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Policy Analyses
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Investment Environment after the Financial Crises in the Asia-Pacific Region
The Asian crisis of 1997 gives us a valuable lesson that foreign direct investment (FDI) can play a more important role than other capital flows such as bank lending and portfolio equity investment. This paper explains the relatio..
Taeho Bark et al. Date 2000.12.30
Overseas direct investmentDownloadContentSummaryThe Asian crisis of 1997 gives us a valuable lesson that foreign direct investment (FDI) can play a more important role than other capital flows such as bank lending and portfolio equity investment. This paper explains the relationships between FDI and the crisis. Specifically, the paper studies the role of FDI for a stable economic growth. Recent developments of inward FDI policies by the Asian member economies of APEC are then analyzed after they are categorized into four groups within a framework that is developed in this paper. Some important, generalized implications for FDI policies are also provided.
Key words: Asian Crisis, Foreign Direct Investment, Economic Growth, APEC -
A Model Development for Measuring Global Competitiveness of the Tourism Industry in the Asia-Pacific Region
This study developed the evaluation model of competitiveness, and suggested "four dimensional sources of competitiveness". The primary sources of competitiveness include the subject, environment, and tourism resources. The seconda..
Chulwon Kim Date 2000.12.30
DownloadContentSummaryThis study developed the evaluation model of competitiveness, and suggested "four dimensional sources of competitiveness". The primary sources of competitiveness include the subject, environment, and tourism resources. The secondary sources of competitiveness are comprised of tourism policy, tourism planning, tourism investment, tourism tax and prices, and tourism management. The tertiary sources of competitiveness include tourism infrastructure, tourism reception system, tourism attractiveness, tourism publicity system, and tourism manpower. The fourth sources of competitiveness are comprised of tourism demand, tourism employment, overall tourism performance, and tourism export. These four sources of competitiveness are determinants which dominate competitiveness in the tourism sector.
The constantly growing number of travel destinations, and the enhanced quality of existing ones, is putting great pressure on those responsible for a given destination to find better ways to compete in the tourism marketplace and to do so in a sustainable manner. The first step in achieving this goal is to better understand those forces and factors that determine the competitiveness of major tourism destinations.
Given the wide-ranging nature of the concept, and the problems of application, it is not surprising to find that there is no unique measure for competitiveness. The notion of tourism competitiveness must be consistent with the notion of 'competitiveness' in the international economics and international business literature. The literature on international competitiveness was critically reviewed with a view to developing a framework suitable for tourism research.
This research uses a concept of tourism competitiveness, mixing with national competitiveness, like the concept of M. Porter. Competitiveness in the tourism sector is defined as the ability of the tourism market environment and conditions, tourism resources, tourism human resources, and tourism infrastructure in a country create an added value and increase national wealth. That is to say, "the competitiveness in the tourism sector" is not only a measure of potential ability, but also an evaluation of present ability and tourism performance.
By this study, it is expected that a measurement to compare strengths and weaknesses in the tourism industry of every country will be developed, and that mutual cooperation among nations will be promoted to develop national, overall competitiveness in international tourism. This means that international cooperation should be strengthened through development of evaluation indicators of competitiveness. In the international tourism market every nation finds a way to strengthen international competitiveness through common efforts. Strategic cooperation among tourism industries, expansion and utilization of investment for a high value-added tourism industry, construction of tourism information system, and international cooperation among businesses for specialization of high-quality tourism can be suggested. For example, countries holding a dominant position in a field will increase attractiveness in the overall international tourist destination, and create much stronger potential power, as supporting other countries, and constructing cooperation system with their neighbour countries.
On the other hand, policies for positioning and raising the existing tourism industry, strategically supporting and improving, and developing a new category of tourism business can also be suggested. According to the above, the following program of five stages for strengthening the competitiveness of every country in the international tourism community was deduced. In the first stage, changes in the international market are identified, and the position taken by each country. The second stage is to analyze the reasons for those positions to find key points to strengthen competitiveness. In the third stage, every country sets up its vision to demonstrate its potential power to the highest level, and to establish the purpose for objective measurement and scientific proof. In the fourth stage, every country recognizes the level of competitiveness and the reason why a gap of competitiveness exists. It is essential to construct an international cooperation system for choosing effective system and policy to bring about the highest continual benefit. The fifth stage is to suggest a substitute plan and establish an action program. -
Issues of the WTO New Round and APEC's Role
Established in 1989 as the first broad regional institution for intergovernmental dialogue on economic policy issues?in the Asia-Pacific region, APEC has emerged as one of the most powerful regional groups in the world economy, as..
