Category: Political Economy

The U.S. can Ill Afford a Divided Japan-South Korea

When ‘unthinkable’ events happen, they can change the course of history. The bilateral agreement reached by South Korea and Japan over ‘comfort women’ on 28 December 2015 was one such ‘unthinkable’ event.

South Korea had few incentives to resolve an issue that allowed it to exercise the moral authority of victimhood. In addition, Japan was not shy about expressing its frustration with its neighbour’s criticism of Tokyo’s handling of past wrongs.

So how did they reach an agreement, and what does it mean?

Meanwhile, Congress Battles Among Themselves

The focus of most investors is the rate decision by the Federal Reserve tomorrow.  Since the central bank completed its asset purchase program at the end of last year, a rate hike has been understood as a matter of time. 

Japan’s Hashimoto Practices Unconventional Politics

The results of the November 2015 ‘double election’ for the Osaka Prefectural governor and Osaka City mayor are in. The regional Osaka Ishin no Kai candidates won both positions with huge margins, defeating their rivals — including those supported by the ruling Liberal Democratic Party (LDP) and other national political parties.

It is rather exceptional in Japan that both the governor of a prefecture and the mayor of a city within that prefecture represent a regional political party.

Part of Abe’s Third Arrow Takes Aim at Governance

As part of Abenomics’ third arrow of structural reform, Japan recently adopted a new corporate governance code. The new code focuses on making Japanese corporations more transparent, more responsive to shareholders — including minority shareholders — and subject to more effective oversight by boards of directors, especially outside directors. It seeks to make boards of directors not only more active and independent, but more diverse.

France an Example of Europe’s Governance Challenge

With the ECB poised to take additional steps down the unorthodox monetary policy route, financial and economic forces are as potent as ever.  However, there is a subtle shift, taking place that few seem to recognize.  It is the re-emergence of non-economic/non-financial issues.

Since the Great Financial Crisis began, and especially since the emergence of the European debt problems, economics have been paramount in Europe.  Even political developments were understood in relation to the economic and financial problems.   

Grabbing Hands Grab All the Land

Behind the impressive growth of the world’s two largest emerging nations, China and India, land has been a key infrastructural resource as well as a major source of social conflicts. Laws in both countries have allowed the governments to take land away from agricultural communities for industrialisation and development, while offering little compensation or no resettlement alternative in return.

Did Ma Meet Xi for His Political Legacy?

Taiwanese President Ma Ying-jeou met with Chinese President Xi Jinping in the first ever meeting between the leaders of the two countries on 7 November 2015 in Singapore.

The timing of the meeting is interesting and controversial. President Ma is an unpopular president whose term is about to end. His party, the Kuomintang (KMT), is widely predicted to lose both the next presidential and parliamentary elections. Many see Ma’s decision to meet Xi as an attempt to secure his historical legacy and provide a boost to his struggling party.

The Iberian Peninsula Grabs Headlines

The US dollar is firm within fairly narrow ranges that have prevailed this week as the market consolidates its recent gains.  Draghi’s comments to the European Parliament are similarly dovish in tone to the October post-ECB press conference.  Sterling posted outsized gains yesterday, pushing above $1.5200, and those gains extended to almost $1.5250 today before sterling sold back to $1.5175, leaving it almost flat against the euro.