Sorting out the Conceptual Muddle: The Role of the Japanese Economy in the Asian Financial Crisis

Karel van Wolferen argues that, since Japan's political economy was the main factor in creating the circumstances that led up to the East Asian financial crisis, studies must focus on it to understand this event. The Japanese economy, which is here described as a war economy operating in peacetime, provided the model for East Asia's 'tiger economies' that imitated the Japanese government in its targeting of sectors for investment, especially the construction industry in the 1980s. These other East Asian economies proved more vulnerable to crisis than the Japanese economy because they were more open to foreign investment and did not have Japan's closely knit economic and financial networks and institutions. After presenting this preface to the crisis, van Wolferen then criticizes the current East Asian economic situation, in which international institutions continue to force the Western ideals of transparency and deregulation on most of the East Asian economies while permitting Japan to remain the least transparent economy of the entire region.     

Invisible Linkages: A Regional Perspective of East Asian Political Economy

This article studies East Asian political economy from a regional perspective. The Asian financial crisis showed that East Asian economies are highly regionalized. However, the linkages among Asian economies, mostly informal in nature, often appear "invisible" to many in the West, who focus more on the states and formal institutions. Drawing on a broad set of literature mostly in Asian languages, this paper provides a systematic study of informal integration in East Asia, which consists of not only regional production networks, but also ethnic Chinese business networks and subregional economic zones. It finds that the three informal mechanisms have formed an interrelated pattern of regional integration in East Asia. The nature of the economic networks is very useful in explaining the Asian crisis and the different performances of East Asian economies in the crisis. The crisis has also resulted in profound changes in informal integration. While the Japanese–led production networks have been greatly weakened, the Chinese Economic Area is rising, driven by the ethnic Chinese business networks and subregional economic zones. As a result, the Japan–dominated "flying geese pattern" has been broken. The connections between Greater China and the United States have also been enhanced and are out–competing the Japanese production networks. Many of the new developments have been ignored in the West but they are key factors that will shape the future of Asian and World political economy.     

In the Wake of the East Asian Economic Crisis: Toward an Interdependent but Non-convergent Global System

Donald C. Hellmann here studies the political, societal and cultural forces that created the backdrop for the East Asian financial crisis. He presents three myths about the disaster, emphasizing that this event took place in the context of governmental and economic structures embedded in society and thus not easily modified. These myths include the idea that this region will not become the largest economic region in the next 25 years, that East Asian economies cannot continue to grow without Western-led structural change and that the existing economic and security multilateral institutions require only minor reform to face this new international order. He then goes on to argue that no international institution or world power has filled the new statesmanship vacuum of the post-Cold-War interregnum. A new global system will be necessary to face the challenges of this new balance of power.     

Regionalism in Asia: Past and Future

In order to predict the future of East Asia in the wake of the 1997-98 financial crisis, Kenneth B. Pyle looks to the region's past for lessons. He assesses East Asia's 'old new orders' and deduces six major lessons from their history that can be applied to the current post-Cold-War interregnum. The region is gaining an unprecedented power to shape its own system and to influence the international order, but its current institutions are built on extremely fragile foundations. The risk is that we are in an age of rising nationalism within the region and the emergence of strategic rivalries, arms races, and competition for limited resources. Finally, in looking at Japan, Pyle predicts that the currently awkward US-Japan alliance will determine the region's stability, despite the fact that Japan will most likely continue to shy away from a proactive role in the area. These lessons lead to the argument that events will drive the region's international relations in the future and that the region must seize this opportunity to create new stabilising institutions.     

Lessons from the Asian financial crisis for the eurozone: a comparative analysis of the perilous politics of austerity in Asia and Europe

This paper comparatively examines diverse responses from three major actors in the global political economy (the state, civil society, international financial institutions) to the Asian financial crisis of 1997 and the current eurozone crisis. First, it analyses conditional lending policies of international financial institutions (IFIs) such as the International Monetary Fund toward countries in fiscal distress. It then critically examines how the lending policies engendered social tensions and conflicts as austerity measures such as cuts to social welfare programmes hit hard on the populace. Examining how the state and civil society in Asia reacted to and, as a result of contentious state–civil society interactions, altered the policies of IFIs, the paper draws lessons from the Asian financial crisis for the European Union and puts forwards alternative policy suggestions.     

