Government and Taxes: Jeju Forum

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Tuesday, June 20, 2017

EFN Asia 65, EFN panel at Jeju Forum 2017

The Economic Freedom Network (EFN) Asia participated once more at the annual Jeju Forum for Peace and Prosperity, a big international conference held at Jeju Island, S. Korea. I am reposting this report submitted to the organizers within an hour after the panel discussion. Originally posted at the EFN website.

I add two photos here, taken from EFN's fb page. From left: Wan, John, Razeen, Young-Han.

This is 3,200+ words, 7 pages, enjoy.
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Session Outline

Name of Session: Asia’s Contribution to the Global Open Market

Session Organizer: Friedrich Naumann Foundation for Freedom

Date: 1 June 2017, 14.50-16.20

Moderator: Dr. John Delury, Associate Professor, Graduate School of International Studies,

Yonsei University

Welcoming Remarks: Dr. Lars-André Richter, Head

Friedrich Naumann Foundation for Freedom Korea Office

Discussant(s)

Dr. Razeen Sally, Associate Professor,

Lee Kuan Yew School of Public Policy, National University of Singapore

Wan Saiful Wan Jan, Chief Executive

Institute for Democracy and Economic Affairs, Malaysia

Dr. Kim Young-Han, Professor,

Department of Economics, Sungkyunkwan University

Summary of Presenters & Discussants’ Remarks

Dr. Lars-Andre Richter

Friedrich Naumann Foundation (FNF) is a German non-profit organization, founded in 1958 post-war West Germany. The main goal at the time was to help re-establish democracy in West Germany. Shortly after, FNF opened offices abroad, including in Tunisia, India and Indonesia. The office in Korea was opened in 1987. We promote liberty in Korea through a variety of programs including democracy building, projects with market economy, human rights, rule of law and also the re-unification issue, bringing in the unique German experience of re-unification. In fact, FNF has projects in both Koreas. The North Korea program started in 2004, focusing on economic policy. The session today at the Jeju Forum is hosted by both FNF and Economic Freedom Network Asia (EFN Asia), FNF support’s network of liberal minded think tanks and individuals.

Dr. Kim Young-Han

Threat of the Protectionism by the US Trump Presidency

- Why Protectionism by the Billionaire US President?

Trump thinks that the current format of ‘the Global Open Market System’is unbearable and unsustainable for the US blue collar workers. Are US blue collar workers simply irrational? No, they are absolutely rational.

- The US blue collar workers know that there is not and will not be an effective trade adjustment assistance system in the US. Winners get everything with no room for losers in global open market according to the US experiences. (The same with the Brexit case.)

- How much of a threat caused by the Trumpian Protectionism?

Very threatening and disastrous. If Trumpian Protectionism is spilled over to major trading countries, the global trade war is the next stage, just like the experience before the two World War. The current one-sided protective measures of the US are highly likely to provoke retaliatory measures from trading partners.

- Is Trumpian Protectionism Sustainable?

Not really, since it’s self-defeating. Why? The source of gains from free trade: Efficiency Gains via Reallocation of economic resource from inefficient sectors to efficient sectors. In the US, without the effective trade adjustment assistance mechanism, resources in the inefficient sectors became laid-off instead of being reallocated. What Trump tries to do is to keep inefficient sectors protected as inefficient, which is self-defeating and unsustainable. He suspects Trump will realize this after 3-4 years.

- Can other powers fill in the US role?

The Share in the Global Trade: EU takes roughly 40% of the world trade, followed by Asia which takes 33%, and North America (17%). If the US goes back to protective regime, it is bad, while the other players can keep the remaining 83% under free trade regime. The EU might play a more meaningful role in leading the global free trade regime and also Asian powers like China. But he does not think so.

- The requirements for the leadership the global free trade regime: Leader has to prepare itself and operate on a rule-based trade policy and National Treatment for all players (treat all players as domestic players). The EU is more prepared, but not China. Furthermore, Big Players with market power are likely to resort to bilateral arrangements based on one-sided bargaining power. Therefore, relying on a multilateral platform is better than relying on a big guy leading power. Rebuilding the Multilateral Free Trade Regime via WTO is the solution.

The Role of Asia in Rebuilding the Global Free Trade Regime

- Datawise, Asia takes significant market power, i.e. 33% of the global trade. Historically speaking, all Asian countries’ economies, such as Japan and South Korea, have emerged via the global free trade regime with no regret against the multilateral free trade regime, WTO. A multilateral free trade regime as WTO is welfare dominant to a single country leadership (by whether the US or China). Asia has kept the spirit of multilateral or plurilateral free trade regime via ASEAN and ASEAN+3, and even ASEAN +6. Asian economy with her complexity in terms of diverse stages of economic development and asymmetry of economic size and power works as a miniature of the global economy with gradual and sustainable unit of economic integration.

- Condition for “Sustainable Global Open Market System”

i) Effective Trade Adjustment Assistance Mechanism: Losers (i.e., workers in the importing competing sectors with comparative disadvantages) should be reallocated to Winners’ sectors (jobs in the export sectors with comparative advantages) via Effective Trade Adjustment Assistance Mechanism.

ii) Multilateral Free Trade Regime with strong surveillance and reputation building mechanism with respect to the Big Guys with market power.

Dr. Razeen Sally

He has three main points to make. First, where we are in the global economy, particularly on trade. Second is on protectionist threat. Third is on what can be done in and by Asia to keep the market open.

