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Major economic reforms are often politically difficult.  They may cause pain to voters and provoke unrest.  They may be opposed by politicians whose time horizons are shortened by electoral cycles.  They may collide with the established ideology and long-standing practices of an entrenched ruling party.  They may be resisted by bureaucrats who fear change, and by vested interests with stakes in the status quo.  Obstacles to major economic reform can be daunting in democratic and autocratic polities alike. 

And yet, somehow, past leaders of today's Asian dragons did manage to get away with critical and creative economic reforms.  Sly political foxes nudged their countries onto high-growth paths toward global renown as economic dragons.  What lessons can be learned from their experiences?  Are tactics that worked in authoritarian systems applicable to democratic ones, and vice versa?  Can one identify a set of stratagems that would amount to an equivalent, for economic reformers, of the advice Machiavelli gave political princes? 

Arroyo will recount the crafty political maneuvers used by leaders of economic reform in Asia during these pivotal eras:  China under Deng Xiaoping; India in the 1990s; Thailand under General Prem Tinsulanonda; Vietnam's Doi Moi; South Korea under Park Chung Hee; Malaysia under Mahathir Mohamad; and Singapore under Lee Kuan Yew.  Arroyo's remarks will be drawn from the paper he has been writing at Stanford on "The Political Economy of Successful Reform: Asian Stratagems," which he describes as "a playbook of useful maneuvers for economic reformers."

Dennis Arroyo is presently on leave from his government post as a director of the National Economic and Development Authority (NEDA) of the Philippines.  He has held consultancies with the World Bank, the United Nations, and the survey research firm Social Weather Stations, and has written widely on socioeconomic topics.  His critique of the Philippine development plan won a mass media award for "best analysis."  He has degrees in economics from the University of the Philippines.  

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Shorenstein APARC/Asia Foundation Visiting Fellow
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Dennis Arroyo is a corporate affiliate visiting fellow at Shorenstein APARC for 2007-08. Prior to joining Shorenstein APARC, he worked as the Director of National Planning and Policy Staff at the National Economic and Development Authority in the Philippines. Arroyo also formerly worked as a consultant for the World Bank in Washington DC and the World Bank office in Manila. Arroyo has spent much of his career in survey research with Social Weather Stations (SWS), which is a prominent organization in the World Association for Public Opinion Research (WAPOR).

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Dennis Arroyo 2007-2008 Shorenstein APARC/Asia Foundation Visiting Fellow Speaker Shorenstein APARC
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In the past decade, academia has experienced a remarkable revival of interest in India. This is largely based on the perception of India emerging as a significant global economic power.

However, there is a non-economic reason as well. The sons and daughters of America's highly educated and prosperous Indian-American community drive this second reason. These students are eager to learn about the culture, religion, literature, and the languages of their parents' and grandparents' homeland.

Goldman will discuss these interesting trends in an effort to contextualize the state of Indian Studies in American higher education today.

Professor Goldman is professor of Sanskrit at UC-Berkeley. His areas of scholarly interest include Sanskrit literature and literary theory, Indian epic studies, and psychoanalytically oriented cultural studies. Goldman's work has been recognized widely, having been awarded several fellowships and research awards. He is also a fellow of the American Academy of Arts and Sciences.

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Robert P. Goldman Professor of Sanskrit Speaker University of California-Berkeley
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We are pleased to bring you the third article of the academic year in our series of Shorenstein APARC Dispatches. This month's piece comes from Dr. Phillip Lipscy, FSI Center Fellow and Assistant Professor, Political Science. Lipscy joined Shorenstein APARC in fall 2007 and his research interests focus on international relations and political economy, particularly as they relate to Japan and East Asia. He has been a Shorenstein APARC affiliate since his undergraduate years, when he studied under Professor Emeritus Danial Okimoto. He attended Harvard University for his doctoral studies.

Since the end of World War II, East Asia has often been characterized as a region with weak international organizations. There has been no regional integration project comparable to the European Union (EU). Cooperation on a wide variety of issues has tended to be ad hoc rather than institutionalized. Regional organizations, such as the Association of Southeast Asian Nations (ASEAN), have generally been weak or limited in scope, with some notable exceptions such as the Asian Development Bank.

However, in recent years, there are indications that the pattern of institutionalization in Asia is shifting. Since the end of the Cold War, regional cooperative arrangements have emerged and grown. With the addition of China, Japan, and South Korea, a revitalized ASEAN+3 is becoming a locus of economic cooperation. Many observers believe the Six Party Talks could be institutionalized to manage a broader set of security issues beyond North Korea. The Chiang Mai Initiative, a multilateral currency swap arrangement, might eventually develop into a monetary fund. Bilateral trade agreements are proliferating and could ultimately produce a regional free trade zone.