A Postscript to the Asian Financial Crisis: The Fragile International Economic Order

This article situates the East Asian financial/economic crisis among other key economic events of the post-Cold-War world, assessing its significance alongside that of America's extraordinary economic growth in the 1990s and the collapse of the 1999 World Trade Organization meeting in Seattle. According to the author, the financial crisis could not have been avoided merely by removing national governments and international institutions such as the International Monetary Fund from markets. Such faith in unregulated markets is based on the incorrect assumption that investors are rational, as well as on the anomalous experience of the United States in the 1990s. While the US economy did improve markedly over the last decade, this growth was not due to unfettered capitalism, but rather to idiosyncratic aspects of the economy, such as a high borrowing rate. Gilpin points out that the end of this economic growth, alongside the protectionist impulses exhibited at the Seattle meeting, has contributed to a move away from international trade liberalization. The American free-market model, tarnished by corporate corruption, he argues, is no longer the goal of developing economies concerned about the lack of market controls. The result, he fears, is a growing fragility in the stability and governance of the global economy.     

面向21世纪的东亚经济共同体前景分析

90年代以来 ,东亚地区经济合作在多种动力的推动下 ,突飞猛进地发展。但目前建立东亚经济共同体仍存在着一定的障碍因素。要克服这些障碍 ,加快东亚地区经济一体化的进程 ,就必须调整该地区的大国关系 ,建立多层次的、小范围的区域合作组织 ,并针对东北亚政治经济形势复杂的特点 ,将经济发展与合作放在首位 ,走“以经促政”的道路 ,最终实现建立东亚经济共同体的目标。     

国际机制在东亚货币合作中的效用性问题

在国际经济体系中,有效的国际制度安排将引起行为体的利益追求以及行为体之间的互动关系发生变化,以致国际关系行为体将在多大程度上遵守国际机制的约束。东亚区域合作具有非正规化、非制度化等特点,东亚货币合作中的机制规范并非完全以制度的形式确定下来。东亚货币合作中的机制属性主要体现在一系列双边和多边的协议中,并且是以基础的机制层次如区域性危机防范、救援机制等为发展点。由于这些发展点具备了机制属性,国际机制在东亚货币合作中的效用性便应得到更多的关注,以使得东亚货币合作能被更好地加以规范和引导。     

How to Change Your Foreign Policy in 100 Days: A New Course with the Prodi Government?

Conventional wisdom has it that the new government of Romano Prodi managed to effect a significant “shift” in Italy's foreign policy away from the course of the centre-right in the proverbial first 100 days of government. A number of discontinuities with the foreign policy of the Berlusconi government have been invoked, ranging from Italy's relations with Europe and its transatlantic posture, to its engagement with areas of crisis such as the Middle East. But these claims have to be substantially qualified. In fact, it appears that the foreign policy of the Prodi government has rather pragmatically blended elements of change and continuity, and that the shift which has occurred in some areas should be understood more as a combination of domestic and international developments than a result of the change in government alone. Moreover, in order to really change Italy's foreign policy – and change it for the better – the government should focus on a different set of priorities, mainly the institutions, instruments, politics, and ideas of foreign policy.     

Preventing protectionism: International institutions and trade policy

This paper examines the role of international institutions in preventing the rise of protectionism. We analyze states?? choices in trade policy during the current global economic crisis, a situation likely to exacerbate uncertainty in the conduct of commercial relations and to push countries toward ??beggar-thy-neighbor?? trade policies. The main argument of the paper is that the numerous international institutions present in the international system during the current economic crisis serve as conveyors of information and mechanisms of commitment and socialization. They mitigate the uncertainty problem that prevails in prisoner??s dilemma settings such as trade. Economic international organizations increase the flow of information about the preferences and behaviors of its members. Non-economic organizations also have a role to play as social environments that encourage cooperation. Specialized international institutions devoted to trade, such as the WTO and preferential trade agreements (PTAs), not only provide monitoring and enforcement functions but also lock in commitments to liberal trade through legal obligations that make defections costly. We test our argument using a dataset of trade policies during the current economic crisis and of membership in international organizations. The paper finds strong support for the role of international institutions as commitment and socialization mechanisms in preventing the rise of protectionism.     

