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1. Asia Beyond China: Developing a European Indo-Pacific Strategy for a Changing Global Order

Author:
Luke Patey
Publication Date:
03-2020
Content Type:
Policy Brief
Institution:
Danish Institute for International Studies
Abstract:
Much of Europe’s attention to Asia is currently being captured by China. However, if the European Union and its member states are serious about maintaining a rules-based global order and advancing multilateralism and connectivity, it should increase its work in building partnerships across Asia, particularly in the Indo-Pacific super-region. To save multilateralism, go to the Indo-Pacific. RECOMMENDATIONS: ■ Multilateralism first. Unpack and differentiate where the United States and China support the rules-based order and where not, but also look to new trade deals and security pacts with India and Southeast Asia partners. ■ Targeted connectivity. The EU should continue to offer support to existing regional infrastructure and connectivity initiatives. ■ Work in small groups. EU unanimity on China and Indo-Pacific policy is ideal, but not always necessary to get things done. ■ Asia specialists wanted. Invest in and develop career paths for Asia specialists in foreign and defence ministries and intelligence services.
Topic:
Security, Foreign Policy, Defense Policy, Emerging Markets, International Organization, Science and Technology, Power Politics, and European Union
Political Geography:
China, Europe, and Asia

2. How ETFs Amplify the Global Financial Cycle in Emerging Markets

Author:
Nathan Converse, Eduardo Levy Yeyati, and Tomas Williams
Publication Date:
05-2019
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
Since the early 2000s exchange-traded funds (ETFs) have grown to become an important in- vestment vehicle worldwide. In this paper, we study how their growth affects the sensitivity of international capital flows to the global financial cycle. We combine comprehensive fund- level data on investor flows with a novel identification strategy that controls for unobservable time-varying economic conditions at the investment destination. For dedicated emerging mar- ket funds, we find that the sensitivity of investor flows to global financial conditions for equity (bond) ETFs is 2.5 (2.25) times higher than for equity (bond) mutual funds. In turn, we show that in countries where ETFs hold a larger share of financial assets, total cross-border equity flows and prices are significantly more sensitive to global financial conditions. We conclude that the growing role of ETFs as a channel for international capital flows amplifies the global financial cycle in emerging markets.
Topic:
Emerging Markets, International Trade and Finance, Global Political Economy, Capital Flows, and Mutual Funds
Political Geography:
Global Focus and Global Markets

3. Making Basel III Work for Emerging Markets and Developing Economies

Author:
Thorsten Beck and Liliana Rojas-Suarez
Publication Date:
04-2019
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
A sound financial regulatory framework is critical for minimizing the risk imposed by financial system fra­gility. In the world’s emerging markets and developing economies (EMDEs), such regulation is also essential to support economic development and poverty reduc­tion. Meanwhile, it is increasingly recognized that global financial stability is a global public good: recent decades have seen the development of new inter­national financial regulatory standards, to serve as benchmarks for gauging regulation across countries, facilitate cooperation among financial supervisors from different countries, and create a level playing field for financial institutions wherever they operate. For the worldwide banking industry, the international regulatory standards promulgated by the Basel Com­mittee on Banking Supervision (BCBS) stand out for their wide-ranging scope and detail. Even though the latest Basel recommendations, adopted in late 2017 and known as Basel III, are, like their predecessors, calibrated primarily for advanced countries, many EMDEs are in the process of adopting and adapting them, and many others are considering it. They do so because they see it as in their long-term interest, but at the same time the new standards pose for them new risks and challenges. This report assesses the implica­tions of Basel III for EMDEs and provides recommen­dations for both international and local policymakers to make Basel III work for these economies.
Topic:
Development, Economics, Emerging Markets, and Markets
Political Geography:
Global Focus

4. China's Engagement in Pakistan, Afghanistan and Xinjiang: Will China's Root Cause Model provide regional stability and security?

