The following event is being organized on the side lines of the Follow-up International Conference on Financing for Development at Doha, Qatar. (29 November - 2 December 2008).

“Climate Change and Development – How to Mobilize, Transfer and Use Innovative Funding, 1 December 2008, Sheraton Convention Centre, Doha, Qatar”

Efforts to increase climate resilience, to move to a low-carbon development path and to maintain progress towards the MDGs will require new and additional financing from various sources. Several options are currently under consideration or are already being implemented.

PANELISTS:
Mr Dr. Danny Leipziger World Bank Vice-President for Poverty Reduction and Economic Management (tbc)
Mr Louis Michel European Commissioner for Development and Humanitarian Aid
Mr Dr. Ramakrishna Sithanen Vice-Prime Minister, Minister of Finance and Economic Empowerment, Mauritius
Mr Dr. Yash Tandon Executive Director South Centre, Geneva
Ms Margareta Wahlström Swedish Commission on Climate Change and Development,
UN Assistant Secretary-General for Disaster Risk Reduction
Ms Heidemarie Wieczorek-Zeul Federal Minister for Economic Cooperation and Development (BMZ), Germany; Special Envoy of the UN Secretary-General for the
Follow-up International Conference on Financing for Development

Moderator: Mr Johan Schaar Swedish Commission on Climate Change and Development

Dr. Yash Tandon, Executive Director, South Centre (the Geneva based Intergovernmental think tank of the developing countries) is one of the panelists at this event organised by the European Commission, and Governments of Germany and Sweden.

More information and event flyer is available for download at: http://www.southcentre.org/index.php?opt…

————

Vikas Nath
Head - Media and Communications
South Centre
Geneva
Tel: + 41 22 791 8050
Web: www.SouthCentre.org
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The UNU on Arid Aquaculture.
11 November, 2008

The UNU researchers issued a report “Arid Aquaculture Among Alternative Livelihoods Promoted to Relieve Worsening Pressure on World’s Drylands” as a result of the four-year study in cooperation with the International Centre on Agricultural Research in Dryland Areas (ICARDA), and UNESCO’s Man and the Biosphere (MAB) Program.

“Arid aquaculture” using ponds filled with salty, undrinkable water for fish production is one of several options experts have proven to be an effective potential alternative livelihood for people living in desertified parts of the world’s expanding drylands.

While it may sound far-fetched, researchers say using briny water to establish aquaculture in a dry, degraded part of Pakistan not only introduced a new source of income, it helped improve nutrition through diet diversification. The researchers also showed it possible to cultivate some varieties of vegetables with the same type of brackish water.

The project based on the results of the research will be launched by the project partners in Istanbul, Turkey, at 1:00 pm local time Nov. 12 at meetings of the UN Convention to Combat Desertification.

A policy brief based on the Sustainable Management of Marginal Drylands (SUMAMAD) project and News Release on “Arid Aquaculture Report” are available on-line.

People in Marginal Drylands. Managing Natural Resources to Improve Human Well-being. A policy brief based on the Sustainable Management of Marginal Drylands (SUMAMAD) project Drylands_policy_brief.pdf

Arid Aquaculture Among Alternative Livelihoods Promoted to Relieve Worsening Pressure on World’s Drylands. Four-year Study Calls for Urgent Reforms to Avert Further Desertification That Threatens Millions of “the Poorest of the Poor” Worldwide.

Dryland policy brie new release.doc

On November 24, 1947, 61 years ago, the UN General Assembly decided to partition the remaining territory of the British mandate over Palestine into two independent states - one for the Jews and the other for the Arab Palestinians. We used the word “remaining” because of the fact that out of the territory of that British mandate was previously carved also the present Kingdom of Jordan.

The brute facts are that the Jews seized the opportunity and created the State of Israel, but the Islamic  world did not accept and the neighboring Arab States invaded and seized whatever land they could.

The facts are thus that a State of Palestine was not created - not because of an opposition from the Jewish side, BUT BECAUSE OF THE FACT THAT THE ARABS GRABBED WHAT THEY COULD. Yes, there were many wars since, and the Palestinians woke up and demanded their due. Nobody negates their right to a State if they can accept that history does not stand still, and what you refused or you were not allowed by your brothers to accept YESTERDAY, cannot become your negotiating position today.

On above basis, it is not that the Palestinians or their brothers in the Arab World discredited themselves on November 24, 2008 - it is the whole UN leadership that discredited themselves yesterday - See the photo bellow - it includes the UN Secretary-General Ban Ki-moon, Miguel d’Escoto Brockmann, President of the General Assembly, and the person who was left nameless by Ms. Bayefsky, the Under-Secretary-General for Political Affairs, who happens to be an American who was put there on the UN leadership quota filled by President G.W. Bush -  the US diplomat  B. Lynn Pascoe (we found the ommission of this name disgusting as well).