- Where are we in the global economy?

Economic globalization has not been reversed, since the global financial crisis, but it has stalled. There has been a global growth slowdown. Trade to GDP worldwide has not increased, since about 2006. Foreign direct investment flow has decreased, since the crisis Cross-border flow of finance has Decreased considerably, as expect from the global financial crisis.

- But particularly on trade, something unusual is going on. Since the beginning of 19^th century until 2008, world trade grew faster than world output, which is the indication that trade is the engine of growth. But since 2012 until the end of 2016, trade growth barely kept pace with world GDP growth at about 3 percent or less. This is highly unusual and tends not to happen except in war and deep recession. This is particularly worrisome for Asian nations, whom depend on exports. But still too early to tell if this is a new trend.

BWorld 64, The WTO and trade agreements

* This is my article in BusinessWorld last June 13, 2016.

Free trade means free individuals and a free society.

People who cannot find certain goods and services at specific quality from local producers given their limited personal or household budget may be able to find those from foreign producers. And people who cannot sell their products or services to local buyers may find those buyers abroad.

And this highlights the beauty of free trade: No trade will occur unless both parties, the buyer and seller, will benefit. There are losers and gainers in free trade of course, the same way that there are losers and gainers in no trade (autarky) or restricted trade. Overall, there are “net gains” in free trade where the advantages outnumber the disadvantages.

Global free trade is supposed to be facilitated by the World Trade Organization (WTO) when it was created in 1995. But 21 years later, this is far from happening.

Regional trade agreements (RTAs) and even trans-continental agreements were invented such as the ASEAN Free Trade Area (AFTA), Regional Comprehensive Economic Partnership (RCEP), and the Trans-Pacific Partnership (TPP).

This topic was discussed during the recently concluded big annual international conference, “Jeju Forum for Peace and Prosperity 2016,” held in Jeju, South Korea. The forum also had a panel that had the theme, “Trans-Pacific Partnership: an Assessment of its Political Economy” sponsored by the Friedrich Naumann Foundation for Freedom (FNF) and the Economic Freedom Network Asia (EFN Asia) last May 26, 2016.

The discussion moderator was Dr. John Delury, Associate Professor at the Graduate School of International Studies, Yonsei University, Seoul, South Korea. The discussants were Dr. Sethaput Suthiwart-Narueput, Executive Chairman of the Thailand Future Foundation (TFF), Kwon Tae-shin, President of the Korea Economic Research Institute (KERI) in Seoul, and Dr. Keisuke Iida, Professor at the University of Tokyo Graduate Schools for Law and Politics, Japan. The opening remarks was given by Dr. Lars-Andre Richter, Resident Representative of FNF Korea Office.

Panel Rapporteur was Pett Jarupaiboon, who is also the also the Program Manager of EFN Asia, based in Bangkok, Thailand. Pett shared his notes with me.

The three discussants are all liberal economists and are pro-free trade, pro-WTO, but they disagree and debate on the role of the TPP.

In particular, Mr. Kwon and Dr. Iida were critical of the WTO because of the lack of progress in global free trade. Dr. Sethaput argued that RTAs like TPP would undermine the progress of the WTO.

Here are the main arguments of the discussants.

(1) Mr. Kwon, KERI, South Korea. TPP members will enjoy an increase in exports and income from an enlarged market size, and they will also enjoy more consumer welfare due to a decrease in import prices and intensive competition. According to a recent study by the Peterson Institute for International Economics, if TPP takes effect in 2017, the GDP of TPP member countries is likely to increase by 0.5%-8.1% in 2030, compared to the GDP forecast in an event of non-adoption of TPP.

(2) Dr. Iida, Univ. of Tokyo, Japan. TPP has a rule-making function, and these rules as provided in international relations as well as who wrote them are important issues. For the US, joining TPP is part of a larger strategy of “pivoting” to Asia or rebalancing to Asia. The US was preoccupied with the wars in Afghanistan and Iraq and was not paying enough attention to Asia. Therefore, TPP was part of the toolkit to achieve this new policy for the Obama Administration. For Japan, which has to rely on the US for security, TPP meant mending the fences with the US following a series of recent frictions including the planned relocation of one of the most important marine bases in Okinawa to outside Okinawa.

He added that TPP is seen to benefit Japan, projected at 2.6% of GDP (accordingly to the Cabinet Office), a significant number considering that its potential growth rate minus TPP membership is mere 0.5%.

(3) Dr. Sethaput, TFF, Thailand. A multilateral system with non-preferential treatment covering many countries like the WTO is better than mega-regional trade regimes like TPP and RCEP. Why?

(a) TPP is subject to the usual problems of trade diversion: increased trade among members, lesser trade with non-members.

(b) TPP is not just about trade, it also includes other issues like investor and intellectual property protection, labor and environmental standards, etc.

(c) The investor-state dispute settlement (ISDS) mechanism provides international arbitration that benefits US corporates. The US Trade Representative notes on its Web site that “the United States has never lost an ISDS case.”

(d) RCEP is a better alternative, has less non-trade baggage, uses the best elements of the multilateral system, like WTO dispute settlement, TRIPS (Agreement on Trade-Related Aspects of Intellectual Property Rights).

(e) Ultimate goal should be the Free Trade Area of the Asia-Pacific, which includes all the existing members of APEC including China and Russia. This can be achieved through either expanding the TPP or merging TPP and RCEP.