Author:
Lars Erslev Andersen and Yang Jiang
Publication Date:
11-2018
Content Type:
Special Report
Institution:
Danish Institute for International Studies
Abstract:
In the latest policy report in DIIS’s Defence and Security Studies series, Lars Erslev Andersen and Yang Jiang discuss the potential of China’s approach to stabilising security conditions in Pakistan and Afghanistan through development. The report explores China’s westward policy by analysing the opportunities and obstacles related to its flagship Belt and Road Initiative (BRI) in South Asia, in particular the China–Pakistan Economic Corridor (CPEC). One aspect of the philosophy behind the CPEC is that lifting people out of poverty by providing them with better opportunities for jobs and incomes and hence improved living conditions will reduce the attractions of violent extremism and the inclination to indulge in it, thereby enhancing stability. This so-called Root Cause model draws on China’s experience of successfully lifting more than 600 million of its own citizens out of poverty due to the reform policy that has changed China rapidly over the past forty years, especially in the big cities in eastern China. However, the model has had mixed results in western China, especially in Xinjiang province. As this issue can shed light on the kinds of problems that China will face in Afghanistan and Pakistan, the report explores the situation in Xinjiang by investigating how it is conducting its policy there. The report outlines this development, which brings the Root Cause model into question to some extent, thus identifying some of the challenges that China will face in trying to stabilise conflict-torn parts of Pakistan and Afghanistan ‘the Chinese way’. Following these observations, the report takes a closer look at China’s economic diplomacy in Afghanistan. The last section discusses China’s increasing role in mediating between Afghanistan, Pakistan and the Taliban. Whether the Chinese approach to the situation in Pakistan and Afghanistan proves to be a sustainable way of providing stability and achieving results is the question addressed in the report’s conclusion.
Topic:
Security, Defense Policy, Democratization, Development, Emerging Markets, Migration, Oil, Power Politics, Non State Actors, Gas, Fragile States, Economy, Conflict, Investment, Peace, and Land Rights
Political Geography:
Pakistan, Afghanistan, China, South Asia, and Asia

5. India's Energy Needs And The Arab/Persian Gulf

Author:
Jean-Francois Seznec and Ramesh Pallakonda
Publication Date:
01-2017
Content Type:
Special Report
Institution:
Atlantic Council
Abstract:
India’s economy is increasing at the fastest rate in the world, now making it the globe’s third largest user of crude oil. While India is benefitting from the low oil prices seen since mid-2014, it has precious few oil and gas resources of its own and will remain highly dependent on imports. On the other hand India is now a large exporter of products like gasoline and diesel fuels because it has built a very large refining capacity, which ultimately renders India’s need for crude oil more pressing.
Topic:
Emerging Markets, International Political Economy, and Oil
Political Geography:
India

6. Jurisdiction on the Internet: From Legal Arms Race to Transnational Cooperation

Author:
Bertrand de la Chapelle and Paul Fehlinger
Publication Date:
04-2016
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The past 20 years have witnessed a profound change in the types of non-resident investors who provide funding to emerging market economies (EMEs) and the financial instruments through which emerging market (EM) corporations borrow from abroad. Until the beginning of the new millennium, private capital flows to EMEs were mainly intermediated by large global banks, and EMEs were subjected to massive volatility in their external payments balances, exchange rates and domestic financial systems. But since the early 2000s the role of bank-intermediated credit has declined, as the base of investors willing to take on exposure to EM corporate debt has become much larger and more diverse. These structural changes have encouraged a vast growth in flows of funds, not only from the mature economies to EMEs as a group, but also among EMEs themselves.
Topic:
Debt, Economics, Emerging Markets, International Trade and Finance, and Financial Crisis
Political Geography:
Global Focus

7. Is Indonesia the Next China?

Author:
Wendy Dobson
Publication Date:
02-2016
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
This paper reviews Indonesia’s economic prospects and what these imply for a closer relationship with Canada. By posing the question “Is Indonesia the next China?,” the author suggests that Indonesia has the considerable economic potential envisaged by foreign investors, but conveys uncertainty as to whether Southeast Asia’s most populous country can make the changes necessary to realize that potential. A review of the economic record and comparison of China’s and Indonesia’s economic structures, endowments and institutions show major differences between the two countries. The paper further questions what it will take to realize Indonesia’s potential, finding the answers to be: human capital development; increased participation in the region’s global value chains; meeting the growing middle-class demand for modern services; raising productivity in agriculture and fishing; and increasing use of the Internet. Failure to make these changes will increase the chances of Indonesia’s growth in per capita incomes slowing and falling into the middle-income trap. Canada’s role will be to monitor closely how Indonesia tackles its five priorities at the same time as it responds to the opportunities to exploit Indonesia’s abundant natural resources, urbanization and its expanding consumer demand for modern services and educational opportunities.
Topic:
Economics, Emerging Markets, Human Welfare, International Trade and Finance, Natural Resources, and Regulation
Political Geography:
China and Indonesia