Yes, what we find completely unforgiving was to celebrate at the UN - the British Mandate Partition Day with the flag of Palestine flying on stage - a non-State as of yet - while omitting the Israeli flag - a UN Full-Member State.
So, under Secretery-General Ban Ki-moon, and with the OK of the United States, probably thanks to the power of Arab Oil-States money, and the otherwise rational President of the General Assembly, a former foreign minister of Nicaragua, the UN made a PARODY of itself. How can one trust this bunch to do any better at these days of total collapse of the global economy? Will they just turn around and wax fine the MDG talk? Do they not understand that success requires first impartiality and that requires honesty - and not the bending to money?

For Immediate Release:
November 25, 2008
Contact:  Anne Bayefsky
(917) 488-1558
 anne at hudsonny.org

NEW YORK - The President of the UN General Assembly has launched an unprecedented attack on a UN member state from the Assembly podium. Going beyond even existing UN resolutions, Miguel d’Escoto Brockmann of Nicaragua accused Israel of apartheid and called for “a campaign of boycott, divestment and sanctions” against it. Reminiscent of a classic antisemitic slur, Brockmann (himself a Roman Catholic priest and one-time official of the World Council of Churches) also claimed our Palestinian “brothers and sisters are being crucified” by Israel.

His remarks were made on November 24, 2008 during the UN Day of Solidarity with the Palestinian People. This annual event marks the adoption of the General Assembly’s partition resolution which called for the creation of a Jewish and an Arab state on November 29, 1947.

“Brockmann’s assault is a gross abuse of the position of Assembly President,” commented Anne Bayefsky, Editor of EYEontheUN. “He knows full well that his outrageous personal views will be translated into six languages and webcast around the world.” Brockmann assumed the Presidency in September 2008, having been nominated by the Latin American and Caribbean regional group.

Brockmann made the apartheid allegation twice in one day, once in the morning at the annual meeting of the UN Committee on the Exercise of the Inalienable Rights of the Palestinian People, and again in the General Assembly in the afternoon. In his words:
“I spoke this morning about apartheid and how Israeli policies in the Occupied Palestinian Territories appear so similar to the apartheid of an earlier era, a continent away. I believe it is very important that we in the United Nations use this term. We must not be afraid to call something what it is. It is the United Nations, after all, that passed the International Convention against the Crime of Apartheid, making clear to all the world that such practices of official discrimination must be outlawed wherever they occur.”

“Brockmann’s call,” said Bayefsky, “was in effect, a call for the political destruction of Israel by means of the same strategy adopted against apartheid South Africa.” Brockmann said:

• “More than twenty years ago we in the United Nations took the lead from civil society when we agreed that sanctions were required to provide a non-violent means of pressuring South Africa…Today, perhaps we in the United Nations should consider following the lead of a new generation of civil society, who are calling for a similar non-violent campaign of boycott, divestment and sanctions to pressure Israel…”

The adoption of the 1947 partition resolution, accepted by Jews and rejected by Arabs, is now bemoaned by the UN. Former Secretary-General Kofi Annan described Palestinian Solidarity Day as “a day of mourning and a day of grief.” This year, as in years past, the UN used the occasion to fly only two flags, that of “Palestine” and that of the United Nations. Though the resolution was ostensibly the UN’s first commitment to a two-state solution, today the flag of the member state of Israel is left out.

The Palestinian flag is on the left, the United Nations flag on the right. Speakers from left to right who voiced no difficulty with the omission of the flag of Israel:

Riyad Malki, Minister for Foreign Affairs of the Palestinian Authority; Jorge Urbina, Representative of the President of the Security Council; Miguel d’Escoto Brockmann, President of the General Assembly; Paul Badji, Chairman of the Committee on the Exercise of the Inalienable Rights of the Palestinian People; Ban Ki-moon, Secretary-General of the United Nations; H.M.G.S. Palihakkara, Chairman of the Special Committee to Investigate Israeli Practices Affecting the Human Rights of the Palestinian People and Other Arabs of the Occupied Territories; and the Under-Secretary-General for Political Affairs.

Tuesday, Nov. 25, 2008

Obama offers new Asia tack: Vogel - New administration will solicit Japan, China cooperation to help remedy world’s ills; Japan will continue to be a friend of the United States, but incoming President Barack Obama may try to approach China more to solve international issues because Beijing can more quickly effect policy, according to a noted American expert on Japan and China.

By SAYURI DAIMON, Staff writer, The Japan Times online.

“It’ll be easier to get the Chinese government to make an agreement, because when they make it, they can enforce it much more quickly,” said Ezra Vogel, Henry Ford II professor of social sciences, emeritus, at Harvard University.

“So on international issues, even though Japan is our ally and our friend, for a lot of problems we’ll be talking more to China because they can solve issues more and they are now beginning to play a big role,” Vogel said in a recent interview with The Japan Times.

Even though Obama faces daunting challenges, ranging from the economic crisis to Middle East peace negotiations to North Korea’s nuclear threat, the incoming administration is signaling it is ready to be cooperative with the rest of the world, Vogel said.