Personally, I believe that the best trade policy is unilateral trade liberalization. Be friends to all countries and economies who can bring in the best products and services at best qualities and at the best or most competitive prices into our shores and shops. This will bring down the cost for all local manufacturers in need of cheaper capital goods, cheaper raw materials, and intermediate products, which will result in cheaper production processes. Local consumers will also benefit for obvious reasons. And those countries will likely return the favor with zero or very low tariff for Philippine exports too.

Since this is far from happening, the second best policy is multilateral and global free trade. This is not happening too. So the third best policy is joining mega-RTAs like the TPP and RCEP. The worst policy of course is autarky or no trade, or even very restricted trade.

The Philippines and all ASEAN members are already RCEP members. The Philippines should proceed applying for TPP membership. The dreaded provision ISDS is actually important and useful. It simply protects foreign investors who come to other TPP member-countries based on TPP rules, when other member-countries will suddenly change the rules midway. The ISDS in effect will help prevent members from arbitrarily changing rules on trade, investments, IPR, competition and other policies.

Bienvenido S. Oplas, Jr. is a Fellow of SEANET, President of Minimal Government Thinkers, which is a member of EFN Asia.

minimalgovernment@gmail.com

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Tuesday, June 14, 2016

EFN Asia 61, Panel on TPP at Jeju Forum 2016

Reposting this Rapporteur's report of the EFN Asia panel discussion at the Jeju Forum for Peace and Prosperity 2016, published at the EFN website. Pett Jarupaiboon was the panel Rapporteur.
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EFN ASIA AT JEJU FORUM 2016: TPP AND ITS POLITICALECONOMY

Monday, 13 June 2016

The Jeju Forum for Peace and Prosperity (Jeju Forum) addresses stability and security issues in Asia through international cooperation and the participation of various leading think tanks, academics, and leaders in the field. An annual event, the forum brings together thousands of participants from all over the world to the International Convention Center in Seogwipo on the beautiful island of Jeju.

The Economic Freedom Network in Asia (EFN Asia) with support from the Friedrich Naumann Foundation for Freedom (FNF) co-hosted a panel discussion at this year’s event (May 25-27, 2016) titled “The Transpacific Partnership (TPP): An Assessment of its Political Economy on the occasion of this year’s Jeju Forum for Peace and Prosperity”.

The Panel was moderated by Dr. John Delury, Professor at Yonsei University, Seoul. The discussion brought together venerable experts in the field: Kwon Tae-Shin, President of Korea Economic Research Institute and Former Minister of the Prime Minister’s Office; Dr. Iida Keisuke, Professor at University of Tokyo, Graduate School of Law and Politics; and Dr. Sethaput Suthiwart-Narueput, Executive Chairman of the Thailand Future Foundation. Prior to the the panel discussion, H.E. Rolf Mafael, German Ambassador to South Korea gave his opening remarks and congratulatory speech.

It has been a long tradition for EFN Asia with the support of FNF to host a session at Jeju Forum. Besides the participation of global leaders in both the public and private sectors, one of the main highlights of this year’s forum was also the presence of Ban Ki-Moon, Secretary General of the United Nations as a keynote speaker at the main opening session.

The Trans-pacific Partnership (TPP) is the biggest free trade bloc accounting for 40 percent of global GDP and one-third of world trade. It was launched last year amidst both hope and skepticism as it poses economic opportunities as well as political and social challenges. In addition to removing traditional trade obstacles at an unprecedented level, the agreement goes much broader to embrace contentious issues including the environment, intellectual property and the investor-state dispute settlement. Additionally, as often is the case with free trade agreements (FTAs), there are important US geopolitical objectives towards Asia.

While most liberal economists generally support the concept of free trade, viewpoints on TPP can differ as the panel discussion elucidated. While it can be viewed that the World Trade Organization (WTO) plays a significant role towards the progress/acceptance of TPP, some of the criticisms towards WTO has been their lack of progress on a similar front. Contrastingly it was argued that reservations toward TPP stems from the fact that preferential agreements like this would undermine the progress of WTO.

According to Mr. Kwon Tae-Shin, TPP members will enjoy an increase in exports and income from an enlarged market size, and they also will enjoy more consumer welfare due to a decrease in import prices and intensive competition. A recent study by the Peterson Institute for International Economics projected that if TTP takes effect in 2017, the GDP of TPP member countries will likely increase by 0.5~8.1% by 2030, compared to the GDP forecast in an event of the non-adoption of TPP.

Dr. Keisuke mentioned that President Obama emphasized the rule-making aspect of TPP. Certainly, what kind of rules we have in international relations and who gets to write these rules are very important issues, and hence, this rule-making aspect of TPP is certainly important. For the United States, joining TPP is part of a larger strategy of “pivoting” to Asia or rebalancing to Asia. There was recognition that the United States was preoccupied with the wars in Afghanistan and Iraq and was not paying enough attention to Asia. Therefore, TPP was part of the toolkit to achieve this new policy for the Obama Administration. For Japan, who relies on the United States for security, TPP meant mending the fences with the United States following a series of recent frictions, including those arising from the planned relocation of one of the most important marine bases in Okinawa to outside Okinawa. From an economic perspective, TPP will significantly benefit Japan as well. The economic benefits, which amount to 2.6% of GDP (accordingly to the Cabinet Office), are a significant payoff to a country whose potential growth rate is a mere 0.5%.