Date 2000.12.30
Economic cooperation, Multilateral negotiationsDownloadContentSummaryEstablished in 1989 as the first broad regional institution for intergovernmental dialogue on economic policy issues?in the Asia-Pacific region, APEC has emerged as one of the most powerful regional groups in the world economy, assuming more than 50% of world GDP and trade volume, respectively. Over the last 11 years of its existence, APEC activities achieved a remarkable progress: the number of its members nearly doubled, the level of intergovernmental cooperation has been substantially upgraded, and since 1997 APEC has entered the stage of implementation. Also, cooperation areas of APEC have been widened continuously and the degree of cooperation deepened successively. Even though APEC attained a relatively influential position in the world economy, its importance within the world trading system remains controversial, both internally and in its external relations. APEC at the moment stands at a crossroad, and runs the risk of being marginalized not only in the world trading system, but also in the Asia-Pacific region. Not to be labeled as a qozere talk shop? APEC has to tackle both internal and external challenges. Internally, the solidarity among all member economies needs to be strengthened, which means APEC has to redesign and solidify its long-term vision, and systemize the cooperation agenda. Moreover, in its outreach to non-members, and especially in its relationship to the multilateral trading system, APEC has to find out how it can contribute to the strengthening of the multilateral trading system. In this context, it is imperative that APEC elaborates how it can assist the launch and successful operation of a WTO new round. This paper elaborated on possible contributions of APEC to a WTO new round, concentrating on three issue areas ?launching, liberalization and rules making. Main conclusions of the paper are as follows.First, the paper argues that APEC can exercise a strong influence on the shaping of a new multilateral trading system. Second, as regards the launching of a WTO new round, the paper recommends APEC to vigorously pursue the earliest possible launch of a new round, and suggests APEC establish a position that favors a comprehensive approach and a single-undertaking-approach, while paying special attention to ensure a balance of interests and concerns of its members. Third, the paper identifies a unilateral implementation of the ATL package by APEC member economies as the best policy option to deliver substantial contributions to the new round. Fourth, the paper argues that the composition of APEC, which has diversity in economic development stages with heterogeneous industrial structures, offers a chance for APEC-internal agreements to spill over to the multilateral trading system. It points out that agricultural liberalization and reform of WTO anti-dumping rules are good candidates for this approach. Fifth, the paper also regards the recent APEC initiative to set moratorium on the imposition of customs tariffs for e-commerce related product categories as a model case for the APEC process to have positive impact on the multilateral WTO process. Sixth, the paper recommends APEC to unify different APEC-intern rules of origin or at least harmonize them, and deliver those rules to the WTO, thereby to partly compensate for the negative impacts stemming from the proliferation of sub-regionalism within APEC. Lastly but most importantly, the paper argues that a strong US leadership both within APEC and in the WTO is needed to capture the opportunities for APEC and the WTO to mutually support each other. -
Investment Strategy of Japanese Business in Africa and Policy Implications
Since the mid-1980s, African countries have implemented policies which according to the World Bank are necessary for the positive contribution of foreign investment to the economic development of these economies. Typically within ..
Won-Yong Shin Date 2000.12.30
Overseas direct investmentDownloadContentSummarySince the mid-1980s, African countries have implemented policies which according to the World Bank are necessary for the positive contribution of foreign investment to the economic development of these economies. Typically within the framework of structural adjustment programmes they now permit full profit repatriation and have removed foreign exchange controls which were seen as obstacles to this. They provide tax and other incentives and have removed all the obstacles in the way of total foreign ownership of economic concerns in their territory and have in fact intensively privatized their state-owned enterprises to aid the processes. They have simplified their investment approval process and have established investment promotion institutions and now make intensive use of their representatives abroad to promote investment opportunities.
As a result, Africa is witnessing an upsurge in the level of foreign direct investments according to the 2000 World Investment Report. Foreign direct investment flows to Africa rose 25 percent from $8 billion to $10 billion in 1999, reflecting the faster growth rate being recorded on the continent, the Geneva-based UN Conference on Trade and Development (UNCTAD) said.
Since the 1980s, Japan has emerged as one of the most important investors in Africa, exerting influence on the states and peoples of the continent. Japan's presence is larger and more significant than generally believed and is certain to grow in importance.
Despite the Japanese strong presence in African markets with potentiality, the implications have not been greeted with much interest or given much attention in Korea itself. This attitude has become deeply entrenched. As a result, a large gap between perceptions and reality exists.
