Fred Bergsten of Institute for International Economics is pushing for creation of a Free Trade Area of the Asia-Pacific Region (FTAAP) -- a plan B to get the world back on track given the faltering Doha Round (See today's Financial Times column.) An FTAAP with the U.S., Japan, and China and the 18 other current members of
CGD Policy Blogs
The NATO Parliamentary Assembly has just released a report on “China's Development Challenge.” While the report discusses such topics as foreign investment and China’s energy needs, much of the analysis focuses on the challenge of rural development. This focus on the rapidly growing divide between China’s rural and urban economies and the fear of spreading rural unrest is correct: the problem has been growing for more than a decade.
There is an old French maxim that says, if you can't fire a worker, don't hire him. Asia seems to be learning French. The widespread "push-back" against earlier abuses of labor rights by non-democratic regimes is producing a host of well-intentioned labor market interventions throughout Asia that risk undermining the region’s greatest asset: it’s abundant and affordable labor. In Indonesia, for example, minimum wages have risen three-fold since 1998 and a number of local governments are actively competing to see who can have the highest minimum wage.
In contrast to Davos-in-NY in 2002, when the post-Sept. 11 talk was of the risk of terror and Davos 2003 when the corridor discussion was mostly about Iraq and the impending war, there is no grand obsession this year. There is sensible and mildly worried talk about whether the global economic recovery will be sustained. Most attention is given to the imbalances in the world economy – particularly U.S. budget and current account deficits; the Europeans’ tepid growth and stolid Central Bank reluctance to stimulate; and the Chinese resistance to letting their currency appreciate.