Dr. Sethaput expressed his support for a multilateral system with non-preferential treatment like the WTO to mega-regional trade regimes like TPP and RCEP. He argued that when talking about the pros and cons of TPP, it is important to distinguish whether we are talking about the region as a whole or individual countries. While individual countries in the region can and do benefit from preferential access under TPP, most countries in the region as a whole—especially the developing ones—would be collectively better served by greater progress in multilateral liberalization under the WTO. This is due to several reasons. First, TPP is a preferential trading arrangement, and therefore subject to the usual problems of trade diversion. Second, TPP is not just about trade, but has a whole lot of other issues included (investor and intellectual protection, labor and environmental standards, etc.), a lot of which are not necessarily in the interests of developing countries. Third, they have less bargaining power, as reflected by the sequential bargaining approach taken by the United States in its negotiations as well as some of the features of the agreements on standards and dispute settlement.

Undoubtedly, TPP will significantly increase trade between its members. However, it is worth noting that the benefits gained by each member country will be much different. The effects it has on non-members are also significant. Taking Japan’s example, TPP meant mending with the United States. There were strains in the U.S.-Japan relations from 2009 to 2010, involving the relocation of one of the most important marine bases in Okinawa to outside Okinawa. This issue infuriated some policymakers in the U.S. government, and their bilateral relations faced a crisis. However, strengthening a relationship with an ally comes with some costs, especially for those countries that are outside this agreement. Putin is said to be very critical of TPP.

As far as trade is concerned, there is no inherent trade-off between different trading arrangements. Japan and ASEAN countries are still negotiating RCEP in good faith, and no one has so far turned their back on the RCEP. Inevitably, the degree of trade opening through RCEP will be lower than that achieved through TPP, but still it is worth trying. Eventually, our ultimate goal should be the Free Trade Area of the Asia-Pacific (FTAAP), which includes all the existing members of APEC. And this could be achieved through either an expansion of TPP or the merging of TPP and RCEP. At this point in time, it is hard to say which is more likely. Concerning WTO, on the one hand it has had a salutary impact on the global trading system. Legally, it is most advanced. Also, the dispute settlement system it possesses is very valuable. On the other hand, it has had a very poor track record in facilitating trade negotiations and how to bring the Doha Round to a satisfactory conclusion without incurring a reputation that it ended in a failure is a big question to consider.

Thailand, according to Dr. Sethaput, has the unfortunate distinction of being the country that is usually estimated to lose out the most from not being in TPP, but the losses are not that huge: around 0.9% of GDP cumulatively through 2030, or a CAGR of less than 6 basis points. Most of the potential gains from joining are on the trade front and the improved market access for Thailand from TPP is not that significant. First, Thailand already has FTAs in place for 75% of the trade it does with TPP countries. The countries Thailand does not have FTAs with include the United States, Mexico, and Canada, and these three collectively account for about 10% of it exports. Second, tariffs on many of the things Thailand export to the United States are not that high to begin with. Third, the reduction in tariff and non-tariff barriers in the United States under TPP for key export categories for Thailand will not be that rapid, if what was offered to Malaysia is any indication (e.g., 0% in autos in 10 years). The possible indirect benefits to FDI are probably more important but also more difficult to assess.

Dr. Sethaput also pointed out the less visible costs, especially in the investor-state dispute settlement (ISDS) mechanism. Under TPP, the ISDS provides international arbitration in the way that benefits US corporates. The US Trade Representative (USTR) notes on its website that “the United States has never lost an ISDS case.” Issues like fairness and equal treatment under the law are sensitive ones. Excessive corporate recourse to arbitration has already started to raise concerns in domestic court cases in the United States. In relation to WTO, he argued that the world as a whole would be much better served by greater progress under WTO. But mega-regional trading agreements (RTAs) like the TPP or RCEP undermine the multilateral trading system. We decide to participate in RTAs because we cannot conclude Doha, and we cannot conclude Doha because we decide to participate in RTAs. Also, even if one believes that WTO is dead and that RTAs are the only game in town, RCEP is a better alternative. It is the one loaded with much less non-trade baggage and at the same time, making the best use of the best elements of the multilateral system (e.g. WTO dispute settlement, TRIPS). At the very minimum, this would help to enhance limited bargaining power that countries have under TPP.

Turning to Korea, according to Mr. Kwon Tae-shin, export is an essential element to sustain the Korean economy. Korea’s dependence on exports (exports/GDP) was 53.9% as of 2013, nearly twofold the average of OECD, which stood at 28.7%. Its dependence on foreign trade was also 102.8% as of 2013, which was significantly above the average of OECD: 57.7%. It is necessary for Korea to expand its trade through international agreements such as TPP. The negative effects of non-participation in TPP are greater than participation. Especially, it may possibly leave Korea behind in competition with Japan, which is a TPP member country and one of Korea’s main rivals in various manufacturing industries. Additionally, TPP pursues high standard FTA, and it strictly complies with international norm including anti-corruption, institutional transparency, investment & the protection of intellectual property, labor & environment related rules, etc. Those requirements actually make developing countries reform their local laws and institutions and accept global standards, which will become institutional strength of those developing countries in the long run.