Under the right circumstances, regionalism can complement the broader global order. However, to a significant extent, recent regional initiatives reflect an underlying dissatisfaction with the global institutional architecture. The Chiang Mai Initiative emerged after the Asian financial crisis, from a widespread sense that the International Monetary Fund (IMF) underrepresented Asian interests and therefore imposed overly harsh conditionality on the affected states. Paralysis at the Doha Round negotiations of the World Trade Organization (WTO) has facilitated the rapid expansion of bilateral trade initiatives. The North Korean nuclear problem is precisely the sort of collective security issue the United Nations (UN) Security Council was envisioned to deal with, but the rigidity of both Security Council membership and its decision-making procedures has rendered this impractical.

Historically, international organizations have often exhibited path dependence, or a resistance to change. For example, the permanent members of the UN Security Council still remain the victorious powers of World War II. The distribution of voting shares in the IMF and World Bank has consistently overrepresented inception members such as Canada, France, and the United Kingdom, at the expense of both the defeated powers of World War II and newly independent and developing states. The Organization for Economic Cooperation and Development (OECD) remains a predominantly European institution despite the rapid growth of Asia. Across a wide range of international organizations, Asian nationals continue to be underrepresented among employees, and in some cases leading positions are allocated to Western nationals by convention, as in the IMF and World Bank.

However, as Asia continues its rapid growth, the active involvement of Asian states in the global order will become paramount. Including India, broader East Asia encompasses more than half of the world's population. The region already accounts for about one-third of global oil consumption and CO2 emissions, and this is only likely to grow in the future. By 2020, in purchasing power parity terms, regional GDP will likely exceed that of the United States and the EU combined. Over the course of the twenty-first century, Asia's economic and geopolitical weight in the world will, in all likelihood, come to rival that of Europe in the nineteenth century. With Asia's dramatic rise, Asian problems will become increasingly indistinguishable from global problems.

Thus, a critical question in the coming decades will be whether the contemporary international organizational architecture will be able to smoothly incorporate the rising states of broader East Asia. Sweeping geopolitical shifts have often created instability in the international system -- the waning of Pax Britannica in the early twentieth century precipitated two world wars and a global depression, as the world lacked a geopolitical and economic stabilizing force in times of crisis. If universalistic institutions such as the UN, IMF, and WTO are seen as unresponsive to Asian concerns, two potentially destabilizing outcomes are likely. First, Asian regional cooperation may further intensify. For example, a full-fledged Asian Monetary Fund that acts independently of the IMF could be formed, or an Asian Free Trade Area established. Such institutions have the potential to undermine existing international organizations such as the IMF and WTO. Eventually, Asian institutions may supersede existing global institutions, but only after contestation and needless replication. A second destabilizing outcome could be that Asian states disengage from the U.S.-backed international order without developing strong regional institutions. This might create a situation akin to U.S. nonparticipation in the League of Nations in the interwar years. Without active involvement of some of the most important players, international organizations will become less effective at facilitating cooperation and resolving major disputes. International relations will become more anarchic and cooperation more ad hoc.

The rise of Asia will likely provide the first major stress test for the global organizational architecture that the United States has constructed and underpinned since the end of World War II. Of course, there are also some grounds for optimism. Among other things, China and Vietnam have joined the WTO, ongoing IMF quota revisions have produced ad hoc increases to South Korea and China, and Asian nationals increasingly play important roles in major international organizations -- e.g. UN Secretary General Ban Ki-moon and former UN High Commissioner for Refugees Sadako Ogata. It is paramount that concerns about Asian representation and interests in universalistic international organizations be addressed so that the rise of Asia contributes to -- rather than undermines -- the stability of the international order.

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On December 7 and 8, 2007, the Third Annual Globalization of Services Conference organized by Rafiq Dossani and Martin Kenney was held at Stanford University. The conference explored the following questions:

  1. The changing geography of system integrators: The incumbent system integrators (SIs) are building up their developing nation service provision capability through acquisitions and internal expansion. The thrust of their expansion is to add capacity quickly. Can they manage it effectively? At a slower pace, the Indian SIs are doing the same in developed and developing nations: adding low cost workforces in developing countries, buying relationships in developed countries. Can they manage it effectively. Will growth rates and margins converge; if not, why not? What are some of the interesting differences between firm strategies?

  2. The changing business models of system integrators: The Indian system integrators appear to be driving a new, metric-based quality model that is driving price compression. Is this strong enough to provide a permanent advantage? IBM and others are responding with a combination of superior technology, client relationships and domain expertise, drawing upon their established strengths while also expanding in India and other low-cost developing countries. Are we witnessing a convergence to a common business model? Is there a European perspective? Is it different and does it make a difference?