8. TPP, IPR Protection, and Their Implications for Emerging Asian Economies

Author:
Fukunari Kimura, Lurong Chen, Maura Ada Iliuteanu, Shimpei Yamamoto, and Masahito Ambashi
Publication Date:
04-2016
Content Type:
Policy Brief
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Intellectual property rights (IPR) protection is essential for economic growth, innovation, and competitiveness. As the global economy is increasingly organised within global value chains, disciplining and enforcing IPR in a coherent manner internationally has become a critical issue in the 21st century trade system. The Trans-Pacific Partnership (TPP) agreement flags America's achievement in setting new standards on international IPR enforcement under a plurilateral framework that involves countries from Asia-Pacific. Yet such standards run the risk of becoming the new norm at the international level. Reaching agreement on the text of the TPP signals emerging Asian economies' heightened commitment to IPR enforcement. Some factors that policymakers may want to consider include the following: Efficient IPR protection at the domestic level is integral to efforts that facilitate technology adoption and stimulate incremental innovations. It is crucial to increase public awareness of intellectual property (IP) in general and its associated rights in particular. IP laws and regulations must at least meet the requirements of the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS) and always aim for higher-level standards. IPR disciplines must be binding and practically enforceable. Asian countries should actively participate in global IPR rule-making. The abundance and quality of human capital will affect not only the level of invention and other innovative activities but also the efficiency of IPR enforcemen
Topic:
Emerging Markets, International Trade and Finance, and Global Political Economy
Political Geography:
Southeast Asia and Global Focus

9. Growth in an uncertain global environment: The outlook for Latin America

Publication Date:
09-2015
Content Type:
Working Paper
Abstract:
The growth rates witnessed in markets across Latin America in the decade to 2010 pulled millions out of poverty, led to rapid growth of the middle class and helped to demonstrate the promise of emerging markets. Since then, however, growth has slowed dramatically across the region. 2015 will mark the fifth successive year of deceleration in Latin America, which has slowed more than any other emerging market region. With concerns over the ability of emerging markets to withstand a slowdown in China and monetary policy normalisation in the US growing, risks to the growth and financing outlook for Latin America persist. However, as economic recovery starts to gather pace in the region, opportunities for investment and growth will also re-emerge. This report provides a snapshot of the current political and economic landscape in the region, and in some of Latin America’s largest economies: Brazil, Mexico and Argentina. Each article analyses key concerns and presents our view of the outlook going forward, helping you to influence decision-making and economic outcomes for your business.
Topic:
Development, Economics, Emerging Markets, Globalization, and International Trade and Finance
Political Geography:
Latin America

10. After the freefall, what to expect from commodity prices

Publication Date:
10-2015
Content Type:
Working Paper
Abstract:
After the plunge in commodity prices in 2015, the outlook for raw materials remains highly uncertain amid slowing economic growth in China and looming interest rate rises in the US. In China—which gobbles up nearly one-half of the world’s consumption of aluminium, copper and coal—demand for base materials risks moderating further as the economy moves away from an investment-driven growth model. This will continue to have knock-on effects on the performance of commodity-exporting economies, weighing down on global consumption of raw materials. However, supply responses are beginning to emerge from commodity producers worldwide. Coupled with less favourable weather prospects, this will lead to some market tightening next year, allowing for some price stabilisation after four years of decline. This report provides a snapshot of The Economist Intelligence Unit’s current commodity price indexes, exploring the changing prices for industrial raw materials and food, feedstuffs & beverages. Each article provides analysis and forecasts across a number of key commodities, helping you to assess the fast-changing environment of commodity markets and influence key decision-making processes.
Topic:
Economics, Emerging Markets, Industrial Policy, International Trade and Finance, and Monetary Policy
Political Geography:
China