Globalisation and the Asia Pacific Economy (Pacific Trade and Development Conference (Papers))

Book Cover......Page 1
Half-Title......Page 2
Title......Page 4
Copyright......Page 5
Contents......Page 6
Illustrations......Page 8
Contributors......Page 13
Abbreviations......Page 14
Preface......Page 18
Introduction......Page 19
1 Globalization......Page 23
MEASURING GLOBALIZATION......Page 24
GLOBALIZATION OR REGIONALIZATION?......Page 27
FINANCIAL INTEGRATION......Page 29
INTERNATIONAL MOBILITY OF LABOUR......Page 31
THEORETICAL BENCHMARKS OF GLOBALIZATION......Page 32
Commercial policy......Page 33
Exchange rate regimes......Page 34
CAN GLOBALIZATION BE SUSTAINED?......Page 35
CONCLUDING COMMENTS......Page 36
REFERENCES......Page 38
WHY WAS EAST ASIA HIT BY THE FINANCIAL CRISIS?......Page 40
THAILAND......Page 41
INDONESIA......Page 42
Corporate sector reform......Page 43
Reform in the government sector......Page 44
WHAT SHOULD BE DONE TO PREVENT ANOTHER CRISIS IN EAST ASIA?......Page 45
REFERENCES......Page 47
FOREIGN DIRECT INVESTMENT IN ASIA PACIFIC......Page 48
THE FACTORS BEHIND RAPID FOREIGN DIRECT INVESTMENT EXPANSION IN ASIA PACIFIC......Page 52
Recent developments......Page 53
MOTIVES BEHIND FDI......Page 59
PROBLEMS ENCOUNTERED BY MULTINATIONAL ENTERPRISES......Page 60
THE IMPACT OF FOREIGN DIRECT INVESTMENT ON ECONOMIC GROWTH......Page 62
CONCLUSIONS......Page 65
NOTES......Page 66
REFERENCES......Page 67
TYPOLOGY OF GLOBALIZATION......Page 70
THE ORIGIN AND DEVELOPMENT OF THE CRISIS: THE SOCIAL DIMENSION......Page 72
PRICES AND CONSUMPTION......Page 73
UNEMPLOYMENT AND CHANGE IN THE LABOUR MARKETS......Page 74
INCOME, POVERTY AND INCOME INEQUALITY......Page 78
HEALTH, EDUCATION AND OTHER SOCIAL ACTIVITIES......Page 79
POLICY RESPONSES TO THE CRISIS......Page 80
SOUTH KOREA......Page 81
Social investment and social safety net programs......Page 82
Social Investment Project (SIP)......Page 83
Other social programs......Page 84
INDONESIA......Page 86
Strengthening the public sector......Page 87
Strengthening social capital of the country......Page 88
SUMMARY AND CONCLUSIONS......Page 89
REFERENCES......Page 90
5 The potential role of foreign direct investment in Indonesia’s recovery......Page 93
FDI policy in Indonesia (1967–85): waves of liberalization and restriction......Page 94
Deregulation and liberalization period (1986–97)......Page 95
The resulting growth, structure and performance of FDI......Page 96
A comparative picture of the five crisis-affected Asian countries......Page 103
The changing nature of FDI: the growth of mergers and acquisitions......Page 105
Announcements of mergers and acquisitions......Page 108
FDI and exports......Page 111
ISSUES AND CONSTRAINTS FACING INDONESIA......Page 112
National policy responses......Page 113
Resurgence of nationalism and questioning of the role of FDI......Page 114
CONSTRAINTS TO AND PROBLEMS WITH FDI IN RESTRUCTURING......Page 115
CONCLUSIONS: THEWAYAHEAD......Page 117
NOTES......Page 118
REFERENCES......Page 119
6 Foreign exchange market liberalization policies in South Korea......Page 120
Gradual liberalization before the crisis......Page 121
Big-bang liberalization after the crisis......Page 123
Rigid exchange rate policies and reserve drain......Page 125
Asymmetric regulation of capital flows......Page 129
FUTURE POLICY OPTIONS IN A WORLD OF GLOBALIZATION......Page 130
Liquidity resolution......Page 131
STABILIZATION OF EXCHANGE RATES......Page 132
CONCLUSION......Page 134
REFERENCES......Page 135
RATIONALE AND VIEWS ON USE OF EXCHANGE CONTROLS......Page 138
EXCHANGE CONTROL REGIME IN MALAYSIA......Page 140
Use of capital controls in managing short-term inflows......Page 141
Period of excessive capital inflows, 1993–94......Page 142
Asian crisis, 1997–98......Page 143
Asian crisis: selective exchange controls complemented by a fixed exchange rate......Page 144
POLITICAL ECONOMY ISSUES IN DETERMINING THE RESPONSE TO THE CRISIS......Page 145
Impact of the measures introduced in 1994......Page 146
Impact of measures introduced during the Asian crisis......Page 147
Did the controls arise from financial repression or lead to financial repression?......Page 149
Did controls affect portfolio flows?......Page 151
What has been the impact of exchange controls on foreign direct investment?......Page 153
Can capital controls have secondary effects and adversely impact FDI in the long-term?......Page 158
Did controls affect the need for external financing?......Page 159
LESSONS FROM THE MALAYSIAN EXPERIENCE......Page 160