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See also:
EFN Asia 22: Dealing with Economic Nationalism, Jeju Forum 2013, June 03, 2013
EFN Asia 38: Report on Globalization and Inequality, Jeju Forum 2014, June 02, 2014
EFN Asia 48: Report on Free Market Environmentalism, Jeju Forum 2015, May 29, 2015
EFN Asia 54, Sethaput Narueput on economic freedom and poverty, December 16, 2015
EFN Asia 60, Conference 2014 in Hong Kong, part 5, April 03, 2016

Friday, May 29, 2015

EFN Asia 48: Report on "Free Market Environmentalism"

Last week, Economic Freedom Network (EFN) Asia and Friedrich Naumann Foundation for Freedom (FNF) participated at the Jeju Forum for Peace and Prosperity 2015, with its own session about free market environmentalism, held last May 21 afternoon.

Welcoming Remarks were given by Rolf Mafael, German Ambassdor to S. Korea, and Siegfried Herzog (speaking in this photo), FNF Regional Director for Southeast and East Asia, based in Bangkok, Thailand.

Session speaker was Dr. Oyun Sanjaasuren, President of the UN Environmental Assembly; Former Minister, Mongolia’s Ministry of Environment and Green Development.

Panelists were:

(a) Henning Hoene, Member of Parliament, North Rhine-Westphalia; Spokesperson for Climate & Environmental Protection, Nature Conservation and Consumer Protection,

(b) Sunil Rasaily, Founding Partner, QED Consulting Group, Bhutan; and

Moderator was Matthias Grabner of the Austrian Chamber of Commerce in S. Korea.

Photo below, from left: Sungho (hidden), Rasaily, Hoene, Sanjaasuren, and Grabner.

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Rapporteur’s Report

by Miklos Romandy, FNF Southeast and East Asia office, Bangkok

Session 4-C: “Free Market and Environmentalism: Why They Should Love Each Other”

- The world population stands at about 7 billion today. The UN predicts that by mid-century it will have grown to more than 9 billion. This will lead to an immeasurable growth in resource consumption and put significant pressure on the planet. If this trend continues then “business as usual” has to be changed in order to sustain further growth.

- The Asia-Pacific region consumes more than 50% of the world’s resources and is responsible for more than 50% of world-wide emissions.

- It is important to keep in mind that pollution “knows no boundaries”. Therefore, environmental protection has to be viewed as a global concern that can only be achieved through international cooperation, using the most efficient means.

- Keywords: resource consumption, pollution, environmental protection, cooperation,

(Policy Suggestion & Lessons)

- The role of governance (e.g. through regulations or incentives) is very important in succeeding to protect the environment and bring about sustainable development. But lasting success can only be achieved if businesses embrace sustainable practices. This is where free market practices come in. A good example is the European Union Emission Trading Scheme because it is an incentive for businesses to be more efficient and clean.

- To achieve environmental protection solely through regulatory means can be problematic, for example in developing countries where extractive businesses (e.g. mining) are often state-owned. This leads to the government’s being both a regulator and an operator (through ownership) and therefore to a conflict of interest.

- Environmental protection can therefore be better achieved by a market-based approach, meaning that businesses should be given the incentive to regulate themselves. Market forces compel businesses to become more efficient and less wasteful. This argument is supported by a recent study by the Heritage Foundation which shows the clear correlation between economic freedom and environmental protection. Economically free countries perform better when it comes to environmental protection.

- Market-based approaches to environmental protection should be supplemented by regulatory measures only where it is necessary for governments to step in.

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Below, from left: ???, Lars-Andre Richter, FNF Country Director for S. Korea, Sungho, Pett Jarupaiboon, EFN Asia Program Manager in Bangkok, Sanjaasuren, Ms. Kim of FNF-Korea, Hoene, Rasaily, Herzog, Grabner, and Miklos Romandy.

Thanks to Pett for sending me the report. All photos here are from the FNF regional office's facebook page. The Rapporteur's Reports in the past two EFN Asia sessions are here:

Jeju Forum 2013: Dealing with Economic Nationalism, June 03, 2013
Jeju Forum 2014: Globalization and Inequality, Jeju Forum 2014, June 02, 2014

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See also:

EFN Asia 44: Day 2 of Conference 2014, November 10, 2014

EFN Asia 45: Growth, Inequality and the Philippines, November 14, 2014

EFN Asia 46: A Young Korean's Reflections of Conference 2014 in Hong Kong, February 10, 2015
EFN Asia 47, Participation in Jeju Forum 2015, May 08, 2015

Friday, May 08, 2015

EFN Asia 47: Participation in Jeju Forum 2015

The Economic Freedom Network (EFN) Asia and the Friedrich Naumann Foundation for Freedom (FNF) will participate once again in the big annual international conference in Korea, the (10th) Jeju Forum for Peace and Prosperity, May 20-22, 2015.

Although Jeju Forum was first organized in 2001, EFN Asia participated for the first time only in 2013 by having its own panel discussion, "Dealing with Economic Nationalism". I was part of the contingent, as Panel Rapporteur. Then EFN participated again last year, its panel discussion was about "Globalization and Inequality".

This year, the overall conference theme will be "Towards a New Asia of Trust and Harmony" and EFN's panel discussion will be on "Free Market and Environmentalism: Why They Should Love Each Other".

As the title suggests, the EFN session will look into ideas and movements that have promoted free market principles and schemes as the best way to conserve the environment. Free market environmentalism can be a good way to address environmental degradation rather than direct government involvement. How?

Via clear property rights delineation and protection, which mitigates the ‘tragedy of the commons’ problem. A poor villager enters a non-guarded public forest land and cuts trees, big and small, that he can haul and transport. The land and the trees in it belong to everyone and no one in particular, so if he does not cut and get those trees today, someone else will cut them tomorrow or next week. And that is how many public forest lands in developing countries with weak rule of law and property rights protection, become bald and degraded.

