Operational oceanography in Indonesia

In 2005 Indonesian and European institutes joined to start the first step for the implementation of an Ocean Operational System in the Indonesian archipelago. The system will support the decision making process for the sustainable use of marine resources, providing useful information and added value products as well as a service for an improved management of the sea with high business impact to targeted groups as public authorities and commercial operators (coastal managers, fishermen, shipping companies). In this paper the System is shortly described with its potential benefits and economic and social impacts.

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Free trade agreements and vertical-specialisation in East Asia

Regional integration in East Asia has been described as ‘market-led’ integration driven by the activities of multinational corporations creating vertical specialisation. This paper investigates the effect of free trade agreements (FTAs) on vertical specialisation-based trade by employing a gravity estimation for a sample of nine East Asian countries plus the US. We find that FTAs promote international trade based on vertical specialisation and enhances deep integration between countries. The FTA effect on vertical specialisation-based trade increases with pre-agreement vertical linkage level, that is, the deeper the real integration between countries the larger the FTA impact. The results of this paper also suggest that deeper economic integrations, such as currency unions, will enhance trade based on vertical production by reducing the risk of exchange rate volatility.

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The awakening of the red dragon. China fills the power vacuum in the Far East

The paper analyses the basic parameters of the power of China, according to Geopolitical Theory. Even though the authors adopt a critical approach on some aspects of the geopolitical theory, the geopolitical analysis elucidates the interests of China and the United States and focuses on the way of which the American decision-making system perceives China. The article interprets the geopolitical role of China, starting from the origins of geopolitical theory to the contemporary international relations theory. In addition, it focuses on the current geo-strategic context of the Far East. It analyses Chinas' strategic thinking, China's nuclear doctrine and its military power as compared to the neighbouring countries and as a major player in the world economy.

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Japan, China and East Asian regionalism: implications for the European Union

East Asia is becoming an increasingly coherent regional entity in political economic terms, and remains a region of enormous geo-strategic significance for the European Union. Europe’s links with China and Japan are especially important, and moreover these two countries are looking in various ways to exercise various forms of regional leadership in East Asia. This has critical implications for the EU’s relations with the East Asia region generally, and also for the wider international system. Similar and related impacts maybe construed from deepening East Asian regionalism, involving processes where both Japan and China play vitally important roles. The analysis presented here examines the both micro and macro level developments in East Asian regionalism, and issues relating to Japan, China and regional leadership. It concludes by discusses the implications of these matters for the European Union, and recommends that the EU should pay particularly close attention to emergent exercises of regional leadership in East Asia, most likely to be performed by Japan and/or China.

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EU and Asian countries policies and programmes for the diffusion of sustainable energy technologies

The Asian region accounts for already over 40% of the global economy, and is becoming the world’s main manufacturing hub. Unprecedented changes in economic growth and trade in the last couple of decades have resulted in severe degradation of the regional, as well as the global environment that could offset the advantages that economic growth has brought to the countries and their populations. In this framework the need to deploy sustainable energy technologies is a key concern for the global community. This paper gives an overview of EU programmes and policies to develop sustainable energy technologies and the common barriers faced to technology implementation in EU and Asian countries. Following that, the approaches and mechanisms that are used internationally for overcoming the barriers to technology transfer and implementation are presented. After having assessed barriers to technology implementation and possible ways and programmes to help overcome them, the paper provides specific examples of success stories of how government policies and programmes, in combination with involvement of the private sector, can be effective in sustainable energy technology transfer and implementation in both EU and Asian countries. Finally, the opportunity that has recently arisen to enhance the introduction of sustainable energy technologies in developing countries through the development of programmes of related activities as CDM projects is presented and indicative mutual benefits for the strengthening of the EU Asian partnership are highlighted.

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Confucianism and the concept of liberty

Liberty is a concept absent in, and alien to, Confucianism. The term “tsu-you,” (or “cha-yu,” in Korean) is a modern neologism concocted by East Asian thinkers in the 19th century struggling to translate and come to grips with Western political theory. Moreover, the term that they ultimately decided to use was a Taoist, not a Confucian, term. Hence, if this lecture was entitled “Concept of Liberty in Confucianism,” it would have been a very short one. Confucianism has no room for liberty.

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Future targets for Asian regional integration

The central framework of Asian integration is ASEAN+3 and, since its first Summit meeting in 1997, it has advanced regional integration in East Asia. Based on the direct experience of the author, this article presents a critical assessment of the progress made over the past ten years and argues that the ‘Singapore Declaration’ of 2007 is not ambitious enough for the future. An East Asian customs union (EACU) and common regional market should be the next targets for trade integration. In terms of monetary integration, Asia should aim for de-dollarisation and to achieve this it is crucially important to create a regional Asian monetary system (AMS).