This paper is an attempt partly to fill this intellectual void. To review how Japan has invested, acted (or failed) and designed strategies will previde our policy-makers and businesses necessary and beneficial guidance. -
An Analysis of CO₂Emission Structures of the APEC Economies: Implications for Mitigation Policies and Regional Cooperation
We examined historical contributions of inter fuel substitution, changes in carbon efficiency and energy intensity, growth of economy and population to the APEC countries' CO₂emissions from 1980 to 1998 using a perfect decomposi..
Kihoon Lee et al. Date 2000.12.30
Environmental policyDownloadContentSummaryWe examined historical contributions of inter fuel substitution, changes in carbon efficiency and energy intensity, growth of economy and population to the APEC countries' CO₂emissions from 1980 to 1998 using a perfect decomposition approach. We also investigated whether or not CO₂emissions in the member countries are increasing by using new criteria suggested by Sun (2000). By adopting log mean Divisia method, we explained the causes of the differences of both the total and per capita CO₂emissions between the income groups of APEC countries.
The study reveals that economic growth (i.e. per capita income growth) is the most significant factor to CO₂emissions growth in most countries other than Russia, Peru, and Philippines. Population growth is another important factor that contributes CO₂emissions growth in all countries but Russia.
Changes in the energy intensity, fuel substitution, and carbon coefficient may be classified as negative contributors to CO₂emissions growth. Especially, enhanced energy intensity played dominant role in halting CO₂emissions growth in developed countries. In some less-developed countries, however, this factor played reversed role.
If the effect of per capita income growth was set aside, many countries achieved negative growth rate of CO₂emissions. Advanced countries like USA, Japan and Canada achieved more than 1% average annual decrease rate. This emission decrease is explained by improvement of energy efficiency. In most developing countries, however, they could not improve energy efficiency except China, which recorded considerable success in enhancing energy intensity.
In the income group comparison, per capita income effect explains the higher emission level in advanced countries than in the developing countries. Meanwhile other factors contributed to narrow the emission gaps between the groups. Above all, the higher energy efficiency in advanced economies is the most outstanding factor to decrease the gaps.
Based on these findings, we may draw implications on policy options for CO₂emissions mitigations and find ways to strengthen environmental co-operations among APEC member economies. Developing countries need to accelerate substitutions of fossil fuels to CO₂free or less CO₂intensive fuels, to enhance carbon emissions efficiency, and to improve energy efficiency. Improving energy efficiency through various measures will yield desirable results. Controlling population growth in low income countries is also an essential factor in checking rapid CO₂emissions growth.
In achieving emissions mitigation in developing countries, environmental cooperation among APEC member countries is essential. Developed countries need to transfer adequate technology and to finance to less-developed countries in enhancing clean and sustainable energy and economic development. To this purpose, APEC countries need to actively utilize the Kyoto Mechanism, which is Joint Implementation (JI), Clean Development Mechanism (CDM), and International Emissions Trading (IMT). The Prototype Carbon Fund to be operated by the World Bank may be a good source to expand such investment to the developing countries.
Among APEC economies, we find there exist big carbon credit suppliers and buyers. Most developing countries including China, Malaysia, Indonesia, Viet Nam, Peru, and Thailand are found to have very large potential to provide carbon credits. While USA, Japan, and Canada have to buy carbon credits to meet their commitments to the Kyoto Protocol. In that sense, activating intra-regional trading of carbon credits in the International Emissions Trading Regime proposed by the Kyoto Protocol is recommended. It may be conceivable to form an environmental bubble like the Umbrella Group that includes USA, Japan, Russia, Canada, Australia, New Zealand, etc. -
Digital Divide in the APEC: Myth, Realities and A Way Forward
There is a growing concern about the 'Digital Divide' at the APEC. Many are fearful that Digital Divide would worsen the existing gap among the member economies. While many policy prescriptions are suggested and implemented, the..
Byung-il Choi Date 2000.12.30
Technical cooperationDownloadContentSummaryThere is a growing concern about the 'Digital Divide' at the APEC. Many are fearful that Digital Divide would worsen the existing gap among the member economies. While many policy prescriptions are suggested and implemented, there is no academic attempt question the validity of the logic of Digital Divide. This paper offers a preliminary attempt to the question from an evolutionary and long-term perspective. Drawing on the time series data on the penetration ratio of fixed and mobile telecommunications lines from the APEC members, it is found that, whereas the current disparities are substantial, disparities in access to information infrastructure have been steadily decreasing and disparities are more rapidly bring declining in fixed network.
