Bruno Jetin

ASEAN Economic Community A Model for Asia-wide Regional Integration?

ASEAN Economic Community: A Model for Asia-wide Regional Integration? Edited by Bruno Jetin and Mia Mikic. Basingstoke: Palgrave Macmillan, 2016, Pp. 350. This edited book focuses on the ASEAN Economic Community (AEC). It is written and published in the same year as the AEC has been created. In the light of this event, the authors describe: ASEANs current state; how the region has changed since the associations establishment in 1967; and also examines ASEANs future challenges. This book is an interesting read for policymakers, economists and anyone interested in ASEAN and the AEC. The AEC has four pillars to transform ASEAN into an economic community: (i) a single market and production base; (ii) a competitive economic region; (iii) equitable economic development; and (iv) integration into the global economy. The book concentrates on pillars one, three and four, with a focus on trade and social inequalities. The book is divided into three parts. The editors give most weight to the first part on ASEAN Economic Integration in the context of East Asian regionalism (Chapters 1 to 7). The second and third parts deal with the impact of regional integration on structural change, employment, poverty, and inequalities (Chapters 8 to 15). Following a quick introduction on the books structure and topics, Chapter 1, written by David Martin Jones, directly addresses the original purpose of ASEAN: a regional security arrangement with a non-interference policy. The Association, however, is focusing its attention on further economic integration within the region through the AEC, and beyond, through the Regional Comprehensive Economic Partnership (RCEP). Contrary to the official ASEAN view, the author doubts if further significant integration between these nations, whether in politics or economics, is possible due to the practice of non-interference and non-binding consensus. Jean-Raphael Chaponniere and Marc Lautier discuss ASEANs history within Southeast Asia in Chapter 2. Mia Mikic (Chapter 3) examines the Associations next steps within the region with the development of RCEP, and globally, with the U.S.-led Trans-Pacific-Partnership Agreement and the China-led Free Trade Area of the Asia Pacific. The conclusion is that regional cooperation is mainly foreign-driven and that deeper integration, for example the ASEAN Free Trade Area, was a reaction to other integrated markets around the world. ASEANs main economic achievement has been the removal of tariffs; while on a global perspective, the core ASEAN states successfully integrated themselves into the global value chain in automobiles and electronics manufacturing. Yann Duval and Emilie Feyler (Chapter 7) contrast different trade costs between major (free) trade areas, while Prema-chandra Athukorala (Chapter 4) analyses global production sharing and trade patterns within and between Southeast and Northeast Asian states. Concerning tariffs, the authors find that even though ASEAN member states have a comprehensive tariff reduction agreement, their trade costs, other than pure tariffs, remain very high amongst themselves and are comparatively higher than the same trade costs between China, Japan and South Korea--which have no common free trade agreement in operation. Athukorala highlights the importance of global production networks for ASEAN countries. The core ASEAN member states have been participating in global production sharing since the associations inception and have deepened their participation due to Chinas rise as a main player in the global production network. ASEAN nations profit from Chinas participation in the global value chain by restructuring their operations from low- to high-value manufacturing and services tasks. Chapters 5 and 6, by Nabil Aflouk, Jacques Mazier and Myoung Keun On, and Witada Anukoonwattaka, respectively, explore the exchange rate on ASEAN Economic Integration and the global value chain. In the former case, the authors use economic models to assess exchange rate misalignments between East Asian nations and to determine the most beneficial East Asian exchange rate regime. …

Strategies of Internationalisation of Automobile Firms in the New Century: a New Leap Forward?

The automobile industry presents a paradoxical situation. It has a century-old tradition of internationalisation. Together with electronics/electrical equipment and petroleum exploration and distribution, it dominates the list of the top 100 largest transnational corporations ranked by their foreign assets established by UNCTAD, with twelve automobile firms in 1990, and still eleven firms in 2005. But despite this strong presence, these automobile firms were initially much less internationalised than the average.

Reduction of Absolute Poverty, Increase of Relative Poverty, and Growing Inequalities: A Threat to Social Cohesion

The Association of Southeast Nations (ASEAN) community is committed to poverty reduction and the well-being of its people thanks to inclusive growth and equitable access to opportunity of human development.1 These principles are delineated in the three pillars of ASEAN cooperation, namely, the ASEAN political and security community, the ASEAN economic community, and the ASEAN sociocultural community, which are supposed to be mutually reinforcing. For instance, the improvement of well-being strengthens political stability, which is an important objective for the many “democracies with adjectives” (Collier and Levitsky, 1997) that count on Southeast Asia.