“Obama is an unusually good choice for trying to bring back a good will that has been lost during the (George W.) Bush administration.During the Bush era, there were some people in America who were quite proud and arrogant, who didn’t realize the world has changed,” said the author of the renowned book “Japan as Number One,” which was published in 1979.

“There are so many diplomats in Washington who felt we should be more cooperative with other countries. Now they will have more chances to express a cooperative attitude.”

As for Asia policy, Obama has surrounded himself with experts, including Jeffrey Bader, who worked at the State Department and National Security Council and headed the Asia team during Obama’s campaign, Vogel said.

Obama also tapped several Japan experts as advisers during the election campaign, including Gerald Curtis, a professor at Columbia University, Kurt Campbell, former deputy assistant secretary of defense for Asia and the Pacific, and Rust Deming, former deputy chief of mission at the embassy in Tokyo and former ambassador to Tunisia. Because Deming’s father served in Okinawa and he spent his childhood in Japan, he speaks Japanese well, Vogel added.

“There are a lot of good people Obama can use. So much talent wants to work for him that he will have good choices,” he said.

But while the United States may look to be more cooperative with the rest of the world, Vogel said it will demand reciprocal cooperation at the same time.

“So if other nations do not cooperate in trying to deal with big refugee problems, in trying to resolve (the) North Korea (nuclear threat) and in trying to resolve the Middle East issues, there will be a lot of frustration in the United States about the failures of other nations to do their share.”

For example, more than 10 years have passed since an agreement to relocate the U.S. Marine Corps Air Station Futenma in Okinawa was reached, but the move is nowhere near happening. On North Korea, Japan’s tough stance and strict focus on the abductee problem is a stark difference with the other nations in the six-party denuclearization talks.

“If Japan only stresses the abductee issue and does not show signs publicly of cooperating, then there will be increasing frustration,” Vogel said.

He also touched on Japan’s internal political malaise.

Obama may have a hard time trying to form a close personal relationship with Prime Minister Taro Aso, whose stint may be fleeting amid the rotating door of Tokyo’s recent leadership, Vogel said.

Bush was fortunate to be able to form a relationship with Prime Minister Junichiro Koizumi, because he held office for several years, he said.

“But now Aso is already almost a lame duck. So will Obama spend so much time to form a relationship with Aso? Of course he will form some relationship, but given all the other pressing issues, he may decide to wait for the (next) election, see who emerges as the new leader and try to work with that leader,” Vogel said.

——————–

The Shift in the Way the US Views East Asia Started Already in President G,W, Bush Days. The US-China tie is a reality that was cemented by the US financial debt to China - as per the following article:

Tuesday, Nov. 25, 2008

U.S.-China ties weaken alliances. {Says further a Japanese Opinion Piece that Comes From A different Japanese Publication.}
As the United States works harder than ever to strengthen relations with China, there are signs its alliances with Japan and Taiwan are weakening. A conspicuous sign of change in Japan-U.S. ties came early Oct. 12 when President George W. Bush telephoned Prime Minister Taro Aso to inform the latter of the decision to remove North Korea from Washington’s list of terrorism-supporting nations.

Officials of Japan’s Foreign Ministry had suspected that Washington would take this action despite Tokyo’s repeated pleas not to appear conciliatory toward North Korea before the fate of Japanese citizens abducted by Pyongyang in the 1970s and ’80s was resolved. The phone call came only half an hour before the State Department announced its decision.

Other signs indicate that Washington is more interested in promoting ties with Beijing than in maintaining existing military alliances with Japan or Taiwan. For one thing, Washington has refused to provide Japan’s Air Self-Defense Force with the next-generation F-22 Raptor fighter. For another, the U.S. has declined Taiwan’s request for attack helicopters and diesel-powered submarines.

To make matters worse, a Chinese diplomat hints that North Korean strongman Kim Jong Il has regretted pursuing “mea culpa” diplomacy with Japan since admitting to then Prime Minister Junichiro Koizumi in 2002 that his followers were responsible for the abductions. A handful of abductees were returned to Japan; Pyongyang has not made known the whereabouts of others.

Ever since the end of the Cold War, the Korean Peninsula and the Taiwan Strait have been hot spots for American military operations in Asia. The Bush administration, however, has shifted its diplomatic strategy toward building a stronger cooperative relationship with China, as Washington has been beset with wars in Afghanistan and Iraq and annual military expenditures of $200 billion.

Even though Russia has developed Su-35 fighters and China has come up with Jian-10 fighters, to compete with the F-22 Raptor, the U.S. has refused to provide the ASDF with its most advanced fighter apparently because Washington attaches greater importance to easing tension with Beijing than to strengthening the military alliance with Tokyo.

In early October, when the Pentagon announced the sale of weapons worth $6.463 billion to Taiwan, China lost no time lodging a protest against the sale as a violation of the 1982 Sino-American joint communique. On other hand, it says it is not really worried about the deal.

