to boost foreign exchange earnings and end its dependence on American aid.
- Topic:
- Economics, Foreign Exchange, Reform, Exports, and Trade
- Political Geography:
- Asia and South Korea
666. Low inflation bends the Phillips curve around the world: Extended results
- Author:
- Jami Forbes, Joseph E. Gagnon, and Christopher G. Collins
- Publication Date:
- 09-2021
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics (PIIE)
- Abstract:
- This paper revises and extends PIIE Working Paper 20-6. It continues to find strong support for a Phillips curve that becomes nonlinear when inflation is "low"—which our baseline model defines as less than 3 percent. The nonlinear curve is steep when output is above potential (slack is negative) but flat when output is below potential (slack is positive) so that further increases in economic slack have little effect on inflation. This finding is consistent with evidence of downward nominal wage and price rigidity. When inflation is high, the Phillips curve is linear and relatively steep. These results are robust to placing the threshold between the high and low inflation regimes at 2, 3, or 4 percent inflation or for a threshold based on country-specific medians of inflation. In this nonlinear model, international factors play a large role in explaining headline inflation (albeit less so for core inflation), a role that has been increasing since the global financial crisis.
- Topic:
- Economics, Financial Crisis, Inflation, and Philips Curve
- Political Geography:
- Global Focus
667. South Korea as a Fourth Industrial Revolution Middle Power?
- Author:
- Dongwoo Kim
- Publication Date:
- 10-2021
- Content Type:
- Special Report
- Institution:
- Korea Economic Institute of America (KEI)
- Abstract:
- This paper proposes a framework for conceptualizing middle powerism in the context of the Fourth Industrial Revolution, using South Korea as an example. The paper argues that the systemic transformation of the Fourth Industrial Revolution has created new openings for middle powerism, and proposes 1) technology, 2) networks, and 3) governance as factors that could enable it. Then, South Korea’s capacities in each of these three areas, potential barriers, and ultimately Seoul’s capacity to act as a “Fourth Industrial Revolution” middle power are evaluated.
- Topic:
- International Relations, Economics, Science and Technology, Governance, Industrialization, and Middle Power
- Political Geography:
- Asia and South Korea
668. Building on the Middle: Diversifying South Korea’s Foreign Policy Narrative and Economic Ties
- Author:
- Carolin Wefer
- Publication Date:
- 11-2021
- Content Type:
- Special Report
- Institution:
- Korea Economic Institute of America (KEI)
- Abstract:
- The rivalry between the United States and China is affecting countries in its midst. This particularly applies to South Korea. The country is a strong economic player with a successful net of free trade agreements. Additionally, it has branded itself as a middle power, a multilateralist, and good international citizen. However, South Korea’s middle power perspective has recently assumed a literal definition of being situated in the middle of two great powers. Seoul’s dependencies on both the U.S. and China are undeniable. As the conflict intensifies, it is thus essential for South Korea to diversify its ties through trade policy and multilateral fora. This requires leaving the literal middle power definition behind and leveraging its economic standing towards an increase in international status, as well as refocusing on the figurative middle power narrative that brought the country to its initial global esteem. Through diversification and the build-up of its economic and multilateral prowess, South Korea stands to lessen the shocks of the U.S.-China rivalry. Joining RCEP and obtaining a guest role at the G7 were important steps in that direction. They offer an expansion of both regional and global ties and an involvement in discussions on the redefinition of international fora, but more can be done.
- Topic:
- Foreign Policy, Economics, Multilateralism, Rivalry, and Middle Power
- Political Geography:
- China, Asia, South Korea, and United States of America
669. Assessing South Korea's Role in Promoting ESG Investing in the Asia-Pacific
- Author:
- William Grimes and Yaechan Lee
- Publication Date:
- 06-2021
- Content Type:
- Working Paper
- Institution:
- Korea Economic Institute of America (KEI)
- Abstract:
- This paper assesses the potential for South Korea to be a regional leader in advancing environmental, social, and governance (ESG) investing, and supporting sustainable development in the Asia-Pacific region. Many economies in the Asia-Pacific region are facing threats from climate change or other environmental limits to growth. Thus, the expansion of ESG investment and green infrastructure is a major regional challenge that must be addressed for sustainable growth. We argue that Korea can play a central role in overcoming this challenge based on the following conjectures. First, Korea’s developmental legacy has allowed it to reshape its financial market and investment habits to quickly expand its ESG market. This model is more relatable to developing economy governments than those offered by Western economies. Sharing Korea’s experience and know-how with the region’s developing economies can augment their ESG compliance capacities and make them a more attractive destination for sustainable infrastructure investments. Second, Korea’s significant presence in the region as a major creditor and exporter can induce ESG adherence from the private sector as Korean investors enhance their commitment to ESG principles. While questions remain about the sustainability of Korea’s ESG adherence due to the market’s heavy reliance on government agency finance and ad hoc pandemic response investments, the increasing global interest in the ESG market makes it likely that the Korean government will continue to incentivize adherence to ESG principles.
- Topic:
- Economics, Markets, Investment, and Regional Economy
- Political Geography:
- Asia and South Korea
670. COVID-19, Supply Chains, and Dependence on China: The Indian Perspective
- Author:
- Amitendu Palit
- Publication Date:
- 07-2021
- Content Type:
- Journal Article
- Journal:
- Joint U.S.-Korea Academic Studies
- Institution:
- Korea Economic Institute of America (KEI)
- Abstract:
- China is India’s largest source of imports, nearly 15 percent of which are sourced from China. Many of India’s major imports—electrical machinery, electronic and semiconductor devices, fertilizers, antibiotics, iron and steel products, and vehicular parts—are extensively sourced from China. The outbreak of the COVID-19 pandemic highlighted the critical dependence of India’s pharmaceutical industry on China for active pharmaceutical ingredients (APIs). The dependence on China for both intermediate and finished products, has encouraged India to incentivize greater production at home through production-linked-incentives (PLIs) and to work with Japan and Australia on reorganizing regional supply chains. The paper examines the repositioning of supply chains in the strategic industry of pharmaceuticals. Efforts to reduce dependence on China assume great importance in this regard as India strives to become the leading supplier of affordable vaccines for tackling COVID-19.) The decade of the 2020’s has begun with India embarking on the dedicated mission of reducing import dependence and increasing self-reliance. The COVID-19 pandemic has starkly exposed the frailties of supply chains relying heavily on China. For India, which relies extensively on China for several critical imports, no sector is more vulnerable to disruptions from over-dependence than its pharmaceuticals. India’s reputation as the “pharmacy of the world” drawn from its great proficiency in making affordable pharmaceutical formulations and vaccines, relies fundamentally on sourcing essential drug intermediates from China. As one of the leading actors in the world’s fight against COVID-19, India is wary of sourcing disruptions from China affecting its ability to contribute to expanding global health security. After focusing on the import dependence of India’s pharmaceutical industry on China, this paper analyzes the recent initiatives announced by India for increasing economic self-reliance and reducing such dependence. It concludes by reflecting on the prospects of India decoupling from China in sourcing pharmaceutical ingredients.
- Topic:
- Economics, COVID-19, Imports, and Supply Chains
- Political Geography:
- China, South Asia, India, and Asia