Functional income distribution and growth in Thailand: A post Keynesian econometric analysis

ABSTRACT The aim of this article is to analyze the effect of the income distribution between labor and capital on the growth performance of Thailand from a post Keynesian view. It rests on the theoretical model of Bhaduri and Marglin (1990) to see if an increase in the labor income share has a sufficient positive effect on consumption to offset a negative effect on investment and export demand. In order to investigate the question empirically we adopt and develop the approach of Stockhammer, Onaran, and Ederer (2009). Several measures of the labor income share are calculated to take into account the fact that wage labor represents only half of the total labor force and check the robustness of our results. We also introduce a new treatment of external trade to better integrate the price competitiveness of Thailand. The econometric investigation shows that the growth regime is profit-led over the period 1970–2011, which shows that rebalancing the Thai economy will be difficult and requires an overall change of strategy going beyond a simple prolabor policy.

‘One Belt-One Road Initiative’ and ASEAN Connectivity: Synergy Issues and Potentialities

The “One Belt-One Road” (OBOR) strategy was launched in September 2013 by President Xi Jinping in Kazakhstan as regards the mainland area and in October 2013 in Indonesia as regards the maritime area. This is by far the largest project of interconnection between Asia, Europe, and Africa that will last for decades, entail vast amounts of resources, and involve a large multilateral collaboration. This Chinese initiative is potentially good news for ASEAN which has huge infrastructure-investment needs to implement its Master Plan for Connectivity (AMPC). But this will depend on the capacity of ASEAN to maintain its centrality and speak with one voice to China when investment decisions will be taken. Otherwise, the risk is that the OBOR strategy may deepen existing divides between mainland and maritime ASEAN, while the purpose of the AMPC is precisely to alleviate them. This paper will analyze these issues and explore the solutions to achieve a synergy between China’s OBOR and AMPC.

Demand for Cars in Russia: Before and after the 2008–2009 Crisis

Over the last 20 years, the Russian car market has been developing actively. Its evolution reflects radical changes in the national economy. After an initial period of decline due to intensive restructuring,1 the Russian economy enjoyed a prolonged solid 5.7% annual growth rate (1998–2008), which was halted by the international crisis of 2009 when Russia was stricken by a severe but brief recession (-7.8%). The post-recovery growth is much slower (3.5% during the period 2010–2013) and fragile but is still well above the European level. In terms of living standards, the GDP per capita in Russia reached USD 14,000 in current terms in 2012 – 1.2 times higher than in Brazil, 2.3 times higher than in China, and 9.3 times higher than in India.2 This chapter covers the above period, which saw the development of a new Russian economy and a new structure of national consumer markets, focusing on the car market.3 This market is now sizeable, with USD 40–60 billion per annum for light-vehicles and around USD 30–40 billion per annum for parts and accessories. One major determinant of this booming automobile market is the growth of personal income in a context of increasing inequality, which led to the emergence of a new and rather representative middle class. Demand for cars by this new middle class made the Russian market one of the most dynamic in Europe.

The US Automobile Market after the “Great Recession”: Back to Business as Usual or Birth of a New Industry?

Between December 2007 and June 2009, the US economy was hit by the “Great Recession”, the worst economic crisis since the Great Depression of the 1930s. As a consequence, the US automobile industry has gone through a crisis of unrivalled magnitude: during the recession, light-vehicle sales lost 6 million units and two of the “Big Three” automakers — GM and Chrysler — went bankrupt. Since then, the US economy has recovered progressively and the automobile market is bouncing back to its pre-recession level. In fact, the automobile industry has better recovered than the rest of the economy, the growth of which is weak and uncertain. GM and Chrysler emerged from bankruptcy as new slimmeddown companies with fewer brands, plants and workers, and less debt and market share. The rejuvenated Big Three returned to profit in 2009 (Ford) or 2010 (GM and Chrysler) when the US market was still below 12 million vehicles sales a year. These companies are making bigger profits now that the market is expanding again and are on the way to reaching 16 million units in the near future. GM and Chrysler have repaid their loans and have gone public again, a move that has given the US government a way to sell part of its stake in the companies’ stock.

The Internationalization of American and Asian Automobile Firms: A Statistical Comparison with the European Companies

The internationalization of the automobile industry is a phenomenon that goes back a long way. Most automobile firms have tried to move into the international theatre within a few years of beginning operations, first through export activities and later by establishing overseas production facilities. However, internationalization has taken on a new dimension in the context of economic globalization. The reinforcement of free trade, new rights guaranteeing the mobility of productive and financial capital, and the intensification of competition in the firms’ original markets — all these factors have induced companies to try to use internationalization as a solution to the structural problems they face.