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Japan’s reluctance in East Asian economic integration

Until 1997, the only preferential trading arrangement, which existed in East Asia, was the ASEAN Free Trade Area (AFTA). Former Prime Minister of Malaysia Tun Dr. Mahathir had realized earlier the deficiency of AFTA in terms of stimulating economic development. In 1990, he proposed to ASEAN members to form the East Asian Economic Group. Due to regional political factors, his proposal was turned down and replaced with the East Asian Economic Caucus in 1992. In 1997, again, he proposed that ASEAN needed to establish large economic cooperation with other countries in East Asia. His suggestion had been warmly responded by the members of East Asian countries. At the ASEAN summit in Manila 1999, ASEAN Plus 3 (APT) was created. ASEAN, China, Japan, and South Korea had agreed and reached a joint statement to form a free-trade area by the year 2020. The establishment of APT was timely since most countries in the world are moving toward establishing wider or larger economic blocs due to the failure of multilateralism of the WTO in creating a new trade agreement. However, there is a shortcoming in the process of building APT, in the minimal and uncertain role of Japan in integrating economies in East Asia. This behavior has disappointed members of the group. The intention of this paper is to discuss the behavior of Japan in the economic integration process in East Asia.

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A note on the feasibility of a monetary area in the East Asia

After the constitution of the European Monetary Union (EMU), a new scope for monetary coordiantion is emerging in other regional areas. The standard approach to theoretically analyse the feasibility of a monetary union is the optimum currency areas (OCA) approach. Although this approach has been claimed to be non-operative, recent studies using synchronisation measures have shown a high potential applicability. This paper provides an empirical application of the OCA theory to a hypothetical East Asian monetary union centred on Japan’s currency. We find that despite the increasing synchronisation of macroeconomic determinants of a monetary area during 1980–2001, the perspective of an Asian currency union is still not economically feasible.

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Are economic forecasts of the International Monetary Fund politically biased? A public choice analysis

The paper shows that the economic forecasts of the IMF are frequently distorted by political bias. Longer-term growth forecasts for the industrial countries reveal an absolute as well as relative optimism bias and a significant correlation with election dates in the US. Furthermore, the IMF projections for the developing regions are strongly biased toward optimism. The significant relationship between forecast errors and IMF net credit flows to a region supports the hypothesis that the IMF staff tries to legitimize its lending activities with overly optimistic forecasts.

Should it be curtains for some of the IMF’s lending windows?

Increasing attention is being paid to IMF governance and operations, but not to how IMF programs are differentiated under the array of available lending windows. This paper examines empirically the economic and political circumstances associated with the use of IMF facilities. It therefore extends existing research into the determinants of IMF arrangements by investigating the extent to which different influences are at work in the case of different facilities. Focusing initially on extended arrangements as compared to stand-bys, the results indicate that although initially the facilities were used in different economic circumstances, since the mid 1980s these differences have largely disappeared. Instead the differences between user countries have become more political than economic. There are, however, some differences between concessionary and non-concessionary facilities beyond the income levels of countries using them. The policy implications for the range and design of the Fund’s lending windows are discussed.

The institutional failures of International Monetary Fund conditionality

The purpose of this paper is to propose an analytical framework integrating the diverse explanations of the failure of IMF conditionality. The IMF is a key player in the running of markets in a global economy. The institutional failures of IMF conditionality are appreciated at two complementary levels: (a) its intrinsic bureaucratic bias, and (b) the inability of the IMF to manage the institutional change required for the development of market processes. A new approach of conditionality suggests the separation of the role of the IMF as financial backer from its role as adviser to countries confronted by the globalization process.

The new impetus towards economic integration between Europe and Asia

With the end of the Cold War and the collapse of the Soviet Union the large economic space of the Eurasian super-continent has also become part of the world-wide globalization process. How this process of integration of Eurasia is proceeding in key areas of cross-continental linkages is of great importance for the future of the region and for the future of the World as a whole. One of the key questions will be whether the regional and global institutions can provide adequate support for this integration process.This paper was presented as a keynote speech at The Fourteenth OSCE Economic Forum in Vienna on 23 January 2006. It draws on a longer paper by (Linn and Tiomkin in press).The authors are, respectively, Executive Director of the Wolfensohn Initiative at The Brookings Institution, Washington, DC, USA, and MBA and MPA/ID candidate at Harvard University. Johannes Linn served as Vice President for Europe and Central Asia at the World Bank from 1996 to 2003.