Among the weapons sold to Taipei were four E-2T Hawkeye early warning aircraft; 330 Patriot III surface-to-air missiles; 30 Apache anti-tank attack helicopters; 32 Harpoon anti-ship missiles; and 182 Javelin anti-tank guided missiles as well as spare parts for F-16A/B fighters and other aircraft.

Conspicuously missing from the list, though, were UH-60 Black Hawk attack helicopters and diesel-powered submarines.

In July, Taiwanese President Ma Ying-jeou of the Nationalist Party, who replaced Chen Shui-bian of the Democratic Progressive Party in May, had sent a high-level delegation headed by Legislature President Wang Jin-pyng to Washington to request the helicopters and submarines. The message from Washington to Beijing lay not in the sale of the five groups of weapons to Taiwan, but in the refusal to sell the two others.

Furthermore, the U.S. has not acceded to Taiwan’s request for providing Aegis ships, which Taipei has long hoped would replace four Kidd-class destroyers commissioned by the Taiwanese navy in 2005. This mirrors Washington’s refusal to sell the F-22 Raptor fighters to Japan.

Shortly after taking office in 2001, President George W. Bush said he would not hesitate to use force to defend Taiwan from Chinese attacks. He subsequently declared he would oppose any independence move by the island, and turned the cold shoulder to independence-minded President Chen. Since Ma replaced Chen, Bush has worked harder than ever to avert a military confrontation with the regime in mainland China, as a way to prevent tensions from mounting on the Korean Peninsula or in the Taiwan Strait.

From the Chinese perspective, the U.S. is no longer a hypothetical enemy, but rather an inseparable economic partner. Indeed, China owns $518.7 billion of the U.S. government’s bonds — the second largest sum owned by any country. When mortgage securities issued by Fannie Mae and Freddie Mac are added, Chinese holdings of American securities come to $900 billion. Thus a fall in the value of the dollar would hurt the Chinese economy.

Premier Wen Jiabao told financial leaders in New York in late September that China would cooperate in resolving the global credit crisis. A few weeks later, Bush phoned his Chinese counterpart, Hu Jintao, to inform him of Washington’s plan to spend $700 billion to rescue the financial industry. Hu reportedly replied that healthy development of the American economy would benefit both countries, suggesting that China was willing to buy more U.S. bonds.

The expression of mutual cooperation to combat the financial crisis coincided with the announcement of the U.S. weapons sale to Taiwan. This shows that both the U.S. and China are fully aware of how much they need each other these days. China is helping the U.S. now, but the Chinese economy cannot survive without continued reliance on exports to the American market. Mounting tension in Asia is the last thing desired by either country.

The Sino-American relationship has reached a turning point, as has the alliance between Washington and Tokyo, which played a key role when the U.S. was the undisputed sole superpower. The U.S. may have begun viewing Japan, like Taiwan, as a minor global player.

This is an abridged translation of an article from the November issue of Sentaku, a monthly magazine covering the Japanese political, social and economic scene.

————–

Others have a different opinion that amounts to having them believe that Asia as a whole will have more enhanced role in the future through the enhanced importance of the G-20 negotiating arena.

Tuesday, Nov. 25, 2008

Room for Asian influence in G20 structure

By MICHAEL RICHARDSON - Special to The Japan Times.
SINGAPORE — Finance ministers and central bank governors from the Group of 20 advanced and emerging economies have been meeting regularly for nearly a decade. But the decision to convene a summit of the G20 heads of government in Washington the weekend of Nov. 15 marked an important turning point in the way global economic problems are handled. The summit agreed on a plan for tackling the financial crisis and the deepening slump.

This is an opportunity for Asia to increase its influence in managing the world economy, provided leading players — China, India, Japan and South Korea — can put aside long-standing geopolitical rivalry and intensify coordination.

As a forum for consultation and cooperation, the G20 seems set to become a prominent feature of the global economic landscape. Its leaders will meet again by the end of April to review their ambitious action plan, which ranges from reform of banking, accounting and credit-rating standards to stimulating economic recovery, sustaining world trade and investment flows, and ensuring that the International Monetary Fund and the World Bank have enough resources to cope with future challenges.

The scope of the problems confronting many economies, both developed and developing, have propelled the G20 from obscurity to the front line. These problems can no longer be tackled by North American and European powers alone or in a dominant position, even though they retain hefty economic and financial clout.

The G20 members, although still a relatively small and cohesive group, stand a better chance of success. Collectively, they account for two-thirds of the world’s population, 80 percent of its trade, 85 percent of the banking system, and 90 percent of global economic activity.

Japanese Prime Minister Taro Aso noted that governments taking part in the summit had to work together to limit the depth of the downturn. “It does no good to panic in a crisis, and that is proven by the Great Depression of 1929,” he said. “Today, things are entirely different. We have a framework for cooperation.”

