Minutes of RIN Meeting Jan 14, 2012

Record of the Economic Research Institute for ASEAN and East Asia (ERIA) Research Institute Network Meeting (RINM) held in Phuket, Thailand on 14 January, 2012.

The second Research Institute Network Meeting (RINM) for Economic Research Institute for ASEAN and East Asia (ERIA) for the year 2011 was held in Phuket, Thailand on 14 January, 2012 under the Chairmanship of Dr Hank Lim Giok-Hay from Singapore Institute of International Affairs (SIIA). Dr Yasuhiro Yamada, President, BRC-JETRO moderated the meeting in the first session. RIN members from China, Indonesia and Myanmar could not attend the meeting.

1.  Dr Yasuhiro Yamada, President, BRC-JETRO initiated the proceedings and extended a warm welcome to the RINM members. Thereafter, Dr Hank LIM was requested to initiate the RIN Meeting.

2. In his opening remarks, Dr Hank Lim thanked the Bangkok Research Center (BRC) team for making the arrangements for the meeting at Phuket. He then recalled the developments at the 19th ASEAN and 6th East Asia Summit in Bali in November 2011. He also recalled the Jakarta Framework developed by ERIA for the summit. He noted that the two summits have brought on additional dimension to the responsibilities of ERIA. He left these for greater explanation by Prof Fukunari Kimura and Mr Daiki Kasugahara. He also acknowledged the thematic contribution on East Asia integration made by Prof Gary Hawke to this meeting. He informed the meeting that the ASEAN contributions are finally coming to ERIA and thanked the RIN members for their continuous work towards this end. Finally, with the recognition of ERIA in the summit meetings, he believed that ERIA has now been recognised as a regional institution.

3. Prof Fukunari Kimura, Chief Economist of ERIA made a summary presentation on the research projects carried out in 2010-11. He acknowledged that the research cycle at ERIA was a little delayed. He informed about the task outs coming from ASEAN related meetings, namely the AEC Scorecard- which is now scheduled to go into phase III, the Mid Term Review (MTR) of the AEC Blueprint, and the Jakarta Framework. The last mentioned was presented to the chairman of the last ASEAN Summit. These projects were led by the Dr Ponciano S. Intal, Senior Researcher at ERIA and his team. He also briefly explained the study on SME Policy Index which was being prepared with some cooperation from the ASEAN Secretariat. He also listed the energy related projects on energy saving and energy market integration. Most of these researches had an interface with the policy makers even though the underlying framework and content was highly academic. And lastly, he introduced the ERIA-IDE JETRO-UNIDO project on green development. He also informed the meeting about the outcomes of the ERIA-HARVARD-KEMLU Symposium held in October 2011 for the EAS. He also briefly covered the two projects being carried out in collaboration with Australia and one with New Zealand looking into various aspects of sustainable growth in East Asia, ASEAN+1 FTAs and global value chains and ROO respectively. Prof Kimura then briefly explained the contents of new research projects being conducted in the year 2011-12, which includes the fourth round of project on Micro Data, Comprehensive Mapping of FTAs in ASEAN and East Asia, AEC as a Global Services Hub, the CADP phase II, AEC Scorecard, the Mid Term Review of the AEC Blueprint, the third round of project on Social Protection, the SME Policy Review, New Development Model for the East Asia, PPP in ASEAN and the various projects related to energy, and biofuels.

4.  Dr Josef Yap from the Philippines opened the discussion with expressing his thanks for organising the meeting in Phuket. He enquired from Prof Kimura if there is a relation between the upcoming AEC Scorecard phase III and the MTR. He also enquired if the project on New Growth Strategy would be a cross-country study, including researchers from all countries. Prof Kimura explained that the Scorecard and MTR projects are different to the extent that the phase III of the Scorecard will quantify achievements whereas the MTR will be a comprehensive review of the AEC based on the blueprint. As for the study on New Growth Study, which has been initiated at the instance of China, scholars from various countries will be finalised in due course.