The paper concludes that there exist neither firm bases nor compelling evidences which point out the deepening of the Digital Divide over time. -
The Assessment and Implication of OECD Recommendations on Korea's Environment
A total of 60 environment-related rules exists in OECD as Decisions and Recommendations, out of which Korea agreed to observe 12 rules conditionally and the others unconditionally in December, 1995. In the area of chemical product..
Chang-In Yoon Date 2000.12.30
Environmental policyDownloadContentSummaryA total of 60 environment-related rules exists in OECD as Decisions and Recommendations, out of which Korea agreed to observe 12 rules conditionally and the others unconditionally in December, 1995.
In the area of chemical products, Korea has submitted an annual report to the OECD's Environment Protection Committee describing the status of implementation as required by the rules. After the accession to the OECD, Korea has legislated and modified related domestic laws to observe its commitment to the OECD. For example, self-confirmation system and a protection device to safeguard business secrets were introduced in 1999. Korea will, hopefully, submit its final report in the first half of 2001 confirming Korea has successfully implemented those OECD rules related to chemical products.
In the area of waste management, Korea modified the rules related to the movement of waste among nations, and in 1999 fulfilled the compulsory requirement to write an international waste classification code. Those measures on testing hazardous natures will be enacted after the Environment Protection Committee has integrated the waste management rules with the Basle Convention. There are no problems in the observance of 48 unconditional rules, which are Recommendations rather than Decisions. Korea's Ministry of Environment has modified so far those domestic rules and laws which had some problems at the time of accession.
Korea's efforts to implement those OECD rules contributed to the advancement of Korea's environmental policy, and rearrangement of its environment-related structures and systems. Especially, Korea's chemical product and waste management system has been up-graded to the levels of the OECD countries as a result of its endeavors to keep up with the OECD's Recommendations and Decisions.
Korea is acting vigorously to solve its environmental problems neglected in the early years of its economic development. Almost all of the environmental legislation now in use has been adopted or updated over the last 10 years. Now, the enforcement of these rules should be emphasized and local governments are expected to increase their roles thoroughly in implementing these environmental policies. -
The China's Opening Schedule and the Impact on Industries After Joining WTO
The China's Opening Schedule and the Impact on Industries After Joining WTOPyoung seob YangAlready 15years have passed since China has been pursuing to enter into General Agreement on Tariffs & Trade (GATT). In the preliminary..
Pyoun Seob Yang Date 2000.12.30
Economic opening, Industrial policyDownloadContentSummaryThe China's Opening Schedule and the Impact on Industries After Joining WTO
Pyoung seob Yang
Already 15years have passed since China has been pursuing to enter into General Agreement on Tariffs & Trade (GATT). In the preliminary stages of becoming a member of World Trade Organization (WTO), China is yet subject to ratification by the National People's Congress but it appears that in 2001, joining WTO will be possible.
Under these given conditions, this book is aimed at providing a light on the opportunities and the threatening factors in doing business with China by analyzing the effects of trade and investment conditions with China and the effects on the China Industry after China's initial joining of WTO.
After joining WTO, China's economic structure will greatly change as the new reforms and open policies take into effect and move the economy next level up. The joining of WTO will reform China's domestic systems and policies and conform them to an international standard thus show expansion of China's market economy and rapid growth. Clarity of China's trade policies and foreign investment policies will elevate. Furthermore, as large-scale development strategies for the western regions are sought after regional imbalance will gradually be abridged.
After joining WTO, Industry structure of China will change as China's economy opens its markets. On joining WTO, China will lower tariffs and increase non-tariff items thus enabling foreign corporations and their goods and services to be viable in China. Furthermore, restrictions on the advancement of foreign goods and services to China in the section of finance, communications, commerce, distribution industry and the service industry will be lowered.
Joining of WTO will have a positive effect on the labor-intensive industry but will have an adverse effect on capital and tech-intensive industry. Textile industry and clothes industry will benefit most by the joining of WTO. In the case of automotive and communication industry, foreign companies will take over the market. Furthermore it is expected that rapid growth will be achieved in finance and service industry due to the increase of foreign investment.
China's joining of WTO can be regarded as a great opportunity and threat to us simultaneously. It will make China's market more accessible to us and at the same time we will be in fierce competition with other foreign companies. In considering the above, the Korean government needs to redirect trade policies and corporations should devise mid and long-term strategies in penetrating the Chinese market. (*) -
Mexico's Financial Reform and Its Suggestion
Mexico's Financial Reform and Its SuggestionSeon-Deog, JangSystemic banking crises reflect not only macroeconomic imbalances of a country, but also structural weaknesses in the incentive framework of the financial sector itself, s..