The interests of advanced and emerging economies are reasonably balanced in the G20. Members from the former include the United States, European Union, Britain, Canada, France, Germany, Italy, Japan, Russia, South Korea and Australia, while the developing world is represented by China, India, Indonesia, Brazil, South Africa, Mexico, Argentina, Saudi Arabia and Turkey.

The role of Asia — broadly defined to include East Asia Summit membership (the 10-member Association of Southeast Asian Nations plus China, Japan, South Korea, India, Australia and New Zealand) — in the G20 is unique for two reasons: First, it cuts across the North-South divide, linking Japan, South Korea and Australia with China, India and Indonesia.

Second, Asia’s potential clout is huge. Measured by purchasing power, Asia accounts for more than 35 percent of world GDP, compared with the U.S. and the EU at 20 percent each.

Moreover, Asia has been contributing to around half of world growth in recent years. Although hurt by the current crisis, major Asian economies have not slowed as much as Western counterparts. Asian resilience and the fact that the region holds about one-third of the world’s central bank reserves could play a key role in cushioning the recession and aiding recovery. Whether it does so will depend on the extent to which major Asian players are prepared to put aside rivalry and align and coordinate their economic and financial interests.

A start has been made in this direction through the proposed expansion of the network of currency swaps in Asia and plans for a regional bond market and an Asian currency unit. This kind of cooperation needs to be intensified if Asia’s punch is to reflect its true weight.

It would help, too, if China were to follow Japan, which announced it would lend up to $100 billion to the IMF to help provide financial lifelines to crisis-hit emerging countries.

The current structure of the G20 leaves plenty of room for Asian influence. The G20 operates without a permanent secretariat or staff. The chairmanship of the group rotates each year among members and is selected from a different regional grouping of countries each time. Continuity and direction are given by a revolving three-member management body of past, present and future country chairs, referred to as the Troika.

Brazil, Britain and South Korea form the current Troika. If Asia wants to reshape the global economy and financial system, there is no better opportunity to do so than now.

Michael Richardson is a security specialist at the Institute of South East Asian Studies in Singapore.

(E-mail:  mriht at pacific.net.sg)

American Task Force on Palestine, Foundation for Middle East Peace & Middle East Institute,

1761 N Street NW, Washington, DC 20036

invite you to a discussion on:  The Future of the Peace Process: A Palestinian Perspective.

with
PLO Negotiation Affairs Department’s
Maen Areikat
Rami Dajani
Khaled Elgindy

Thursday December 4 - 12:00-2:00PM
Middle East Institute Boardman Room
1761 N Street, NW - Washington DC

A light lunch  will be provided

As a new Administration gets ready to take office in the United States, and as Israel prepares for elections, questions arise regarding the future direction of Israeli-Palestinian peace negotiations. What are the Palestinian positions on the format for negotiations and the substance of permanent status issues. i.e. borders, settlements, Jerusalem, refugees, after more than a year of negotiations?  How much progress has been achieved in the Annapolis negotiations on specific issues? What is the Palestinian position on the Arab Peace Initiative as a basis for negotiations? Can peace negotiations survive the political “down-time” until the political maps in Israel and the US become clear in the coming months? If so, how can the intervening period be best used to preserve progress and lay the ground for renewed negotiations? What effect does the situation in Gaza and the turbulent Palestinian domestic developments have on the negotiation process? What do the Palestinians want from the new US Administration?

Maen Areikat is the Deputy Head and Coordinator General of the PLO Negotiations Affairs Department (NAD) of the PLO. In addition to overseeing NAD operations, Mr. Areikat supervises the Negotiations Support Unit (NSU) and the Negotiations Secretariat, which was recently established to follow up on committee meetings between Israelis and Palestinians. Rami Dajani is the Legal Advisor for the Security File at the Negotiations Support Unit (NSU). Mr. Dajani is responsible for overseeing technical preparations on issues related to final status negotiations on security and is among the primary advisers to the Palestinian leadership on Palestinian Roadmap obligations. Khaled Elgindy is the Policy Advisor for the Settlements File at the Negotiations Support Unit (NSU). In addition to managing the NSU’s settlements file, Mr. Elgindy is heavily involved in strategic planning and U.S. outreach efforts at the NSU.

RSVP Foundation for Middle East Peace: info@fmep, or call 202 835 3650

Monday, Nov. 24, 2008, The Japan Times online.

JAPANESE PERSPECTIVES
G20’s shared crisis Obama’s first entree?

By TERUHIKO MANO

With the messages of “Change” and “Yes, we can,” Democratic Sen. Barack Obama won the U.S. presidential election on Nov. 4. Apparently aided by the financial crisis that unfolded under the Republican administration of George W. Bush, Obama scored a resounding victory that gave him more than double the number of Electoral College votes that went to the Republican candidate John McCain.

The election of the 47-year-old senator as the first black American president itself symbolizes a major change that has swept the U.S. What will be the global implications of this change, and how should Japan respond?