5.  Dr Hank Lim noted that the quality and quantity of ERIA’s projects have moved upwards. This is also evident from the references made at the summits in Bali in November 2011.He suggested an equal increase in the distribution/dissemination of ERIA’s research work for which the role of RINs is very important. Prof Kimura added that ERIA’s website is regularly accessed for the Discussion Papers and the Policy Briefs. ERIA will also be producing a series of Policy Briefs on FTA. Further, a large part of dissemination takes place in the interface with policy makers. ERIA’s academic works and researches are the backbone of these interfaces. Mr Daiki Kasugahara, General Manager, ERIA informed that the AEC Scorecard and the MTR projects are presently the core discussion issues in the SEOM. He also added that ERIA is restructuring its website for easy access to research related information by different groups. Dr Intal raised a different view on dissemination when he noted that MTR questionnaires invoke a very low rate of response from the officials due to lack of adequate knowledge about the ASEAN Community. An extensive dissemination of information would be required for which ERIA, RIN and possible JICA initiatives could be useful.

6. Prof Jenny Corbett from Australia suggested that while RePEc could be one means of dissemination of research, the Social Science Research Network (SSRN) could also be subscribed to by ERIA for dissemination of series of Working Papers. Prof Corbett also evinced interest in the ERIA research project on New Growth Strategy. She expected some similarities with the recently concluded project on Sustainable Growth in East Asia and showed interest in joining up with the new project. She also enquired about the process of joint collaboration in research projects such as the one between ERIA, IDE-JETRO and UNIDO as some other institutions may also like to team up with ERIA in this new project. Prof Kimura clarified that the project on New Growth Strategy in East Asia has been convened under the leadership of Prof Zhang Yunling from China and is at an early stage. For joint collaboration with other institutions, he informed that these are done on the principle of co-financing of the research.

7.   Prof Gary Hawke from New Zealand enquired about the project on Innovation Networks and enquired if the BRC is facing any problems in continuing this research. Dr Yasushi Ueki from the BRC explained the progress of the project, which had initially faltered due to the floods in Thailand.

8.   Dr Vo Tri Thanh from Vietnam questioned if the study on agriculture was the first of its kind by ERIA and if there are any new ideas in this area. He also suggested that ERIA’s repertory of research should also cover some current topics of regional and international relevance such as regulatory integration in the region, situation in Myanmar etc. This would add to the reputation of ERIA. Prof Kimura replied that agriculture development remains an important part of the MTR project. On current issues, while expressing some caution in positioning ERIA’s research in policy debates, he informed that there were a series of policy briefs being published regularly on topical issues, especially of interest to ASEAN. He invited the views of RIN members on issues which can be taken up for discussion by ERIA.

9.   Dr Leeber Leebouapao from Laos congratulated ERIA on the presentation and summarization of its research studies. He suggested that the summary should carry a brief message from the Executive Director of ERIA. It should also include an overall summary of research under each of the three pillars, possibly by the Chief Economist. He recommended adding issues for further research as recommended by stakeholders such as the ASEC and RIN. He also suggested that ERIA should contemplate supporting some special research from member countries. Prof Kimura noted the suggestions and agreed that the research summary still has a lot of room for improvement.

10.  Dr Biswajit Dhar from India congratulated Prof Kimura and his team for the research works produced by ERIA. He expressed the desire of the RIS to contribute to ERIA’s projects and enquired if there is such a system in place whereby network members could contribute to ERIA research. He also suggested that the forthcoming presentation by Pro Gary Hawke in the later part of the meeting would offer many ideas which could become research issues for ERIA. Dr Intal informed the members that agriculture as an issue for further research would be taken up after the MTR project. He suggested to the chairman that a report should also be presented on RIN activities related to ERIA and their contribution in shaping ERIA research.

11.  Dr Wisarn Pupphavesa from Thailand was of the view that mid level government officials and relevant NGOs should be the target group for dissemination of research works through workshops.