  3. Product firms' globalization strategies (separate sessions on established and new firms): The IT product firms have to balance several additional factors that service firms like the SIs do not face when they globalize; among them, intellectual property protection, business development, managing innovation, research team coordination and marketing. How is this working, and what business models are they experimenting with? What are the differences between an established firm versus a startup?
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John Thomas "Tom" Schieffer was sworn in as the 27th U.S. Ambassador to Japan on April 1, 2005, and presented his credentials to the Emperor on April 11, 2005. Since arriving in Japan, he has worked to strengthen the U.S.-Japan alliance, increase trade, and facilitate the realignment of U.S. forces stationed in Japan, among other issues.

Before being appointed Ambassador to Japan, Schieffer served as the U.S. Ambassador to Australia from July 2001 until February 2005. During his tenure in Canberra, he coordinated closely with the government of Australia on efforts to fight global terrorism and helped to deepen cooperation on rebuilding efforts in Afghanistan and Iraq. He was also heavily involved in the conclusion of a free trade agreement between the U.S. and Australia in May 2004.

Prior to his diplomatic service, Ambassador Schieffer was an investor in the partnership that bought the Texas Rangers Baseball Club in 1989, with George W. Bush and Edward W. "Rusty" Rose. He served as team president for eight years, was responsible for day-to-day operations of the club and overseeing the building of The Ballpark in Arlington, Texas. Ambassador Schieffer has also had a long involvement in Texas politics. He was elected to three terms in the Texas House of Representatives and has been active in many political campaigns.

The Ambassador attended the University of Texas, where he earned a B.A., and a M.A. in international relations, and studied law. He was admitted to the State Bar of Texas in 1979. He is married to Susanne Silber of San Antonio, Texas, and they have one son, Paul.

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John Thomas Schieffer United States Ambassador to Japan Speaker
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In 1990, India's information technology sector had only around $100 million in exports. Today, it has become a major force in IT. So how did India's arrival in information technology happen?

On November 27, on the release of his new book, India Arriving: How This Economic Powerhouse is Redefining Global Business, Rafiq Dossani presented a seminar for SPRIE entitled, "Is India a Knowledge Economy?"

India's success in IT has been variously attributed to its widespread knowledge of English, to Indian democracy, or to the Indian educational system. Dossani, using the IT sector as an illustration, posited that this transformation has been a result of political change in India, specifically the transition to a particular type of coalition government.

Dossani also detailed the evolution of how IT companies work in India--for example, how a shift to local managers became critical for success--and discussed the fascinating IT sector developments in cities like Indore, where constant power outages are only a minor obstacle to over fifty small firms exporting software, English language skills aren't a prerequisite for success and private schools are luring faculty away from universities.

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Volunteers from the University's Shorenstein Asia-Pacific Research Center (Shorenstein APARC) and Hands-on Bay Area came together last night for "Bring Me A Book" Volunteer Night. The event took place at the Bring Me A Book headquarters in nearby Mountain View, where the volunteers had dinner and learned about the organization.

Denise Masumoto, Shorenstein APARC's manager of corporate relations, headed the 20 volunteers from APARC, who are visiting fellows doing research at Stanford for a year and represent countries including China, India, Japan and the Philippines. Masumoto said APARC became affiliated with the Bring Me A Book Program when she found the program online and thought it represented an integral part of American lifestyle and culture. She also hoped that it could "encourage the visiting fellows to volunteer in other ways in their own countries."

"It is an honor to host the students of Stanford's Asia-Pacific Research Center," said Bring Me A Book volunteer coordinator and community outreach manager Montez Davis. "Since many of these volunteers have families, this is the perfect way for them to experience first hand the difference you can make in the future success of a child all through volunteer work."

Bring Me A Book began with Judy Koch's mission to provide easy access to the best childrens' books and to inspire reading aloud with children. The foundation aims to provide brand-new books of the best quality to children who do not have the means to obtain them otherwise.

"We believe that every child deserves books of the same quality," said Bring Me A Book office manager Erin Smith.

Bring Me A Book is affiliated with volunteer corporations such as CISCO, Google and Starbucks, as well as other non-profit organizations. Hands-on Bay Area is a non-profit organization that aims to make volunteer work easy and accessible, organizers said.

Davis hosted the event along with Donovan Cook '66, director of development for Bring Me A Book. The pair began by giving the volunteers a brief tour around the headquarters and updating the volunteers on their latest plans.

The organizers mentioned projects including the recent distribution of Karen Ehrhardt's This Jazz Man to Oakland Public Schools like the Martin Luther King, Jr. Elementary School and the recent openings of Bring Me A Book in places such as Hong Kong, Malawi, Mexico and the Philippines.

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