Suchergebnisse

Asian emerging market countries have followed growth convergence from a low-income, high-growth state to a middle-income, middle-growth state through industrialization. The economic development of Japan was first followed by the "four tigers" in the 1970s, by the ASEAN countries in the 1980s, and China in the 1990s to 2000s. Asian economies were severely affected by the Asian Currency Crisis of 1997-98, and again by the Global Financial Crisis of 2008-09, but much more so by the former. The growth rates of Asian countries are slowing over time. The growth rate may fall to the advanced countries level, before the income level fully catches up to the advanced countries' level, which is defined as the middle income trap in the paper. This paper proposes a hypothesis that there exist three convergence paths in Asia: low-income, middle-income, and high-income. Countries need to shift from one convergence path to a higher one by implementing economic and political reforms that would generate innovations. Without reform, countries may fall into a low-income trap or a middle-income trap. The findings in the paper have important implications for the literature about middle-income traps. Providing an interpretation of the middle-income trap in the growth convergence framework is novel. Empirical investigations using panel data are also new. Some Asian countries are successfully transforming to a high-income convergence path, but others have failed thus far to make that transition. However, these results are more in the form of suggestive evidence than a hypothesis testing due to the limited sample size.

China has proposed the Asian Infrastructure Investment Bank (AIIB), initiating a key turning point in the international finance system. Unfortunately, its design at present is quite problematic, for several reasons: it limits participation by Western countries, effectively locking in China as the undisputed leader; the lack of a Board of Directors in residence; the potential for a conflict of interest if the AIIB will fund projects within China; the potential of China to use AIIB for political purposes; the relationship the AIIB will have with already-existing international financial institutions; and the potential for a weakening of "best practices" in order to compete against the other international finance institutions. For these reasons, it was the right decision for Japan not to join as a charter member in order to negotiate the MOU; nevertheless, Japan should maintain the option of joining the AIIB in order to have leverage over the architecture of the AIIB.

Asian countries still have the IMF stigma, which originates from the experiences of the Asian crisis of 1997-98. The feeling of being unfairly treated grew even stronger afterward. The Asian countries built large foreign reserves, carried out structural reforms, and became even stronger than pre- crisis period. Asians are confident in not repeating the same mistake of falling into a crisis with too much external borrowing. Whether IMF can entice Asia to new precautionary liquidities facilities remains uncertain. Asia may choose either to focus on completing a regional safety net or to engage in IMF, demanding for a greater voice and votes.

The economic growth rate has been quite low during the 1990s. General prices and wages have been declining since the late 1990s, and deflation seems to have set in. Although the nominal interest rate has been zero for the last few years, that has failed to stimulate investment and consumption. Several fiscal stimulus packages—discretionary public expenditures and tax cuts—have been employed, but they too failed to stimulate private-sector investment and consumption. Due to deficit spending and declining tax revenues, the government debt-GDP ratio has risen from 60% in the beginning of the 1990s to 140% in 2002. According to the Moody's, the Japanese government bonds are now rated below the Botswana counterpart. With apparent ineffectiveness of monetary and fiscal policy, the Japanese economy is drifting downward. The size of the nominal GDP has shrunk by 5% between 1997 and 2003.

Monitoring the industry developments for maintaining competitive pressure is important, and assuring the access to facilities for new entrants to the market is important. It is a challenge for the regulatory agencies to consider what kind of competition policy should guide the regulatory policies of the airline services in Japan. In addition, there is a possible conflict between the Ministry and FTCJ over regulatory issues of pricing and routing. This paper will be organized as follows. Section 2 describes some of the recent cases involving competition policy in the Japanese airline industry and section 3 points out challenges in the competition policy in the future.