Asia Regional Integration Center

Kiyoshi Nishimura, a senior banker with the European Bank for Reconstruction and Development, has been appointed as the first Chief Executive Officer of the Credit Guarantee and Investment Facility (CGIF), a trust fund of the Asian Development Bank. CGIF will provide guarantees for local currency denominated bonds issued by investment grade companies in the Association of Southeast Asian Nations, People’s Republic of China, Japan, and Republic of Korea. Read news release.

After last year’s strong economic recovery, emerging East Asia will see growth moderate this year as authorities continue to battle inflation amid anemic recovery and deleveraging in advanced economies, says the July issue of the Asia Economic Monitor. The report suggests that a pragmatic approach to a range of policies may help governments manage the inflationary impact of sustained and volatile changes in commodity prices. Read the report and its news release. Watch and listen.  OREI Head Iwan Azis talks about the July 2011 AEM in BBC.  

Rogelio Mercado and Cyn-Young Park identify determinants for the size and volatility of various types of capital flows to emerging economies, with evidence generally pointing to the relative importance of “pull” factors. Significant influence of a regional factor also suggests the role of regional economic and policy cooperation for effective management of capital inflows to emerging economies.  Read more.  

Free trade agreements (FTAs) continue to grow rapidly in Asia and the Pacific region. From just 54 in 2000, there were 245 FTAs as of July 2011, according to the Asian Development Bank. FTAs draw economies closer together and allow supply chains and production networks to flourish. About half are operational, with 65 under negotiation and 57 under discussion. Track FTA trends.

The Overseas Development Institute (ODI), an independent think tank on international development, organized a public event on “The Future of the World Trading System” on 22 July 2011. It was held at the ODI headquarters in London and streamed live online. The event aimed to investigate key factors that shape the future world trading system by discussing issues relevant to the Doha Round, the so-called “Plan B” agreement, the effect of widespread FTA proliferation, and the future role of the World Trade Organization (WTO). Event materials can be accessed here.

This first RTG Co-chairs report—Aid for Trade in the Asia–Pacific: Its Role in Trade-Driven Growth—takes stock of the Asia–Pacific experience and identifies the way forward for the WTO Aid for Trade Initiative in the region. Aid for Trade offers the opportunity to close the gap between the “two faces of Asia". The report shows that a regional approach backed by national strategies will ensure that available assistance is used most effectively for maximum benefit.It also shows that we must continue to seek additional concessional finance for well-designed projects and programs with high rates of return. Aid for Trade must also combine concessional finance with less concessional assistance where appropriate. See also Aid for Trade for the Asia-Pacific website.  

C. Randall Henning compares six regional economic crises over the last four decades and the institution building—or decay—that followed. The analysis concludes that five conditions are especially important in generating a constructive regional response: (i) a significant degree of regional economic interdependence; (ii) an independent secretariat or intergovernmental body charged with cooperation; (iii) webs of interlocking economic agreements; and, as elements of the multilateral context, (iv) conflict with the relevant international organization (such as the International Monetary Fund [IMF]); and (v) the support of the United States. Read more.

Richard Baldwin employs feedback mechanisms to organize Europe’s postwar integration narrative and then draws lessons for today’s integration of East Asia. The paper suggests that the spontaneous cooperation that created “Factory Asia” has not been codified. One starting point for Asian regional institutions would be to institutionalize the spontaneous cooperation that already exists on trade, services, and investment. New, creative thinking is needed on the sort of soft-law commitments and new modes of cooperation that would make this work with limited sovereignty pooling. Read more.