CONCLUSION......Page 161
APPENDIX 7.1......Page 162
8 Performance of East Asian corporations before and after the crisis......Page 164
PERFORMANCE AND FINANCING PATTERNS IN EAST ASIA2......Page 165
LITERATURE ON CORPORATE SECTOR AND FINANCIAL CRISES......Page 168
THE PERFORMANCE OF PUBLICLY-TRADED EAST ASIAN CORPORATIONS BEFORE AND AFTER THE CRISIS......Page 176
SUMMARY......Page 182
NOTES......Page 183
REFERENCES......Page 184
9 Risks of financial liberalization and reform for financial stability......Page 186
LESSONS FROM DEVELOPING COUNTRIES’ EXPERIENCES......Page 187
Prudential regulation and bank safety nets......Page 188
Building institutional infrastructure......Page 189
MACRO-ECONOMIC IMPACT OF CAPITAL ADEQUACY REQUIREMENT......Page 190
EXCHANGE RATE, MONETARY POLICY AND OPEN CAPITAL ACCOUNT......Page 191
CONCLUDING REMARKS......Page 192
REFERENCES......Page 193
10 Integrating financial markets in East Asia......Page 194
PRINCIPAL COMPONENTS ANALYSIS......Page 197
COMMON FACTOR ANALYSIS......Page 200
COMMON FACTORS IN EAST ASIA......Page 201
COMMON FACTORS IN EAST ASIAN SUB-GROUPS......Page 204
SPHERES OF INFLUENCE: THE UNITED STATES OR JAPAN?......Page 205
LONG-RUN RELATIONSHIPS......Page 207
CONCLUSION......Page 209
REFERENCES......Page 212
A 10.1 Data definitions......Page 213
Exchange rates......Page 214
THEORY: MONETARY INDEPENDENCE VERSUS CURRENCY UNION......Page 220
AUSTRALIA, NEW ZEALAND, SINGAPORE: EXPLORATORY DATA ANALYSIS......Page 224
EXCHANGE RATE AND TERMS OF TRADE DYNAMICS......Page 228
CONCLUSIONS......Page 233
NOTES......Page 234
REFERENCES......Page 235
VISIBLE IMPACTS OF GLOBALIZATION......Page 237
Enlarged employment opportunities......Page 238
Increased capital supply......Page 240
HOW MUCH CAN CHINA’S EXPORTS GROW IN THE NEXT TWENTY YEARS?......Page 241
‘INVISIBLE BENEFITS’ OF GLOBALIZATION......Page 243
Increased demand for ideas and talents......Page 244
China entered a new phase of reform and external liberalization in the 1990s......Page 245
Two new challenges emerge......Page 246
Reform and opening promote China’s economic growth......Page 247
CONCLUSION AND POLICY RECOMMENDATION......Page 249
REFERENCES......Page 250
13 Evaluation of changes in the corporate governance system of South Korean chaebols......Page 252
WEAKNESS OF THE SOUTH KOREAN CORPORATE SECTOR PRIOR TO THE CRISIS......Page 253
INADEQUATE CORPORATE GOVERNANCE INFRASTRUCTURE......Page 254
OWNERSHIP STRUCTURE......Page 255
No effective exit threat......Page 257
No monitoring by creditors......Page 258
Effects of poor corporate governance on firm performance......Page 259
Reforms after the crisis......Page 260
Increasing the exit threat for poorly performing firms......Page 261
Chaebol restructuring......Page 262
MARKET EVALUATION OF RESTRUCTURING......Page 263
Independence of chaebol-affiliated firms......Page 264
Improvement in corporate governance......Page 265
CONCLUSION......Page 266
NOTES......Page 267
REFERENCES......Page 268
THE ANALYTICS OF ROUNDS......Page 270
Benefits and costs of rounds......Page 271
Preconditions for new rounds......Page 272
THE CASE AGAINST A NEW ROUND......Page 274
Limited liberalization opportunities......Page 275
Emerging anti-global coalitions......Page 277
Options for negotiations outside rounds......Page 280
Building consensus......Page 281
Expanding the channels of global governance......Page 282
Creating a favourable negotiating framework......Page 283
APEC as an alternative venue......Page 284
NOTES......Page 285
REFERENCES......Page 286
15 A quest for a new international financial architecture......Page 287
WHAT HAS BEEN LEARNED FROM THE FINANCIAL CRISES OF THE 1990s?......Page 288
Exchange rate regimes......Page 290
Prudential regulation......Page 291
Capital controls......Page 292
Crisis management......Page 293
Credit crunch?......Page 294
Recovery processes......Page 295
REMAINING AGENDA......Page 298
CONCLUDING REMARKS......Page 299
REFERENCES......Page 300
16 East Asian integration as a determinant of the international economic architecture......Page 303
STYLIZED FACTS......Page 304
Macro-economic policy management......Page 306
Structural change......Page 307
Overhauling crisis management......Page 308
SUMMARY......Page 309
Do it yourself: East Asian economic institutions......Page 310
Sub-regional trade agreements......Page 312
Monetary integration......Page 313
Regional crisis prevention and management......Page 314
IMPLICATIONS OF REGIONAL INITIATIVES......Page 315
CONCLUSION......Page 316
REFERENCES......Page 317
Index......Page 319