IPD African Taskforce Meeting in Addis Ababa (Jul. 2008)
On July 10-11, Prof. Izumi Ohno and Kenichi Ohno attended the "Initiative for Policy Dialogue" African Taskforce Meeting in Ethiopia. This is an annual event organized by Prof. Joseph Stiglitz (Columbia Univ.) and supported by JICA. It discussed past policy failures, the need to broaden policy space, new possibilities based on East Asian experiences, etc. Participants included Prime Minister Meles Zenawi, Prof. J. Stiglitz, Prof. Mushtaq Kahn, Prof. S. Urata, and others.
Our presentation argued as follows. The development process is a complex mix of economics (what needs to be done) and politics (what can be done). The problem with traditional policy advice of IFIs (macro conditionality, transition strategy, governance, growth diagnostics, etc) is that it recommends desirable policies without seriously considering their political and administrative feasibility. Development succeeds only when what is desirable is carefully matched by what is possible in the right sequence in the actual political context of each country.
We recommend that development policy should mainly be built on perfecting one's unique strength rather than generally removing weaknesses and achieving average performance in everything. There should be goals, phased strategies and concrete actions. Donors should engage in long-term, open-ended policy dialogue with the government to discover such goals, strategies and actions.
Inflation and asset bubbles in Vietnam (May 2008)
Vietnam was an emerging tiger until last year. Now, it is facing a big macroeconomic problem with double-digit inflation (May 2008 - CPI inflation 25.2%), bubbles in stock and land markets, huge trade deficit and nervousness in the forex market. This overheating was caused by (i) huge inflow of external funds (remittances, FDI, ODA, portfolio); (ii) aggressive public spending policy; and (iii) supply shocks such as global commodity inflation, animal diseases and flooding.
The government is already taking contractionary measures on fiscal and monetary fronts. The stock market already popped, and the property market is falling. I hope the country can avoid the situation of the Thai baht crisis in 1997 but some observers say a crisis with large currency depreciation is inevitable. Others say it is hardly likely. I have written some pieces in English and Vietnamese about diagnosis, solutions, and possible lessons from the Asian financial crisis of 1997-98.
Inflation & asset booms (CIEM) Macro soft landing (Saigon Times)
Vietnam's new era and challenges for 2020 (Mar. 2008)
The Vietnam Development Forum, together with Vietnam's Institute of Economics, hosted a symposium on industrialization strategy toward 2020 on March 19, 2008 in Hanoi. Kenichi Ohno (VDF), Tran Dinh Tien (Inst. of Econ.) and Vu Thanh Tu Anh (Fulbright Economics Teaching Program) were the key speakers. A large number of eminent Vietnamese economists and commentators attended. Vietnam is growing fast and becoming a middle income country by 2010. At the same time, income gaps, inflation, traffic jams and environmental damage are emerging. To move from externally driven booms to internally generated growth, various policy shifts were proposed. K. Ohno emphasized enhanced cooperation between Vietnam and Japan to rapidly upgrade supporting industries, industrial human resources, and logistics. more
Book launch seminars in London and Washington (Mar. 2008)
The GRIPS Development Forum published the report, Diversity and Complementarity in Development Aid: East Asian Lessons for African Growth, a joint work with the Britain's leading ODA think tank, the Overseas Development Institute (ODI). Japanese, British, Ugandan and Malaysian authors contributed. The book launch seminars were organized in ODI (London) and the World Bank's African Department (Washington) where Izumi and Kenichi Ohno were the key speakers. The interest of the donor community is rapidly shifting from health and education to growth policy and growth diagnostics. To seize this opportunity, this report argues that Japan and the UK should work more strategically together to promote African growth based on industrialization. Although the two are very different donors, cooperation is all the more desirable because of their differences. download report
A proposal for invigorating Japan's aid in Africa (Feb. 2008)
Renovating Japan's aid in Africa is one of the issues that the GRIPS Development Forum (GDF) is tackling this year. Our activities include: (i) recruitment of Mr. Elumba Jean Denis Nkongolo. a citizen of the Democratic Republic of Congo, as a senior researcher (photo); (ii) organizing the non-government multi-stakeholder ODA forum; (ii) drafting Japan's ODA manifesto (private version); (iii) working with Japanese officials and African ambassadors in Tokyo; (iv) visiting Africa, UK, World Bank, etc. for policy discussion; (v) launching the Japan-UK report on aid complementarity for African development.
For Africa's industrialization, our proposal, which is basically the same as the proposal by the JICA-JBIC study group or the MoFA ODA Committee Report, is as follows:
(1) Concentrate Japan's additional aid to Africa on a few countries with good leaders, functioning economic administration, and strong will to learn from East Asia. Send a strong Japanese team to that country.
(2) Launch long-term policy dialog to understand each other (Japan/E Asia vs. targeted African country) and conduct works in preparation for drafting the Industrialization Strategy (learning the details of East Asian experience, manufacturing surveys, writing an issue report, a website, etc.)
(3) Joint drafting of the Industrialization Strategy by the country's selected team and the JICA team. The private sector (both local and FDI) should be consulted and deeply involved in this work.
(4) Mobilize private sector investments and ODA resources (Japan and other donors) to realize this Strategy.