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1991. Deeper Regional Integration and Global Value Chains

Author:
Nakgyoon Choi
Publication Date:
07-2019
Content Type:
Working Paper
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Recently, international trade has become regional rather than global. This paper aims to test if deeper regional integration contributes to the organization of global value chains along the regional clusters including Asia, Europe, and America. We estimate the impacts of deep regional integrations on global value chains by region, investigating the implications of mega FTAs for global value chains by scenario. We use not only data on trade in value added but also global value chains participation indexes which reflect the global value chains better than domestic value added in goods and services exports. The estimation results reveal that a deep regional trade agreement has heterogeneous effects on global value chains depending on the regional clusters. In particular, Asia turns out to import more intermediate goods than Europe and America while RTA member countries tend to import more intermediate goods from Europe than Asia and America.
Topic:
International Trade and Finance, Regional Integration, Economic Policy, and Exports
Political Geography:
Europe, Asia, Global Focus, and North America

1992. New Delhi’s ‘Act East’ and the India-ASEAN Engagement: What They Mean for India-Korea Relations in the Indo-Pacific

Author:
Jagannath P. Panda
Publication Date:
05-2019
Content Type:
Working Paper
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
One of the principal objectives of New Delhi’s ‘Act East Policy’ (AEP) is to strengthen India’s contact with the ASEAN as well as with the countries in Southeast Asia. The pursuit is evolving and ever-growing, both institutionally and regionally. With a focus on ASEAN-centric cooperation, forging a closer multi-modal connectivity cooperation between India’s bordering states and the immediate Southeast Asian countries has been one of the guiding principles of this engagement. Also, this engagement is becoming deeper with India aiming to extend the connectivity cooperation to the interior parts of the ASEAN region from the immediate neighbouring region of India. A renewed focus on engagement through increased cooperation in areas such as economic, political and security realms offers a positive future graph to the India-ASEAN engagement at present which is becoming one of the defining features of Indo-Pacific. With the possible conclusion of the Regional Comprehensive Economic Partnership (RCEP) in 2019-20, the regional economic architecture will move to a new level of maturity in which India would like to factor in its engagement strongly with the other countries. More importantly, it is in India’s interests to further deeper cooperation with the ASEAN as an institution. The economic role of ASEAN’s dialogue partners, especially that of China, will test India’s relationship character with the ASEAN. How should India react to the evolving regional economic and security architecture around the ASEAN? Options for India are perhaps plenty. Yet, India needs to find strategic compatibility with most of the ASEAN dialogue partners – some of which are influential economic actors in the region – to position its strategic interests more coherently. South Korea (officially known as the Republic of Korea) is one of those prime actors with whom India must envision to have more policy convergence keeping the ASEAN framework in mind, and draw strategic compatibility in specific areas of cooperation and mutual benefit. This study examines India’s growing engagement with the ASEAN and factors how India-South Korea could possibly cooperate within and outside an ASEAN framework. The study tries to establish policy convergence between India’s Act East Policy (AEP) and South Korea’s New Southern Policy (NSP), bilaterally and regionally, factoring the ASEAN and the countries around as the central focus of this cooperation.
Topic:
International Trade and Finance, Regional Cooperation, Treaties and Agreements, and Economic Policy
Political Geography:
South Asia and India