The new president will face a massive domestic challenge. He must dispel the financial uncertainties and rebuild the nation’s real economy.

Diplomatically, he will need to deliver his campaign promise to steer the country away from the Bush administration’s unilateral approaches and strive for closer cooperation with the rest of the world.

Unlike Bush, Obama will have the Democrats who have expanded their majorities in both houses of Congress in the November election.

Still, many of the challenges that he will face as he enters the White House, including unifying the multifaceted and complex American society, dealing with the credit uncertainties and the massive external imbalances, and pulling forces out of Iraq, will be hard to resolve in the immediate future. There will emerge new problems and international friction as he starts to take action.

Obama’s economic policies of trying to support the middle- and low-income segment and narrow the rich-poor gap could lead him to take severe steps against countries like China and Japan that have large trade surpluses with the U.S. and are often seen as taking away job opportunities from American workers.

As was discussed during the Nov.15-16 Group of 20 summit in Washington to deal with the financial crisis, it is of course important for each country to take domestic steps to boost their own economy. But such efforts must be made in a concerted way if they are to contribute to easing the global financial uncertainties. While the United States, as the major “imbalance” power with a current account deficit, needs to reduce its overconsumption, nations with surpluses must also correct their dependency on exports as the engine of their growth.

Japan of course needs structural reforms to shift away from its export dependency to more consumer-oriented domestic growth. At some point during this financial crisis, there were optimistic views about “decoupling” — or the belief that even if the U.S. falls into recession, Japan can still export to the emerging economics like the BRICs (Brazil, India and China). But the simultaneous falls in stock markets in many countries clearly show that economies around the world are steadily becoming intertwined.

It doesn’t appear to be a logical option for resource-poor Japan to keep using raw materials for exports only to build up unstable dollar-denominated assets. On the contrary, Japan, facing a rapidly aging population, needs to focus more human resources, goods and money at home.

Also in response to the incoming U.S. administration’s policy of seeking greater diplomatic cooperation, Japan needs to end its passive attitude of dealing with the holes in its security policies only after coming under pressures from its allies. Instead, the nation should clarify its own international security policies and implement them.

The security alliance with the United States will continue to be important. But the policies of the U.S. itself will be changing, and it would only be natural for Japan, as a sovereign state, to take voluntary actions in response to changing international circumstances, including China’s military buildup and uncertainties surrounding North Korea.

More than six decades after the end of World War II, it is imperative for Japan to proactively take part in reforms of international institutions such as the United Nations and the International Monetary Fund, which are falling behind changes in global realities. It would be needless to repeat there is an imbalance between financial contributions among U.N. members and their powers.

Following the change to the float system in 1973, the IMF regime was left unattended without steps being taken against the dollar’s unstable exchange rates. The problem has been highlighted in the current crisis.

Climate change also requires immediate action. Crisis can create opportunities, and the G20 meeting in Washington can be a starting point for that. With more countries being involved, it becomes even more difficult to reach a consensus. Still, the fact that participants were able to put together a joint statement is an indication that these countries shared a sense of crisis. Oil producing countries, whose policies can destabilize world prices, should take part in the process.

The second such conference is to take place by April, and each participant needs to aim for a common goal of creating a new stable worldwide financial system for the 21st century.

Rather than trying to protect their vested interests and claim their rights, the countries need to take responsibility for operating and sharing the burdens of a new international regime. Following its WWII defeat, Japan was unable to take part in the creation of the postwar regime. Today, the very postwar regime is up for review, and Japan should not waste this opportunity by being mired in futile domestic political turmoil. It must not just focus on its narrow, short-term interests, and should contribute to the reconstruction of world peace and stability.

Teruhiko Mano is a professor at Seigakuin University Graduate School.

—————-

Monday, Nov. 24, 2008, The Japan Times online.

Gulf states should step up — U.S. consumption can’t carry world

By TAKASHI KITAZUME
Staff writer

Persian Gulf countries with large accumulations of wealth can play an active role in reforming the international financial regime rocked by the ongoing global crisis, British experts told a recent symposium in Tokyo.

Paola Subacchi (right) and Vanessa Rossi, researchers from the Royal Institute of International Affairs, discuss the prospects for Gulf economies during a symposium held Nov. 12 at Keidanren Kaikan in Tokyo. SATOKO KAWASAKI PHOTO

The role of the Gulf region will also be important for the world to address the longer-term problem of continuing global imbalances — of the United States being the sole major driving engine of global growth, they said.

Two researchers from the Royal Institute of International Affairs were assessing the prospects for the Gulf economies and their possible roles for the world economy during the Nov. 12 symposium organized by Keizai Koho Center on the theme “Global financial turmoil: Gulf states as ‘white knights’?”

“The global economic order does not belong any more to the established developed countries,” and there is a “constant and progressive shift toward the inclusion of emerging market economies,” said Paola Subacchi, research director on international economics at the London-based institute, popularly known as Chatam House.