12.  Dr Zakariah Rashid from Malaysia congratulated Prof Kimura and his team for conducting research which has matured over the years. However there was still room for improvement. He drew the attention of ERIA towards structural reforms in ASEAN, which has allowed researchers to understand the problems in macroeconomic structure. He suggested taking stock of the macroeconomic situation in the region and present a bird’s eye view of the same.

13.  Prof Kimura thanked all for their suggestions especially those related to dissemination of research. Dr Hank Lim added that ERIA had worked closely with then ASEAN chair, Indonesia, which played the champion’s role in disseminating the research works. A similar role should be expected from Cambodia and later Brunei. Mr Hidetoshi Nishimura, Executive Director, ERIA, added to remind that ERIA was the Sherpa organisation for the ASEAN and related summits. ERIA will help in designing the summit issues in Cambodia and Brunei and later Malaysia in 2015, which will also be the end year of reaching the goal of AEC.

14. Mr Daiki Kasugahara made a presentation on ERIA’s recent activities and the progress made since the last RIN meeting. He highlighted the activities related to energy and connectivity, the Mekong India Economic Corridor, the Regional Cooperation Economic Programme and the Jakarta Framework. He showcased the paras in ASEAN summit which recognised ERIA’s works. He also explained ERIA’s inputs to the current chair, Cambodia and the previous chair, Indonesia. Dr Hank Lim described these summit and policy related work as the second engine of ERIA with the research forming the first engine. He emphasised the need to connect the two engines through institutional processes which could well follow the Track 1.5 mechanism.

15.  Dr Chheang Vannarith of Cambodia suggested that ERIA should focus on matters related to SMEs and Agriculture and make some policy relevant research, especially in the latter area. Given the importance of tourism in the region, he recommended taking it up as a subject for policy oriented research. And finally, he suggested research on integration of growth triangles in the region and the ways and means to integrate the ODA with country’s growth. Dr Josef Yap made a friendly suggestion for setting up a Facebook page for ERIA. He also enquired about the essence of Dynamic Equilibrium as mentioned in the Jakarta Framework and its relevance to the ASEAN Community. He also wanted to know if the GSM could be combined with evolving disasters-for restructuring of production networks- and if the model could be optimized through a combination of GSM and vulnerability index. Prof Kimura explained that the Dynamic Equilibrium was coined by the policy makers (Mr Marty M. Natalegawa, Foreign Minister of Indonesia), where in a rapidly moving world, there is more dynamism in the economic realm. Mr Kasugahara added the perspective of President Susilo Bambang Yudhoyono who felt that so far, ASEAN has been the recipient of economic impacts from outside the region. The ASEAN must create a momentum which would send inputs to outside world. On the issue of GSM, Prof Kimura admitted that the model has its limitations. Nevertheless, it is a very important model. Mr Kasugahara reminded that the last Governing Board meeting had resolved to use GSM for making a resilient community. This had been proved in the studies conducted on Japan earthquake and the Thailand floods.

16. Prof Gary Hawke enquired if the US and Russia had so far evinced any interest in ERIA which could be of institutional significance and also reflect their economic interest in Asia. Mr Kasugahara replied that so far US has not shown any institutional interest to join ERIA, but have shown economic interest in the region as evident from brief meetings with the embassy officials from time to time. The Russians however have remained a bit aloof so far, even though there are some elements of contact with them. But ERIA has been noticed by both even if there are no immediate intentions to join ERIA.

17.  Dr Yamada summed up the discussions in the first session and made a small presentation on the research works being conducted by BRC, which include the one on FTAs in Asia by Dr Kazunobu Hayakawa, Cross Border Issues by Dr Masami Ishida and Industries in Mekong Basin by Dr Yasushi Ueki. Dr Intal found these projects to be helpful for the MTR study once their results are out.