1993. Push vs. Pull Factors of Capital Flows Revisited: A Cross-country Analysis

Author:
Tae Soo Kang and Kyunghun Kim
Publication Date:
02-2019
Content Type:
Working Paper
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Capital market integration contributes to economic growth and it can be more beneficial for emerging market economies (EMEs, hereafter) at their early stages of development where the capital is relatively insufficient. An open capital market also enables investor to share the country-specific risks by holding foreign assets. However, there are also some negative side effects of capital market integration. Financial shocks originating in the center coun-try can be quickly propagated through the integrated financial market. The Global Financial Crisis (GFC, hereafter) is a good example of the contagion of the financial crisis. Volatile cross-border capital inflows and outflows nega-tively affect financial stability, which eventually lowers economic growth by causing financial crises. Despite of these negative side effects, capital market integration has been an inevitable long-term trend for many EMEs over the past few decades (Aizenman et al. 2010). There have been continuous capital flows to EMEs, which started even before GFC and this trend has been more pronounced during the U.S. zero-interest rate period (Ahmed and Zlate 2014). Though some monetary authorities in EMEs tried to moderate the procyclicality of credit flows by implementing policy instruments such as capital controls or macro-prudential policy measures after GFC (Kim and Mehrotra 2018), the common factors in the global financial market still play a crucial role in de-termining capital inflows to EMEs. The relationship between the global financial condition and its impact on capital inflows to EMEs, has been a long-debated issue. This issue concerns whether push or pull factors are the major determinant of capital flows. The push factor represents the common factor that exists in the global financial market or center countries, which influences capital inflows to peripheral countries. These factors are interest rates and GDP growth rates of advanced economies (AEs, hereafter), global risk factors such as VIX (S&P 500 Volatili-ty Index), and the commodity price index. The pull factor denotes domestic factors that attract funds from the global financial market to domestic finan-cial markets. These factors are domestic interest rates, domestic GDP growth rates, and other country-specific characteristics such as exchange rate regime, degree of the capital account openness, institutional quality, and stages of economic development. In previous literature, many scholars have found strong evidence for push factors being the major determinant of capital movement. The interest rates of mature economies and VIX are significant determinants of capital inflows to EMEs. However, there is only some evidence that higher domestic interest rates and higher domestic GDP growth rates pull capital from the center countries to individual EMEs (Koepke 2015). Related to this long-debated issue in academia, the Chairman of the Federal Reserve, Jerome H. Powell recently stated, "... I will argue that, while global factors play an important role in influencing domestic financial conditions, the role of U.S. monetary policy is often exaggerated." With this statement, he also pointed out that the slowdown in capital inflows to EMEs which has been happening ever since 2011 has been mainly due to the narrowing of GDP gaps between AEs and EMEs, i.e., the recent decrease in capital in-flows to EMEs can be attributed to the decline in EMEs' GDP growth rates given the fact that the U.S. GDP growth rate has picked up. In this paper, we revisit this issue of push and pull factors of capital inflows. To this end, we consider the heterogeneity that exists in EMEs by dividing them into four subgroups. We investigate which is the main driver of capital inflows between push and pull factors across country groups. Categorizing subgroups is important for two reasons. First, EMEs are so heterogeneous that we make subgroups which share similar economic fundamentals by re-gions. Second, making subgroups across EMEs is an effective way to indi-rectly consider the regional contagion effect. With this cross-country analysis, we can figure out the differing effects of push and pull factors across country groups, and this can eventually lead to the development and implementation of appropriate policy instruments. Our empirical finding shows that the push and pull factors play a different role in determining capital inflows to AEs and EMEs. The major drivers of capital inflows to AEs are both push and pull factors, but push factors turn out to be the main determinant of capital inflows to EMEs. When EMEs are divided into four subgroups, we find sizable heterogeneity across subgroups. In Asian countries, both push and pull factors are significant, which is similar to AEs, but only U.S. interest rate plays a major role in Eastern Europe. Some pull factors are important in Latin American countries and other EMEs, but these are not robust to alternative empirical models and measures.
Topic:
Capital Flows, Economic Policy, Push Factor, and Pull Factor
Political Geography:
Global Focus

1994. Israel-UAE Cooperation in 2019: Warming Relations, Also in Civilian Affairs

Author:
Moran Zaga
Publication Date:
03-2019
Content Type:
Working Paper
Institution:
Mitvim: The Israeli Institute for Regional Foreign Policies
Abstract:
The relations between the United Arab Emirates (UAE) and Israel are primarily characterized by mutual interest and cautious rapprochement steps. The rapprochement can be attributed to the pragmatic character of the two states and their shared interests, including, inter alia, opposition to the Iranian nuclear program, opposing religious extremism, regional trade, modernization processes, handling similar environmental issues, and participation in global events and projects. The cautious approach and the limitations in these relations derive mainly from the UAE’s avoidance of official normalization with Israel due to the latter’s conduct regarding the Palestinian issue.
Topic:
International Relations, Diplomacy, Regional Cooperation, Conflict, and Rapprochement
Political Geography:
Iran, Middle East, Israel, Yemen, Palestine, and United Arab Emirates