The presence of emerging economies, particularly China and some Gulf economies, was highlighted during the Nov. 15-16 meeting of leaders of the Group of 20 countries held in Washington to deal with the financial crisis.

Attention has focused on whether sovereign wealth funds of the Gulf countries would consider more acquisitions of distressed U.S. and European assets, but “the current mood actually is more toward including some of these countries in the larger debate on the reform of the international financial system,” Subacchi said.

The Gulf economies have experienced a large boom in recent years due to the high oil prices, which boosted infrastructure spending and investments in the region, Subacchi said.

And this boom is “very different” from a similar boom the region experienced from surging oil prices in the 1970s, “when the oil revenues were wasted rather than used in a productive way for development of the region,” she said.

Today, the Gulf economies have taken a “more regional approach,” in which “money tends to stay in the region, rather than being exported somewhere else, and there is a more private-sector approach” to using the oil revenue for productive investments, Subacchi said.

Vanessa Rossi, the institute’s senior research fellow for international economics, said emerging economies cannot be immune from the current global crisis. “There is no such thing as being able to ‘decouple’ in financial systems. We see all stock markets, all financial sectors affected by the crisis,” she said.

On Nov. 9, China unveiled a $586 billion stimulus package in an attempt to counter the impact of the global crisis on its growth.

Such efforts raise hopes that China may be able to maintain strong growth, Rossi said. “But I think the first priority for everybody in this crisis is looking after your own country’s growth, so this may be enough to keep China growing, but it’s not clear if it does the tricks for the whole world,” she noted.

There will also need to be more realism in assessing the prospect for the Gulf economies, given the recent fallback in the oil prices and the seriousness of the global crisis, Rossi said.

Still, Rossi pointed out, most of the Gulf countries have had “extremely prudent planning of oil prices and oil revenue” and their government budget has largely been based on crude oil prices of between $50 to $60 per barrel.

“So these countries still have current account surpluses at this level of oil prices,” she said.

Rossi also noted that once the global economy gets back on a recovery phase — either by 2010 or 2011, oil prices are expected to rise again with the tight demand from emerging economies. “There is every reason to believe Asia and emerging market economies will again be able to pick up and grow strongly from the same factors” that pushed them up in recent years, and similar patterns of growth will boost resources and energy demand that “will feed into the oil prices and revenues for the Gulf area,” she said.

Today, the six states that form the Gulf Cooperation Council — Saudi Arabia, Kuwait, Oman, Bahrain, Qatar and the United Arab Emirates — combined are worth around $1 trillion in terms of gross domestic product, putting them within the world’s top 10 economies, Rossi noted.

These economies should be considered as a group because of their structural similarities and because “they will behave in the same way as regards (to) their effect on the world economy,” she said.

While the presence of the Gulf economies is also growing in the global financial arena, their weakness lies in their lack of development in the bond market system, Rossi noted.

“I think this is a particularly difficult issue if you want to become a financial center,” she said.

The Gulf region and Asia need to create an alternative to the U.S. and European bond markets to match their rising wealth, she added.

Development of the bond market system in the Gulf as well as in Asia is also important in terms of having a more balanced financial system for the world economy, Subacchi told the audience.

“The global imbalance is still there. . . . We are still in a situation where there are parts of the world which save too much, and parts of the world where there (is) still too much consumption, and we have not found a way to resolve this issue,” she said.

The other imbalance, Subacchi said, is that there is “only one engine for the world economy — the U.S. economy.” Seeking answers from the incoming U.S. administration to revive American consumption as the driving force of global growth “will be an unsatisfactory solution because the risk is to create a kind of situation that generated the crisis, where there is too much consumption and too little savings in the U.S.,” she pointed out.

In the near future, the big question will be how the world will come out of this crisis, “but in the longer term we need to focus on how to resolve these imbalances,” she said.

———————–

Monday, Nov. 24, 2008, The Japan Times online.

THE VIEW FROM NEW YORK
Burst of U.S. bubble arouses old specters

By HIROAKI SATO
So the Nobel Prize-winning economist Paul Krugman has spoken: The “usual tools of economic policy — above all, the Federal Reserve’s ability to pump up the economy by cutting interest rates — have lost all traction” (”Depression Economics Return,” Nov. 14, The New York Times).

The article brought to mind my friend Takafusa Shioya’s conclusion in his book about the Japanese economic bubble that burst in 1989. Measures that had worked earlier did not work in dealing with the aftermath of the bubble. A top economic officer while in government, Shioya observed the policy struggle firsthand, often as part of it.

So, the worry now is that the United States might repeat the Great Depression. As this has come to the fore, the concern has receded that it might have to go through what Japan did after its bubble. Also, in place of the talk a few years ago of the onset of the decline of the American empire as President George W. Bush’s wars against Afghanistan and Iraq refused to go as planned, the talk today is of a “historic geopolitical shift” now that “the American free market creed has self-destructed.”