The "meat" of Jeju Forum is the many simultaneous panel discussions that participants can choose to attend. Normally about six different topics are discussed, same time at six different discussion or meeting rooms. The EFN panel will be on May 21, 3:40-5 pm.

The Panel Moderator will be Matthias Grabner of the Austrian Chamber of Commerce in S. Korea. Welcoming Remarks will be given by Rolf Mafael, German Ambassdor to S. Korea, and Siegfried Herzog, FNF Regional Director for Southeast and East Asia.

Keynote speech will be given by Dr. Oyun Sanjaasuren, President of the UN Environmental Assembly; Former Minister, Mongolia’s Ministry of Environment and Green Development; and currently the Chairperson of the Council of Asian Liberals and Democrats (CALD).

The panelists will be

(a) Henning Hoene, Member of Parliament, North Rhine-Westphalia; Spokesperson for Climate & Environmental Protection, Nature Conservation and Consumer Protection,

(b) Sunil Rasaily, Founding Partner, QED Consulting Group, Bhutan; and

The panel Rapporteur will be Miklos Romandy, Regional Programme Coordinator for FNF Southeast and East Asia.

There are plenary sessions with some big name speakers, usually former heads of states. The following are among the plenary speakers, including luncheon or dinner speakers.

This year is the 70th anniversary of the end of World War 2. People now are busy talking about trade and investments, jobs and entrepreneurship, tourism and cultural exchanges, mobile phones and other gadgets, and so on. Wars and invasion of other countries or territories are far out from their minds. Only current dictators, would-be-dictators, and lovers of more government coercion are talking about wars and invasions.

Peace and Prosperity. Around the world.

They are noble goals that responsible governments, industrious people and useful civil society organizations like EFN Asia and FNF should continue to assert. The Jeju Forum is a good platform for such useful and productive discussions. I am happy that EFN continues its participation in this important annual international conference.
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See also:
EFN Asia 22: Dealing with Ecgeonomic Nationalism, Jeju Forum, June 03, 2013
EFN Asia 23: More Photos at Jeju Forum, June 06, 2013
EFN Asia 37: Jeju Forum 2014, On Globalization and Inequality, May 29, 2014
EFN Asia 38: Report on Globalization and Inequality, Jeju Forum 2014, June 02, 2014
EFN Asia 46: A Young Korean's Reflections of Conference 2014 in Hong Kong, February 10, 2015

Monday, June 02, 2014

EFN Asia 38: Report on Globalization and Inequality, Jeju Forum 2014

This is the Rapporteur's Report for the panel discussion sponsored by Economic Freedom Network (EFN) Asia last May 29, 2014, at the Jeju Forum for Peace and Prosperity, Haevichi Hotel & Resort, Jeju island, S. Korea. Thanks to Pett Jurapaiboon, EFN Asia Regional Program Officer, for sharing this with me.

I am adding photos from the FNF East and Southeast Asia fb page. In this photo, from left: Peter, Sethaput, Dep. Minister Dang, Choi.

Name of Session	Globalization and Inequality	Session Number	p46
Time	15:40–17:00	Room	5-F

Moderator: Prof. Dr. Stella Quimbo, Professor, University of the Philippines

Presenter: H.E. Dang Huy Dong, Deputy Minister, Ministry of Planning and Investment, Vietnam

Discussants:

1. Prof. Dr. Choi Byung Il, Ewha Womans University, Korea,

2. Dr. Sethaput Suthiwat-Narueput, Executive Chairman, Thailand Future Foundation,

3. Peter Wong, Executive Director, The Lion Rock Institute, Hong Kong

Keywords:

Robin Hood Tax (Take it from the haves, transfer it to the have-nots), income of labor vs. income of capital, Doha Round, high-tax countries such as the Scandinavian ones, difference between inequality and poverty, welfare society, inequality of justice and of opportunity, sense of fairness, tradable and non-tradable sectors, “To big to fail”, inclusivity, Good governance, transparency, Piketty-Phenomenon

Opening remarks by Dr. Rainer Adam (RA), Regional Director of the Friedrich Naumann Foundation for Freedom, Bangkok:

According to RA the fundamental value of liberalism is freedom. He criticizes Thomas Piketty whose suggestion of a global tax on wealth to solve the problems of inequality (i.) he calls a “Robin Hood tax”.

Congratulatory speech by Rolf Mafael (RM), German Ambassador to the ROK:

Amb. RM points out that the session’s topic has two dimensions: a domestic one and an international one. He refers to a recently published study of the German Bertelsmann Foundation on i.. His suggestion to reduce it: to promote the integration of more countries in the global economy by completing the Doha Round.

- Name of Presenter: Dang Huy Dong (DHD)

- Synopsis: Globalization (g.) is the process of international integration arising from the interchange of world views, products, ideas, and other aspects of culture. There are many reasons for economic inequality within societies: of bad schools, single motherhood, "de-industrialisation", bad behavior by poor young men etc. G. however can decrease inequality. Having joined the global labor force, hundreds of millions of people in developing countries have won the chance to escape squalor and poverty. Regarding this, Southeast and East-Asia as a region which has benefited tremendously from g., should play a much stronger advocacy role for freer market and more g.

