The Association of South-East Asian Nations - Assignment Example

Student’s Name Professor’s Name Subject Date Аsiа Расifiс Business ехаm questions 1. Which of these two countries, India or China enjoy superior economic prosperity for the 21th century? What elements of current policy in each country will help for change their future? There has been a controversy when it comes to comparing the two emerging technological powers; China and India. Some argue that China is more superior to India with regard to economic prosperity while others think India is more powerful. According to Dahlman (2007), despite the fact that the growing economic stature of India and China is extensively known, the factors that contribute to their success are still not well understood. What is almost clear is that there is the benefit of a large low-wage workforce, a factor that cannot solely be the foundation of an economic superpower. In the 21st century, China enjoys superior economic prosperity compared to India. Both countries have the potential to grow but it all depends on how policies and strategies are implemented. One reason as to why China tends to be more economically prosperous than India is that India has an extremely corrupt political system. This is despite being a democracy and the people having freedom. In as much as China is also corrupt, it is also quite efficient. India is also characterized by a crumbling urban infrastructure while China is well developed as the country realizes the importance of investing in its urban infrastructure. India is also lower in performance when factors such as malnourishment, illiteracy and gender inequality are concerned (Dahlman, 2007). Some of policy changes in the countries that will help in having a bright future include; investing heavily in infrastructure, enhancing the education systems to reduce illiteracy levels, advocating for gender equality and empowering the citizens on various aspects. There is also need to take advantage of strong population growth. Some of the sectors that India and China should examine and make changes as a way of achieving overall economic prosperity include agriculture, industry, trade and foreign investment among others. 2. The Association of South East Asian Nations (ASEAN) is often seen as having primarily an economic focus? How successful has it been in achieving economic integration for the region? ASEAN is an organ that has been crucial. It is credited among the successful regional organizations in the developing world. It is known for maintaining regional peace as well as a stability in Southeast Asia for more than 30 years. The initial goals of ASEAN were modest and mainly focused to moderating regional inter-state relations. Nonetheless, the association later expanded its remit by choosing to be involved in other aspects such as getting diplomatically involved in the Cambodian crisis that was experienced in the 1980s. The association has had its fair share of success as well as challenges. To some extent, ASEAN has been successful in achieving economic integration for the region. It is however worth noting that during the initial years of operation, the association was in a position to achieve great heights of success particularly in uniting Southeast Asia compared to years later. Currently, the association is faced with various challenges that are associated with a poor human rights record, a lack of economic integration and the new US administration among others (Nesadurai, 226). Being the only other regional economy of that calibre outside Europe, ASEAN has a considerable potential to develop economically. Nonetheless, the association has not yet attained its principal goal of economic integration. Partly, this can be attributed to the fact that the ASEAN Economic Community (EAC) does not have a common regulatory framework hence preventing ASEAN from becoming a key economic player. There is also the issue of diversity among the member states with respect to economic development. For instance, while some states are relatively high in GDP per capita, others are associated with far lower levels of growth and prosperity. Barriers to economic integration come as a result of political, cultural, economic and religious diversity among the members’ states (Nesadurai, 235). However, all is not lost and strategies could be set up to improve the situation. 3. Examine the claim that the flying gees model of development overstates the rule of 3 open while not giving enough attention to other factors that underpinned economies development of North East Asia in the 1950s to the 1980s? For a long period of time, there have been claims that the flying gees model of development overstates the rule of 3 open while not giving enough attention to other factors that underpinned economies development of North East Asia in the 1950s to the 1980s. The flying gees model stipulates the manner in which undeveloped nations can become developed relatively fast. To achieve this, the undeveloped nation is supposed to adopt appropriate labour-intensive industries from more developed nations. At first, the country produces for the local market but starts exporting as soon as the industries begin to grow strong enough. Also, products are crude, simple and cheap and gradually advance in quality (Kojima, 378). The cycle repeats itself resulting to a rapid process of national economic development. Despite the fact that the theory wishes the best for nations in terms of development especially for the undeveloped nations, there is a dark side of the theory. The theory tends to overstate some aspects while at the same time overlooking other factors of economic development hence causing an imbalance. The theory stipulates that the situation of discrepancy is supposed to be met through imports resulting in balance of payments. Pressure to enhance exports could however improve the balance. Discrepancies could also result in a shift of production away from domestic industries in the less developed nation with respect to the export sector (Kojima, 386). At the end of it all, this may cause problems of too much supply capacities on the side of the underdeveloped country. For a theory to be successful there is need to have an in-depth look of all the factors that may in one way or the other affect a situation. This will work by dealing with an eventuality that may arise. A balanced examination of all factors will lead to successful application of the theory in different scenarios. 