1995. Trends in Israel’s Regional Foreign Policies

Author:
Roee Kibrik and Nimrod Goren
Publication Date:
07-2019
Content Type:
Working Paper
Institution:
Mitvim: The Israeli Institute for Regional Foreign Policies
Abstract:
This document outlines major trends in Israel’s regional foreign policies over the past six months. It is based on the Mitvim Institute’s monthly reports that cover ongoing developments in the Israeli-Palestinian peace process/conflict, Israel’s relations with the Middle East, Europe and the Mediterranean, and the conduct of Israel’s Foreign Service.
Topic:
Security, Foreign Policy, Peace, and Hamas
Political Geography:
Europe, Middle East, Israel, Palestine, Mediterranean, and West Bank

1996. Regional Opportunities to Improve the Situation in Gaza

Author:
Mitvim
Publication Date:
01-2019
Content Type:
Working Paper
Institution:
Mitvim: The Israeli Institute for Regional Foreign Policies
Abstract:
Israeli and Palestinian experts and activists – together with international diplomats – gathered on 31 October 2018 at the UN Headquarters in Jerusalem for a civil society roundtable discussion on “Regional Opportunities in Support of Current Efforts to Improve the Situation in Gaza.” The event, attended by some fifty participants, was initiated and convened by Mitvim - The Israeli Institute for Regional Foreign Policies and Israel-Palestine Creative Regional Initiatives (IPCRI). It included an opening address by UN Special Coordinator for the Middle East Peace Process Nickolay Mladenov and explored how various regional actors can help improve the situation in Gaza, without jeopardizing chances for a broader Israeli-Palestinian peace agreement. It also identified recommendations and possible courses of action. The event was held in cooperation with FriedrichEbert-Stiftung, the Foreign Ministry of the Netherlands, IEMed, and the EuroMeSCo Network. This paper summarizes the discussion.
Topic:
Foreign Policy, Crisis Management, Peace, and Hamas
Political Geography:
Middle East, Israel, Palestine, and Gaza

1997. The 2018 Israel-Turkey Policy Dialogue of the Mitvim Institute

Author:
Mitvim
Publication Date:
01-2019
Content Type:
Working Paper
Institution:
Mitvim: The Israeli Institute for Regional Foreign Policies
Abstract:
In October 2018, the Mitvim Institute held its annual Israel-Turkey policy dialogue, for the seventh consecutive year. The dialogue took place in Istanbul, in cooperation with FriedrichEbert-Stiftung, and was participated by Dr. Nimrod Goren, Dr. Roee Kibrik and Arik Segal of the Mitvim Institute. The policy dialogue included a series of meetings and discussions, with Turkish scholars, journalists, former diplomats, and civil society activists. It focused on Israel-Turkey relations, in light of the current crisis in ties, and on Turkey’s foreign policy in the Middle East. The policy dialogue aimed at helping improve Israel-Turkey relations, by enabling experts from both countries to exchange views on regional developments, to identify opportunities for better bilateral relations, and to increase cooperation between researchers and policy analysts from both countries. Throughout the dialogue, there was a sense that Turkey and Israel can find a way to overcome their current crisis and to reinstate ambassadors. Nevertheless, such progress is not expected to lead to a significant breakthrough in the relations. The Turkish counterparts expressed hope that Israel and Turkey will resume talks on natural gas export from Israel; shared their concern over what they perceive as Israel's support of the Kurds in northern Syria; and pointed out that Turkey and Iran should not be considered by Israel as allies, but rather as countries that cooperate at times regarding shared interest but are also competing with each other and adhering to different ideologies and beliefs. The dialogue also emphasized the importance attributed in Turkey to Jewish community in the US, and to the impact it has on the American discourse towards Turkey as well as on US policy towards the Middle East. This paper highlights key insights from the meetings and discussions that took place throughout the policy dialogue. It does not reflect consensus among all participants.
Topic:
International Relations, Foreign Policy, Diplomacy, and Bilateral Relations
Political Geography:
Turkey, Middle East, and Israel