The latter judgment belongs to John Gray, a professor at the London School of Economics (”A shattering moment in America’s fall from power,” The Guardian, Sept. 28). I am in no position to pronounce anything as sweeping, but I was an eyewitness, in a way, of Japan’s economic rise and fall.

It is hard to remember this now, but in the 1980s Japan was depicted as an economic juggernaut about to swallow up the whole world, including the U.S. The most startling news still vivid in my memory was the Japanese purchase of the Exxon Building in late 1986 or, rather, the way The New York Times headlined this purchase on its front page. That building in Rockefeller Center — now simply identified by its street address — soars outside my window: My office is in the McGraw-Hill Building that stands right next to it.

When this was followed by the purchase of Rockefeller Center itself, it was as if the sky started to fall on Manhattan, nay, the U.S. of A. Saner voices said there was no need for the sky-is-falling talk because real estate investment simply means gaining the right to manage the property.

Still, there were self-mocking predictions that the star atop the famous Rockefeller Center Christmas tree would be replaced by the Mitsubishi logo, which, made up of three lozenges, looks like the atomic bomb shelter sign. Yes, the investor in Rockefeller Center was Mitsubishi Real Estate.

As fate would have it, I became the one to translate what I thought was Rockefeller Center’s last dunning letter to Mitsubishi. Mitsubishi was in arrears in paying monthly maintenance costs. When all the hoopla was over, the losses of Japanese investors in American real estate, it was said, went well beyond $1 trillion. But that was years later.

Japan’s economic insouciance was a spectacle to behold while it lasted. The rumor I heard later had it that Mitsui Real Estate, which bought the Exxon Building, did so without asking its price, while Mitsubishi bought Rockefeller Center (less than 40 percent of it, actually) simply out of rivalry.

The heading of a Time magazine article on the subject at the time caught the mood of the day very well: “I’ll Take Manhattan — and Waikiki.”

What enabled Japanese companies to behave like that? The bubble. There are a number of theories on what caused it. The majority seems to hold that it was prompted by the Plaza Accord of 1985 — an agreement to depreciate the dollar and appreciate the yen.

It worked wonders. The yen rose fast — from ¥221 to a dollar in 1985, to ¥160 in 1986, to ¥138 in 1987. That meant the prices of things in America were discounted by 40 percent for Japanese buyers in just two years. The Nikkei industrial average tripled in four years, from ¥13,113 in 1985 to ¥38,916 in 1989. Individuals became groggy. I heard a story of an ordinary Japanese citizen who bought an old castle in Germany.

There have been wild stories in America, too, of course, though I was mostly mesmerized by the improbable greed of corporate executives. One interesting thing, especially now that the American bubble has burst, is that “America has always had one economic policy for itself and another for the rest of the world,” as professor Gray puts it.

Examples are legion. Vis-a-vis Japan, the U.S. approach was dual. It preached the gospel of deregulation, even as it pressed for more regulation — both, where it suited itself.

In the meantime, the U.S. steadfastly deregulated. At the center of this deregulation was Alan Greenspan, chairman of the Federal Reserve Board from Presidents Ronald Reagan to George W. Bush. During his tenure spanning almost two decades, he remained a glad acolyte of Ayn Rand, refusing to regulate either derivatives or mortgage securitization.

The two “financial instruments” may best be described as sand castles built on sand castles.

Some Japanese economists who take the view that the Plaza Accord of 1985 triggered the Japanese bubble call its bursting a “money haisen,” the defeat in the money war. The metaphor is apt. The Japanese economy, halved from 1944 to 1945, did not recover to the 1944 level until 1952. In the decade of the 1990s that followed the bursting of the bubble the economy rose barely by 10 percent in real terms. In fact, the U.S. did far better during the decade of the Great Depression; its economy rose by a respectable 30 percent.

Unlike the Japanese bubble, the bursting of the U.S. bubble is having global consequences. The Nikkei industrial average is already back to where it was at the start of the 1980s. The decade in which Japan was dreaded as an economic juggernaut is now a vanishing dream.

Translator and essayist Hiroaki Sato’s most recent book is “Japanese Women Poets: An Anthology.”

Today is the Saturday of the Weekend of Twinning of Mosques and Synagogues in the US. The New York Synagogue and the Islamic Cultural Center of New York will have a dialogue, at the Synagogue, led by the Rabbi’s wife - Tobi Rubinstein Schneier on the topic - “Women in Judaism and Islam.” I am sure that the Islamic side will bring up the fact, that in their own way, the women are honored in the Islamic tradition like in the Mosaic tradition, but I am not sure that  the subject of the intrusion by the dealers in petroleum will come up.

Let us face the reality that it was the merchants in human flesh, that came by ship from far places, that created the market for exports of slaves from Africa, now it is the traffic of petroleum tankers that impacted the Muslim world, and those that did not want to see cultural foreign intrusion started to take it out against the sources of this intrusion. This is neither perpetuated by Africans, nor is it a rejection of the idea that money can buy power