Popular perceptions of political regimes in East and Southeast Asia

Political regimes in East and Southeast Asia run the full spectrum from liberal democracy through various hybrid democratic-authoritarian types and on to full-blown authoritarianism and totalitarianism. While political scientists have invested much effort and ingenuity in creating typologies of regimes to better understand the empirical diversity of political structures and processes, much less attention has been paid to what the citizens think. How do people in East and Southeast Asian countries perceive their own institutions and performance of governance? This article uses public opinion data derived from the AsiaBarometer 2006 and 2007 Surveys of 12 East and Southeast Asian countries to map what citizens actually think about their structures, processes, and outcomes of governance and compare these with the regime classifications of political scientists. The results revealed universal commitment to elections but disillusionment with political practice, positive estimations of the institutions of governance in Southeast Asia but much less enthusiasm in East Asia, and a preference for moderate opinions. There is no clear overall correlation between regime type and popular perception.     

International Socialization in Difficult Environments: The Organisation for Security and Cooperation in Europe in Central Asia

This article explores the potential of the Organisation for Security and Cooperation in Europe (OSCE) to be an agent of socialization in the five Central Asian Republics of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. In drawing on both rationalist and constructivist approaches to international socialization it is argued that the organization's inability to provide tangible material and political incentives as well as Central Asia's indigenous culture and institutions impede successful socialization dynamics. Moreover, the power-oriented elites consider the bulk of the OSCE activities to be a threat to their grasp on power, not only making socialization almost impossible but also making OSCE–Central Asian cooperation increasingly difficult to sustain. Recommendations to increase the OSCE's influence in the region concentrate on a better understanding of the cost-benefit calculation of Central Asian governments as well as a more responsive attitude to traditional institutions in the OSCE's approach toward the region.     

Ethnic and Regional Politics after the Asian Economic Crisis: A Comparison of Malaysia and South Korea

This article explores the impact of the Asian economic crisis on the Malay-Chinese and Kyongsang-Cholla regional political cleavage structures in Malaysia and Korea respectively. The weakening of previously intractable cleavages and the rise of cross-cutting cleavages have the potential to contribute to democratic consolidation, by enhancing democratic uncertainty or 'organised uncertainty'. The analysis of post-crisis election results shows that Malaysia's traditional ethnic linkages between political elites and voters became more flexible after the crisis and created a strong cross-cutting dimension to the political cleavage structure. In contrast South Korea's regional cleavages remained fundamentally undisturbed and may even have been reinforced by the crisis, notwithstanding evidence of defections from regionally dominant parties.     

东亚经济复苏前景展望

１９９９年以来,遭受亚洲金融危机影响的东亚国家出现经济复苏迹象,如汇率基本稳定,股票市场活跃,出口大幅度增长,外汇储备增加。东亚经济真的复苏了吗？我们认为;东亚经济复苏的进程将受到外部经济环境变化和内部经济调整状况的影响,存在许多不确定性的因素。断言东亚经济已经进入全面复苏的阶段为时尚早,同时,东亚国家再次陷入危机的可能性也不大。稳步推进金融体制改革、加快经济结构调整和发展模式调整步伐,是东亚国家走向全面复苏的基础,也是２１世纪东亚国家创造新一轮经济发展空间的关键。     

The security policy of the greens in Italy

This article provides an overview of the current state of financial regionalism in East Asia and discusses why and how the East Asian countries should go forward in terms of financial and monetary regionalism. It highlights intra-regional exchange rate stability as an important regional public good and makes the case for greater exchange rate cooperation. To this end, East Asian countries should gradually reduce their exposure to the US dollar and move towards currency basket regimes which would sustain relative intra-regional exchange rate stability while allowing for sufficient flexibility to accommodate idiosyncratic shocks. Against the backdrop of the global and European financial crisis, the article also urges a reconsideration of the costs and benefits of international – and regional – financial integration and calls for a further strengthening of East Asia's regional financial architecture.     