1998. Alternative Directions for Israeli Foreign Policy on the Eve of an Election Year

Author:
Nimrod Goren, Nitzan Horowitz, Ronen Hoffman, Yohanan Plesner, Zehava Galon, Nadav Tamir, Ofer Shelah, Maya Sion-Tzidkiyahu, Zouheir Bahloul, Elie Podeh, Einat Levi, and Merav Michaeli
Publication Date:
01-2019
Content Type:
Working Paper
Institution:
Mitvim: The Israeli Institute for Regional Foreign Policies
Abstract:
The Mitvim Institute’s second annual conference took place in Tel Aviv on December 30, 2018. The conference explored alternative directions for Israeli foreign policy towards the April 2019 general elections. In recent years, Mitvim has formulated a series of guiding principles for a new Israeli foreign policy paradigm – a pro-peace, multi-regional, internationalist, modern and inclusive foreign policy. The conference sought to translate these principles into concrete policy directions, which will enable Israel to improve its foreign policy, increase its regional belonging in the Middle East and Europe, and make progress towards peace with the Palestinians. The conference featured Members of Knesset (MKs) Ofer Shelah and Merav Michaeli, Dr. Nimrod Goren, Dr. Ronen Hoffman, Zehava Galon, Nadav Tamir, Yohanan Plesner, Dr. Maya Sion-Tzidkiyahu, Zouheir Bahloul, Prof. Elie Podeh, and Einat Levi. It was moderated by Nitzan Horowitz and Merav Kahana-Dagan of Mitvim. The conference was held in cooperation with Friedrich-Ebert-Stiftung, and can be watched (in Hebrew) on Mitvim’s YouTube channel.
Topic:
Foreign Policy, Diplomacy, Government, National Security, Diaspora, Democracy, and Resilience
Political Geography:
Middle East, Israel, Palestine, and European Union

1999. Tunisia and Its Relations with Israel Following the Arab Spring

Author:
Adina Friedman
Publication Date:
02-2019
Content Type:
Working Paper
Institution:
Mitvim: The Israeli Institute for Regional Foreign Policies
Abstract:
The Israeli discourse surrounding regional cooperation tends to focus primarily on the Gulf States and on security issues; as such, it often overlooks more moderate and pro-Western countries in the region, and alternative cooperation tracks that are more along civil and cultural lines. Israel should pay more attention to Tunisia, which constitutes an important geographical, historical, and political crossroads along the Mediterranean coast; which provides insight into democratization processes; which is home to an ancient Jewish community; and which may serve as either an enabling or inhibiting factor for the realization of Israel’s interests in Africa. Despite the current political obstacles to relations between the two countries, there exists a precedent of positive relations and cooperation between Israel and Tunisia, and there is a possibility of expanding this cooperation in the future. Meanwhile, positive interpersonal, cultural, and civil relations should be advanced. These will assist future political relations, once changes occur in regional politics and progress is made in the Israeli-Palestinian peace process.
Topic:
International Relations, Democratization, Bilateral Relations, Arab Spring, and Peace
Political Geography:
Africa, Middle East, Israel, North Africa, and Tunisia

2000. Netanyahu and the Temporary International Presence in Hebron (TIPH)

Author:
Lior Lehrs
Publication Date:
02-2019
Content Type:
Working Paper
Institution:
Mitvim: The Israeli Institute for Regional Foreign Policies
Abstract:
On Janury 28, 2019, Israeli Prime Minister Benjamin Netanyahu announced he was terminating the mandate of the Temporary International Presence in Hebron (TIPH), an observer force established in 1994 after the massacre of Muslim worshipers in Hebron by the Israeli settler Baruch Goldstein. In January 1997, an agreement was signed between the Government of Israel, headed by Netanyahu, and the PLO setting out terms of the TIPH mandate. The sides repeatedly extended the agreement for over 20 years. The observers do not have military or policing functions, and they do not bear arms. Their task is to monitor and report on events and convey classified reports to each side, and to the TIPH contributing states. Netanyahu’s decision, to a large extent influenced by domestic pressure in the runup to the April 9 elections, generated expressions of concern and condemnation by the international community, both by the force’s contributing states such as Norway and Italy, and by Germany, the EU and the UN Secretary General. The reactions noted that the observer force had been an element of the Oslo process and played an important role in the volatile and sensitive city of Hebron, warning against the repercussions of its removal. Changing and adapting the mandate of the observer force should be conducted in a dialogue with the Palestinian Authority and TIPH states, and not dictated as a unilateral Israeli political decision.
Topic:
Treaties and Agreements, United Nations, Territorial Disputes, Conflict, and Peace
Political Geography:
Middle East, Israel, Palestine, and Hebron