4. The South Korean economy accepted IMF structural adjustment policies as part of the Asian Financial Crisis bailout. Has this improved the health of the South Korean Economy? Discuss The Asian financial crisis was associated with various negative effects, which means that there was need for the adoption and implementation of effective strategies aimed at dealing with the consequences. For South Korea, it accepted IMF structural adjustment policies as part of the Asian Financial Crisis bailout. In 1997, the executive board of IMF approved the financing of around SDR 15.5 billion over a period of three years. The crisis resolution strategy was aimed at restoring confidence and stabilizing the financial markets. Another reason was to set the foundation for the recommencement of sustained recovery in the real economy. This therefore included a combination of macroeconomic policies and effective structural reforms. Macroeconomic policies allowed for the restoration of financial stability quite fast, an aspect that offered stimulus to the economy. The impacts of inevitable recession were mitigated by a fiscal stance in the initial stages of the program. While corporate restructuring efforts first focused on enhancing governance and competition policies, the focus later shifted to operational and financial restructuring, with an aim of minimizing debt levels and reinforcing capital structure (International Monetary Fund, 2000). To a large extent, the adoption of the IMF structural adjustment policies has enhanced the health of the South Korean economy. They have helped Korea in recovering strongly. Polices implemented under the program supported by IMF have assisted to successfully restore external stability, set off reform of the corporate and financial sectors as well as rebuild reserves. Through the strategies, Korea has been in a position to get independence from IMF help and even settled most debts. Although Korea is moving to the right direction, there is need to avoid complacency and instead uphold the momentum of structural reforms. Most success of the program can be attributed to the involvement of various stakeholders such as the business and government. 5. Explain the reasons for the collapse of the Japanese economic bubble and assess the policy framework for sustainable recovery since that collapse. Why have these policies met with only limited success? Stiglitz (2017) states that the strong economic growth of Japan came to an expected end at the beginning of the 1990s. Prior to this, anomalies within the Japanese economic system had raised a tentative asset price bubble of a considerable scale. Window guidance, a policy mechanism by the Bank of Japan, led to the bubble as a result of excessive loan growth quotas dictated on the banks. Lending more, with less regard for quality of the borrower, by the banks played a role in inflating the bubble economy. There are various reasons that could be cited with regard to the collapse of the Japanese economic bubble. For instance, the bank of Japan tried to keep inflation in check and deflate speculation by raising the inter-bank lending rates towards the end of 1989. This was a sharp policy which led to the bursting of the bubble and the eventual crashing of the Japanese stock market. Most firms became unsustainable. The collapse of the bubble economy had negative effects on the nation and hence the need to come up with strategies that are aimed at dealing with the situation. Some of the aspects of policy framework put forth for sustainable recovery from the collapse include the following; economic stimulus, corporate restructuring and structural reforms, and monetary and exchange rate policy among others (Stiglitz, 2017). Stiglitz (2017) asserts that the policies have only achieved limited success. This is more so due to lack of effective strategies and measures that go hand in hand with what is happening with the local as well as global economy. There is need for an economic programme that is capable of stipulating effective strategies that allow for the achievement of the inflation target and boosting growth to the desired level. Proper planning and execution of strategies is also essential for maximum success. Works Cited Dahlman, Carl J. "China and India: emerging technological powers." Issues in Science and Technology 23.3 (2007): 45-53. International Monetary Fund. Recovery from the Asian Crisis and the Role of the IMF, 2000. https://www.imf.org/external/np/exr/ib/2000/062300.htm Kojima, Kiyoshi. "The “flying geese” model of Asian economic development: origin, theoretical extensions, and regional policy implications." Journal of Asian Economics 11.4 (2000): 375-401. Nesadurai, Helen ES. "The Association of Southeast Asian Nations (ASEAN)." New political economy 13.2 (2008): 225-239. Stiglitz, Joseph. A better economic plan for Japan. The Guardian, 2017. https://www.theguardian.com/business/2016/sep/15/a-better-economic-plan-for-japan Read More