- Name of 1^st Discussant: Choi Byung Il (CBI)

- Synopsis: The absolute number of the world’s poor has stopped rising since 1950s and has fallen in recent decades, thanks to the rapid growth in emerging economies, most notably China and India. People climbed their social ladders from the poor to the middle class, and to the rich. This process continued to work its way, and helped to diminish inequality in a national economy. CBI reminds not to mistake inequality for poverty. Moreover he emphasizes that the aim of a society can’t be equality. Politics should now design a financial system to ensure that an economy does not become hostage to the big financial institution. As witnessed in the 2008 crisis, ‘privatization of success, and socialization of failure’ is against market principle.

- Name of Discussant: Sethaput Suthiwat-Narueput (SSN)

- Synopsis: There is no better argument that g. is beneficial than to compare South- with North-Korea. I. has often little or nothing to do with g.. Differences in income stem largely from things like access to quality education. An even bigger problem than the i. of income is the one of justice. In Southeast Asia for example, wealth has tended to be concentrated in non-tradable or highly regulated sectors. By opening up these sectors to greater competition, g. could help create a more level playing field. The best instruments to reduce i.: the fight against corruption, the liberalization of the market and the strengthening of the rule of law.

- Name of Discussant: Peter Wong (PW)

- Synopsis: There have often been attempts to eliminate inequality, for example the extreme form of egalitarianism in Mao’s China. All failed while the world over the past 60 years has seen inequality declining. A hot topic of the discussion on g. are the low skilled workers. How to protect them -who already have enjoyed basics like uninterrupted electricity supply, clean water, shelters, more than adequate protein intake- in the developed world? Is it justifiable and moral to reverse globalization such that the end result is sending back little girls in Indian, for instance, from factories back to brothels? In general: The Scandinavian system of social welfare often serves as a role model. But according to PW Asian countries can’t adapt than.

- Q1 (Name of Questioner): How could the respective countries of the speakers make the best use out of the g.? (Stella Quimbo, SQ. The question goes to the whole panel.)

- A1 (Name):

According to CBI the ROK has a very restricted labor market. Conflicts between management and trade unions are the normal case. Moreover the outgoing investment is bigger than the incoming. G. has been accepted as the engine of the economic success for a long time. That feeling is coming to an end.

DHD stresses that the government must ensure that people have access to opportunities. The keyword is inclusivity which for him is a precondition to avoid inequality. Other keywords are Good governance and transparency.

For SSN the crucial point is the access to education. Moreover he deplores that the financial situation of Thailand’s MPs is much better than the one of the people they represent.

PW claims to reduce the number of market regulations effected by the state.

- Q2 (Name of Questioner): Your comments on Thomas Pikatty’s demand for a global tax on wealth? (SQ)

- A2 (Name): Too complicate! (DHD) A stupid idea! (SSN) Already his diagnosis is wrong! (PW)

Rapporteur Dr. Lars-André Richter

Affiliation/Title Friedrich Naumann Foundation for Freedom,

Resident Representative

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Peter Wong, in one of the official dinners at the Forum. Former Australia PM Julia Gillard joined them in the table.

See also:
EFN Asia 22: Dealing with Economic Nationalism, Jeju Forum, June 03, 2013

EFN Asia 34: Chatib Basri on Subsidy and Protectionism for the Poor, January 25, 2014
EFN Asia 35: Rainer Adam and Economic Freedom in Asia, March 11, 2014

EFN Asia 36: Pett J and Secretariat Work, April 25, 2014
EFN Asia 37: Jeju Forum 2014, On Globalization and Inequality, May 29, 2014

Globalization, Mobility and Inequality, February 18, 2014

Thursday, May 29, 2014

EFN Asia 37: Jeju Forum 2014, On Globalization and Inequality

For the second time, Economic Freedom Network (EFN) Asia participated in the Jeju Forum for Peace and Prosperity annual conference, held at the southern island-province of Jeju, South Korea. This year's conference ran from May 28-30 with the theme, "Designing New Asia."

Below is the group photo of EFN delegates to the 2014 Forum. From left: Lars Andre Richter, Country Director of the Friedrich Naumann Foundation for Freedom (FNF) for South Korea, Dr Sethaput from Thailand, Sungeun Lim of FNF Korea, Dr Stella Quimbo of the Foundation for Economic Freedom (FEF) in the Philippines, Rainer Adam, the outgoing FNF Regional Director for East and Southeast Asia (he's moving to head the FNF Regional office for East and Central Europe next month), Peter Wong of Lion Rock Institute (LRI) in Hong Kong, Miklos Romandy of FNF Regional Office in Bangkok, and Pett Jurapaiboon, the Regional Program Office of EFN Asia.

Not in the picture but part of the EFN delegation are Dr Choi Byung-il from Korea, and Vietnamese Deputy Minister, Dang Huy Dong.

In the Jeju Forum 2013, this is the EFN delegation, below. From left: Sungeun Lim of FNF Korea, me, Ms. Kim also of FNF Korea, Wan Saiful Wan Jan of IDEAS (Malaysia), Lars Andre Richter, Pham Chi Lan (Vietnam), Feng Xingyuan (China), Tricia Yeoh (Malaysia), Pett, Barun Mitra (India), Miklos Romandy (Austria), Liu Junning (China). Not in the photo with our group was Sam Raimsey (Cambodia) and Dr. Choi Byung-il, they went somewhere when the photo was taken.

Dr. Rainer Adam gave the opening message for the EFN session today on "Globalization and Inequality".

The EFN panel of speakers and discussants. Peter Wong was the panel moderator while Deputy Minister Dong was the main speaker.