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The political weakness of the EU in East Asia: a constructivist approach

This paper provides a constructivist explanation of the political weakness of the EU in East Asia. By examining the corporate identity of the EU as well as its social identities towards ASEM, China and Japan, I argue that the identities which the EU has constructed towards the outside world and in relation to the region, based on self recognitions of its superpower status and the defence of certain political values, is disliked by both China and Japan for different reasons. Without the support of the two regional superpowers, the EU is not capable of getting involved in the resolution of East Asian hard political affairs.

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Potential Benefits from a Deep EU–India Free Trade Agreement

Both parties to an eventual EU India FTA have agreed that it should not merely address tariff barriers but should also go further into what is known as deep integration, originally developed in the 1990s by R.Z. Lawrence. This relates to the removal of all obstacles to cross border business whether actual trade barriers or domestic regulations. We distinguish deep institutional integration from the deep integration of markets. We ask the question how one may support the other. There are potential market failures that can be addressed by trans-national rules on standards and technical regulations and services, but we conclude that the biggest impact of a deep RTA would be on the domestic economy of India if it provides an opportunity for reform. It should be noted that the paper draws on a study undertaken by the authors for DG Trade, but it represents only the views of the authors.

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Peace and community building in Northeast Asia

This topic involves some difficulties, one of which is about the concept of “Northeast Asia”. Broadly speaking, Northeast Asia should include China, Japan, Korean Peninsula, Russia’s Far East, and Mongolia. It is obviously not possible to address complex issues in such a broad region within several pages. Therefore, this paper shall focus on the main part of Northeast Asia, i.e., China, Japan, and Korea.

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‘Diplomatic Divergence: the Japanese and British Responses to Indonesia’s Confrontation of Malaysia 1963–1966’

While Indonesia’s policy of Confrontation towards Malaysia brought it into direct military conflict with Britain, this same event prompted Japan to pursue its first explicit postwar diplomatic initiative. Due to different strategic goals for the region, Britain and Japan’s approaches to Indonesian bellicosity were markedly different. Notably, while Britain took a hard-line stance with President Sukarno, Japan in contrast took a lenient approach eschewing economic and diplomatic isolation of Indonesia. With a latent warming in Anglo–Japanese ties beginning in this decade, this paper demonstrates that despite their antithetical approaches to this Southeast Asian crisis bilateral relations were not adversely affected.

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APEC and emerging regionalism in North East Asia

This paper explores what kind of regional trade agreement is most likely to emerge in Northeast Asia by tracing the trajectories of APEC. Taking into account the underlying potential of realizing cumulative causation effects between market expansion and technology cooperation among China, Japan and Korea, it reaches the tentative conclusion that a Northeast Asia Regional Trade Agreement (RTA) might take shape in the near future despite the prevalence of polarized versions in the cultural heritage and the international relations between these three countries.

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Regional energy cooperation in North East Asia: Lessons from the European Experience

The three major oil importing countries of Northeast Asia—China, Japan and South Korea—are concerned about future security of energy supplies to fuel their dynamic economic activity. Currently all three countries are highly dependent on imports of oil from the Middle East, a region with inherent political instability. Russia’s rich reserves of oil and gas in Eastern Siberia and the Russian Far East offer an obvious alternative. Given the geographical proximity of Russia and its desire to increase its energy exports to Northeast Asia, there is huge potential for cooperation. So far there has been no real intra-regional cooperation and no common external policy towards Russia. Despite obvious differences between Europe and North East Asia, the European model of energy cooperation, developed over the past 50 years, offers some useful lessons.

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How is the EU-ASEAN FTA viewed by ASEAN stakeholders?

Since April 2007, the EU Commission has been entrusted to start negotiating a FTA with ASEAN countries. Being enshrined in the logic contained in its ‘Global Europe strategy’, the proposed EU-ASEAN FTA finds its economic rationale in the expected overall positive impact found by most econometric studies on the topic. This article argues that although beneficial, these studies are limited conceptually and methodologically. In particular, they are unable to tackle the issue of differentiated effects on several groups of stakeholders. By analysing, through a questionnaire, the opinion of a number of ASEAN stakeholders, this article brings complementary information on the perception of the planned EU-ASEAN FTA by these different stakeholders. Whilst offering many opportunities, the FTA presents also a number of risks, the most critical one being the costs of adjustment, particularly for poorer ASEAN member countries. This paper draws partly on research work conducted jointly with F. Nicolas as part of a research contract for the European Commission DG Trade

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