Today Trends

Author: Nazia Hussain, Nanyang Technological University After a two-year COVID-19 induced delay, the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) concluded its fifth summit on 30 March 2022. The grouping — comprising Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand — has gained renewed interest in recent years. Changing geopolitical realities make the strategic geography of the Bay of Bengal crucial to the wider concept of the Indo-Pacific. The summit saw the signing of the BIMSTEC Convention on Mutual Legal Assistance in Criminal Matters, a Memorandum of Association on the Establishment of BIMSTEC Technology Transfer Facility and a Memorandum of Understanding on Mutual Cooperation in the Field of Diplomatic Training. BIMSTEC also adopted the Master Plan for Transport Connectivity that offers a framework to enhance regional and domestic connectivity in the Bay of Bengal. The plan lists 264 projects requiring an investmen...

Authors: Juliette McIntyre and Adam Simpson, University of South Australia The International Court of Justice (ICJ) is dealing with two very different cases under the Genocide Convention — one against Myanmar and one against Russia. The way that the defendant states have responded to the cases reveals much about the strengths and limits of international justice mechanisms in addressing global atrocities. In the first case, filed in November 2019, The Gambia alleges that Myanmar is responsible for committing genocide against the Rohingya ethnic minority during ‘clearance operations’ in Rakhine State in 2017. During these operations, which resulted in the exodus of 740,000 mostly Rohingya refugees to Bangladesh, Myanmar’s military forces committed serious human rights violations including mass killings, torture and rape, and the destruction of homes and mosques. In December 2019, the ICJ heard arguments on whether to grant an interim order for provisional measures under Article 41 ...

Author: Kyle Ferrier, Korea Economic Institute of America Since the Asian Financial Crisis, South Korea has pursued a delicate balance between openness and stability in its domestic financial markets. While foreign investors have seen improved accessibility in certain areas, key safeguards limiting international capital flows remain in place. In January, South Korea’s Ministry of Economy and Finance announced it was considering reforms that would extend the trading hours of the South Korean won and allow international traders to participate in the market, constituting at least a partial reversal of the ban on offshore trading. The move is part of a campaign to signal the country’s interest in being recognised as a developed market by Morgan Stanley Capital International (MSCI). South Korea has been granted developed country status in all major international economic organisations and other financial indexes, but has consistently fallen short of MSCI’s high market accessibility crit...

Author: Citra Handayani Nasruddin, Jakarta Women in Indonesia are forced, at some point, to choose between career and family. As governments around the world seek to cushion the impacts of COVID-19, the role of taxation in empowering women and addressing gender disparity has been revisited . Tax and gender are on the agenda of Indonesia’s G20 presidency this year. But Indonesia’s current taxation system is prone to be biased against women, requiring meaningful changes to promote female labour force participation. Before the pandemic, Indonesia’s female workforce participation had remained around 50 per cent for the last 20 years, significantly below the 80 per cent participation of males. Participation declined from 55.5 per cent in 2019 to 50.72 per cent in 2020 when the pandemic hit. Closing this gender gap by 25 per cent by 2025 could generate Rp 406 trillion (US$27.7 billion) in tax revenue and add Rp 2.9 quadrillion (US$197.8 billion) to the economy. Getting married and havin...

Author: Cyn-Young Park, Asian Development Bank Crude oil breached US$130 per barrel in March 2022 — its highest level since 2008 — before retreating to US$100 per barrel in April. The factors behind the rise include protracted low investment in global oil production, a slide in the global inventory and a pick-up in demand related to economic recovery from the COVID-19 pandemic. But most significant was the Russian invasion of Ukraine, which increased supply uncertainty amid already tight market conditions.   The overall economic impact has been modest in Asia and the Pacific but the situation can change quickly subject to the magnitude and duration of oil price increases. Crude oil prices can overshoot, like many commodity and financial prices. By June 2008, for example, West Texas Intermediate had breached US$140, up from less than US$60 in 2007, only to plunge back to about US$40 by the end of 2008.  The oil price surpassed US$80 in November 2021, more than double the pr...