The challenge of institution-building in Asia and its implications for Asia-Europe relations

  East Asia, including Northeast Asia and Southeast Asia, has developed tightly-linked production/distribution networks through globalizing corporate activities. The vertical chain of production in East Asia has been even more sophisticated than economic integration in East Europe or Latin America. However, the political environment of East Asia for trade and investment has been far from borderless. The integration effort at the policy level has been very much limited so far, due to the historical background as well as geopolitics surrounding East Asia. The Asian currency/financial crisis provided these countries a historical turning point. After the burst of the crisis, East Asians realized that they have to take care of themselves in their difficulties, not depending on outside forces. A natural choice for them was to step into the realm of regionalism. In 1998, Japan and Korea officially announced that they would discard the long-lasting GATT/WTO-only approach and adapt the multi-layered approach, including both regionalism and multilateralism. The ultimate goal of regionalism would be a region-wide integration including ASEAN+3. As a steppingstone, Japan signed the Japan-Singapore Economic Partnership Agreement (JSEPA) in January 2002. In a parallel move, the ASEAN and China Leaders announced in November 2001 the establishment of an ASEAN-China Free Trade Area (ACFTA) within 10 years. This article will follow up the most recent advancement of regional institutional building in East Asia with the emphasis on peculiar characteristics of economic integration in the region and discuss its implications for Asia-Europe relations. This paper is heavily drawn from Kimura (2002, 2003).     

The Perils and Promises of Democratization through United Nations Transitional Authority – Lessons from Cambodia and East Timor

This article compares democratization under the aegis of the United Nations in Cambodia and East Timor. The analysis points to the inherent contradictions and problems of democratization in post-conflict situations and discusses the difficult issue of timing. It draws four generalized conclusions about democratization through international interim governments in post-conflict societies. First, UN-led interim governments can provide a solution to the problems of civil strife, insecurity, and political instability in disrupted states. Second, democratization through international interim governments in civil-war countries can be successful if the transitional authority is able to maintain a stable ‘hurting balance of power’ and to guarantee the parties' compliance with democratic procedures. Third, international interim regimes like UNTAC are designed on the premise that reconciliation among the domestic parties is possible. If the premise turns out to be inaccurate, the very foundation of the peace process is challenged and it will be almost impossible successfully to adjust the interim government's institutional structure. Fourth, the cases of Cambodia and East Timor demonstrate that democratization must be embedded in a comprehensive agenda of political, social, and economic methods of peace-building. If interim governments end before the roots of democracy are deep enough and before democratic institutions are strong enough to stand alone, then the entire endeavour may fail.     

近期美元汇率走势及其对东亚经济的影响

随着国际金融危机的持续深化,近期国际市场上不管是美元汇率,还是原油、黄金和有色金属等大宗商品期货价格,都在频繁波动,这种金融市场的剧烈震荡,意味着美元本位的国际货币体系正在经受严峻的考验,世界经济形势不容乐观。     

The US,the USSR and the Berlin crises: Perceptions and motivations

Berlin has been a central issue in the postwar dispute between East and West. Often it has been the site of political tensions that brought the Soviet bloc and the West to the brink of open combat. Its geographical location, unique political status, and dramatic division have made Berlin an important symbol in the struggle for the control of Germany and central Europe. Berlin's present role in international politics is noticeably muted. Yet its political status remains essentially unchanged. It remains sharply divided between the East and West even after the past decade's concessions from both sides. Its geographical location is now no less important strategically or politically.     

ASEM and the future of Asia-Europe relations: Background,characteristics and challenges

The article mainly discusses the background and implications of Asia-Europe Meeting (ASEM), from an Asian perspective. It will be clarified that the ASEM process was a by-product of increasing tensions between multilateralism and regionalism. As a comprehensive cooperation forum between the EU and 10 East Asian countries, comprising political, economic and cultural agenda, ASEMs approach so far was multi-purposed and multi-faceted. The Asian members of ASEM have shown different strategic behavior in approaching ASEM, which is the result of their diverse geopolitical positions. However, the Asians, especially since the financial crisis of 1997, are well aware of the utility and necessity of their own regionalism, and many initiatives have already been brought into effect, negotiated or even feasibility-studied. The ASEM process may, therefore, find itself in increasing tension with this increasing regionalist tendency in East Asia. It is an immediate task for both European and Asian members of ASEM to revitalize the dynamics of ASEM cooperation.