Last year, this is our panel. Wan Saiful was the panel moderator and Sam Raimsey (3rd from left) was the main speaker. Lars gave the opening message while German Ambassador to S. Korea, Rolf Mafael (5th from left) gave the closing remarks. I was the panel rapporteur, I was sitting and listening to the discussion including the open forum and I took this photo :-). Here is my Rapporteur's Report of our panel, "Dealing with Economic Nationalism".

Good audience in the EFN panel discussion today.
All photos today from Miklos and Pett.

I will post here the Rapporteur's Report for the EFN panel 2014 once I get a copy. Meanwhile, globalization and inequality was also discussed in one of the threads in the facebook group, Government and Taxes, Liberty and Responsibility. I wrote the following:

* Inequality is inevitable. And a good thing too, it penalizes laziness and irresponsibility with poverty, while it rewards hard work and efficiency with prosperity. Nature-made catastrophe like volcanic eruption, strong earthquake, heavy flash flood, which damage or wipe out important investments like a farm, house, factory, etc., there are various layers of safety nets and solidarity coming, like donations (public and private), reconstruction of public facilities like roads, bridges, drainage. So that nature-created poverty can be quickly addressed.

* The degree of inequality around the world has increased but the material condition of the poor has also increased or improved. One proof: Before, the Filipino poor were riding bicycles or carabaos or horses. Now the poor ride motorcycles. Before, the Filipino poor or even middle class could not afford to have cell phones. Now the poor have smart phones, some even own tablets. Another proof is rising life expectancy. Before, Filipinos on average die at age 50, 60 years old. As of 2009 or 2010, the average life expectancy of Filipinos was 69 years old (67 for males, 72 for females). By now I think average life expectancy is already 70.

* If there is no inequality, people in many countries will be equal... equally poor and destitute. ala N. Korea.

* One chart from John Stossel here. Global poverty in absolute number is high because global population is rising. But global poverty (then defined as earning $1 a day/person) as percent of global population is declining. But the UN and the multilaterals keep saying "poverty remains high and alarming", they changed the definition of poverty to earning $2 a day/person.

* Governments and the multilaterals are dishonest in discussing poverty. If they want more money from taxpayers, they say "poverty remains high, very alarming", things they were saying 6 decades ago or more. When they want to brag about their "accomplishments", they say that "poverty has declined but there are challenges".

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See also:
EFN Asia 22: Dealing with Economic Nationalism, Jeju Forum, June 03, 2013
EFN Asia 23: More Photos at Jeju Forum, June 06, 2013
EFN Asia 24: Jim Rogers talk at Jeju Forum, June 10, 2013

EFN Asia 33: Bibek Debroy on Property Rights, January 23, 2014

EFN Asia 34: Chatib Basri on Subsidy and Protectionism for the Poor, January 25, 2014
EFN Asia 35: Rainer Adam and Economic Freedom in Asia, March 11, 2014

EFN Asia 36: Pett J and Secretariat Work, April 25, 2014

Friday, April 25, 2014

EFN Asia 36: Pett J and Secretariat Work

I have written a number of papers about the Economic Freedom Network (EFN) Asia, especially its annual conferences in different cities in Asia. Such big regional event for many independent think tanks and academics is made possible not only by the financial support of the Friedrich Naumann Foundation for Freedom (FNF) but also by the hard work put by the EFN Secretariat staff.

The head of the Secretariat is the Regional Program Officer for EFN, Pett Jarupaiboon. Photo, Pett talking to Fred McMahon of Fraser Institute (Canada) during the EFN 2013 Conference in Bangkok last year.

Pett joined the FNF in 2009 I think, taking the place of Gorawut Numnak. I met Pett first time in 2010 during the EFN Confernce in Jakarta.

The guy is your typical silent, always smiling but very hard working person. Aside from being the regional officer for EFN, he is also the regional officer for Human Rights campaign of the FNF.

Last year, EFN participated for the first time in the Jeju Forum for Peace and Prosperity, a big annual international conference held in Jeju island, S. Korea Photo in one of the three dinners in the conference, the EFN video was shown on the stage. Barun Mitra, Pett, me.

EFN sponsored one panel in the 2 1/2 days conference about the dangers of economic nationalism and protectionism. Pett worked hard for that event, in coordination with FNF Seoul office, especially with Ms. Sung eun Lim, another hard working staff of the foundation.

At Jeju conference, from left: Sung eun Lim, me, Ms. Kim, Wan Saiful Wan Jan (Malaysia), Lars Richter (Country Director for S. Korea), Pham Chi Lan (Vietnam), Feng Xingyuan (China), Tricia Yeoh (Malaysia), Pett, Barun Mitra (India), Miklos Romandy (Austria), Liu Junning (China). Not in the photo with our group was Sam Raimsey (Cambodia).

EFN 2013 Conference in Bangkok, farewell dinner. From left: Mao Shoulong (China), Barun, Rainer Adam (outgoing FNF Regional Director for Southeast and East Asia), Xingyuan, Wan Saiful, Pett, Tricia, Sung eun, me.

Bangkok conference end of Day 2 group picture. Some participants who attended only Day 1, or stayed only until half day of Day 2, were not in this photo. Really good work Pett, along with your officemates in Bangkok regional office like Julianne, Poraporn, Wimonpug, others.

It was Pett's birthday yesterday. Happy birthday again Pett. See you around.

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See also:

EFN Asia 32: Day 2 of Conference 2013 in Bangkok, November 09, 2013