Author: Editorial Board, ANU No matter what their diplomatic stances over Russia’s invasion of Ukraine, the countries of the Asia Pacific have an urgent interest in seeing the conflict in Europe halted but that won’t see them signing on to the western agenda of economic sanctions and diplomatic censure of Russia. As Susan Thornton writes in our lead article this week , in Asia ‘the attitude towards Russia’s invasion and accompanying de-globalisation effects are viewed with more ambivalence by many’. The Western-led response to the war has had three main elements. First, directly boosting Ukraine’s resistance to invasion with arms and intelligence while remaining below the threshold of direct conflict with Russia. Second, diplomatic censure of the Russian government and attempts to exclude it from global multilateral forums. Third, a regime of sanctions designed to precipitate a financial crisis within Russia, the collapse of its economy, and limits to its ability to finance the wa...

Author: Susan Thornton, Yale University Russia’s invasion of Ukraine has produced disaster on many fronts, most immediately for the people of Ukraine. The conflict has jolted Europe from a reverie of extended relative peace between major powers. Russia’s blatant violation of international law and Western sanctions in response are accelerating the reversal of globalisation that began under former US president Donald Trump and continued during COVID-19. But compared to Western countries, the attitude towards Russia’s invasion and accompanying deglobalisation effects are viewed with more ambivalence many in Asia. Governments in the Asia Pacific remain wedded to their vision of regional integration and modernisation. Though many voted in the United Nations to condemn Russia’s territorial aggression, only a handful agreed to impose their own sanctions, while several have openly opposed the sanctions regime. Asian states are generally loath to alienate a major power, especially one tha...

Authors: Mengdi Yue and Christoph Nedopil, Fudan University As COVID-19 continues to interrupt economic activities, induce higher public spending and decrease tax revenues, sovereign debt issues in emerging countries are worsening. The World Bank has noted that the debt burden of low-income countries rose 12 per cent to a record US$860 billion in 2020. The International Monetary Fund (IMF) sounded alarm bells in December 2021, warning that 60 per cent of low-income countries are at high risk or already in debt distress, up from 30 per cent in 2015. Analysis from a Green Finance & Development Center report published in March 2022 shows that outstanding public external debt in most countries eligible for the DSSI has increased from 2019 to 2020. But some countries did decrease debt levels, such as the Republic of Congo and Mozambique. Outstanding public external debt owed to China by 68 Debt Service Suspense Initiative (DSSI) countries increased from US$105 billion in 2019 t...

Author: Nick Bisley, La Trobe University In 2022, there will be great interest in Asia’s summit season because of Russia’s invasion of Ukraine. The annual East Asia Summit, ASEAN and APEC meetings always attract attention due to the proximity of many world leaders, but the less glamorous work of the multilateral mechanisms goes on throughout the year in efforts to drive cooperation as well as to prepare for the jamborees at the year’s end. Russia is a resident power in Asia and is a member of all the key bodies that constitute the region’s multilateral architecture. It became an ASEAN dialogue partner in 1996, joined APEC as part of its final expansion in 1998, is a member of the ASEAN Regional Forum and Asian Defence Ministers Meeting plus process and in 2011 acceded to the East Asia Summit along with the United States. However, interest in regional affairs and participation in these processed has waxed and waned over time. Since its invasion of Ukraine, relations with Russia hav...

Authors: Poonam Singh, NITIE and Vikas Kumar, Azim Premji University As New Delhi was brought to a standstill in 2021 by protests that forced the rollback of farm law reforms, the Mumbai-based Securities and Exchange Board of India (SEBI) introduced tighter regulations governing related party transactions (RPTs). The successful implementation of these regulations highlights the importance of inclusive deliberations, gradualism and alignment with other domestic regulations and international best practices. An RPT is an arrangement between two parties who are engaged with each other for the transfer of resources, services or obligations, irrespective of whether a price is charged. While RPTs are a means through which controlling owners can expropriate wealth from minority shareholders, they can be beneficial if they substitute internal markets. The substitution could result in cost savings, increased efficiency and optimal utilisation of resources. To harness these benefits, RPTs nee...