Seon Deong Jang Date 2000.12.30
Financial policyDownloadContentSummaryMexico's Financial Reform and Its SuggestionSeon-Deog, Jang
Systemic banking crises reflect not only macroeconomic imbalances of a country, but also structural weaknesses in the incentive framework of the financial sector itself, such as inefficient management, poor market discipline, poor prudential regulation and supervision, weak bankruptcy laws, ineffective judicial systems, lack of transparency and disclosure of information, weak corporate governance and a poor credit culture.
Given the large magnitude and multiple causes of a banking crisis, the resolution of a crisis is a complex process. Mexico has adopted a 'gradualist' approach with slow progress in almost all stages of crisis resolution. To a large extent, the Mexican strategy has been determined by the inability (or reluctance) of their authorities to rapidly recognize the magnitude of banks' problems at the early stages of the crisis. Unsurprisingly, the measures and programs implemented to resolve the crisis have provided temporary relief to banking institutions, but they have failed to rapidly address the causes of the banks' problems and restore the soundness and profitability of banking institutions. Based on the analysis carried out in this paper, there are some suggestions that can be drawn from the management and resolution of the Mexican banking crisis. Firstly, a centralized crisis management unit, with extraordinary power and adequate budgetary and human resources, a clear mandate to resolve a banking crisis, is essential for the successful management and resolution of a banking crisis. Secondly, to a large extent, the resolution of a banking crisis is a managerial problem. The resolution of a crisis will depend on the ability of a government to deliver rapid and sequenced responses, remove legal and administrative obstacles, create consensus around a strategy, implement unpopular measures, coordinate involved agencies, and resist opposition from affected interest groups. Thirdly, failure or reluctance to rapidly and realistically recognize the magnitude of banks' losses at the early stages of a crisis will likely lead to the prescription of insufficient or ineffective measures, which may provide short-term relief, but fail to address the underlying causes of the crisis. Fourthly, in order to maximize impartiality of government's decisions, explicit criteria should be established to judge and determine the viability of a financial institution, using the same criteria and procedures to the largest number of banks. Fifthly, an overall strategy that links all policies and programs towards the accomplishment of a coherent set of goals is crucial for the successful resolution of a banking crisis. Finally, one large injection of public funds may be more effective than gradual (several times) doses. Repeated use of fiscal resources to recapitalize banks, purchase non-performing loans and support debt restructuring might be counterproductive if banks and debtors perceive that the government will likely continue to assume banks' losses. -
A Study on the System Transformation and Capitalist Development in Russia -The Prospects of Putin's Neo-Statism-
A Study on the System Transformation and Capitalist Development inRussia - The Prospects of Putin's Neo-Statism Jehoon ParkThe study evaluates the system transformation and capitalist development in Russia and analyzes prospects o..
Jehoon Park Date 2000.12.30
Economic reformDownloadContentSummaryA Study on the System Transformation and Capitalist Development inRussia - The Prospects of Putin's Neo-Statism
Jehoon Park
The study evaluates the system transformation and capitalist development in Russia and analyzes prospects of President Putin's neo-statism based on the methodology of political economics for the purpose of reevaluating our policies toward Russia.
Russia faced a tough additional task of nation-building in addition to the tasks of system transformation i.e., political democratization and transition to a market economy, which is contrasting to the cases of other transition economies. A political progress was the adoption of the new constitution in 1993. Economically Russia became a capitalist state where non-state ownership prevails by means of completion of voucher privatization since 1994. Macro-economically exchange rates and price levels became stabilized since 1995 and Russia started to escape from the long trap of minus growth rates in 1997.
However, the moratorium of August, 1998 conversed the optimistic prospects of Russian economy at a blow. The crisis could be attributed to a number of causes. The most significant one was the system failures which include a non-working of newly established system and contradictions of the Russian-type crony or gangster capitalism. From this perspective, it could be said that the transition to a market economy or the system transformation in Russia has not been completed, at the same time Russian capitalism is in the stage of so-called primitive accumulation.
Putin's economic policy will be the centrist one between Chernomyrdin and Chubais and more reformist than Primakov. The tasks facing Putin are completion of system transformation and modification of contradictions in Russian-type capitalism. The last resort for Putin could be the revival of a state, which means creation of a solid federalism based on the rule of law and democracy.
The future of Putin's Russia depends on whether a Russian-type competitive capitalism could be established reflecting the tradition of a strong state, the characteristics of big-country and historical experiences
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