18. The second session was moderated by Dr Hank Lim. Dr Intal made a presentation on the MTR study. He explained the schedule and activities of the report. He also gave the status of responses to the questionnaires by country study teams. Following the explanation, Dr Vannarith gave an update on the status of work by the Cambodian country study team. Ms Tutiaty Abdul Wahab from Brunei explained the reasons for the slow status of the study teams. She found the awareness to the urgency of answering the questionnaires to be of low level. She suggested ways and means for improving the responses to the questionnaires. She also suggested the need for the report to showcase the region as a whole and not in groupings of four and six. She also shared her experience in SEOM which appeared to be reluctant in helping in the MTR study due to its past experience with the Public Sector in the case of Score Card project. Dr Intal clarified that the report would be country specific and that the MTR study would consolidate the findings of Scorecard project in its phase II and III so that its findings are acceptable to both public and policy makers. Dr Hank Lim expressed an idea that the ASEAN contribution to ERIA may be utilised for creative purposes such as to create a Track 1.5 Coordinating and Monitoring Mechanism at the national level. Dr Yap had a query on the country rankings and asked if they were similar to the one in the study done by Urata and Ando. Dr Intal replied that the ranking methodology in this study is different from that of Urata and Ando, as the MTR study is based on the inputs from Chamber of Commerce and Industry and has a broader set of limitations. Dr Yap then suggested adding an appendix to the study explaining the difference between the two methodologies. For the non ASEAN members present in the meeting, Dr Intal explained the basic concept of the study and also the usage of studies done by Philippa Dee on Services and Ken Takura on FTAs. He underlined the challenges faced in consolidating these studies and papers.

19. The discussion on MTR study was followed by announcements made by ERIA on the Special RIN Forum at Fukuoka, Japan and the ERIA Cosmopolitan Awards. Prof Corbett informed that Canberra is the sister city of Nara and would be celebrating its 100th anniversary in 2013. She suggested finding ways and means to associate the winners of the Cosmopolitan Awards with this event.

20.  Prof Hawke was invited to make his presentation on the theme paper “What Kind Of Economic Integration”. Prof Hawke made a short and succinct presentation of the theme paper which was earlier circulated to all the members. His paper mainly underlined the changing nature of integration in the world and the need for replacing negotiations with integration and cooperation. The presentation invited following observations from the members:

–       Dr Dhar congratulated Prof Hawke on his paper and suggested that the policy makers must note the importance of cooperation, especially when existing models such as WTO are not giving desired results. He also noted that integration models cannot be replicated in full and the regional value chains should act as drivers of regional integration.

–       Dr Chang Jae Lee from Korea added that the CJK FTA is now on fast track and it may emerge as an alternative to regional integration.

–       Dr Vannarith noted that he found the speed of regional economic integration outpacing the domestic economic reforms.

–       Dr Intal found the paper giving more importance to TPP over APEC when the latter had influenced the evolution of ASEAN, especially when the technical regulations (as envisaged in the TPP) are known to freeze innovation.

–       Dr Pupphavesa raised a more exploratory question that the paper should have addressed by asking why the economic integration and for whom. The paper should reveal how to facilitate economic reform that would lead to economic integration. Also, a wider regional integration is required for inclusive growth.

–       Prof Corbett, who had earlier sent her comments on the paper, also wanted to know what could be the gains from the economic integration and what rules would be used for this purpose. The authorship of the rules are equally important especially with the entry of USA in the region.

–       Dr Leebouapao wanted to know if there would be losers also in the process of integration.

–       Mr Tetsusaburo Hayashi from Japan thanked Prof Hawke for his paper and recalled the views of the President of IDE JETRO on economic integration, which he read aloud in the meeting.

–       Prof Kimura said that economic agreements are the basis of economic integration. He felt that there was a lack of good research on this issue and that ERIA would address this situation. He also felt that there is an Asian element in economic integration in the region which makes it different from both TPP and APEC. And lastly, he found the speed of economic integration slower in the ASEAN as compared to the North East Asia where the latter is moving very rapidly on the CJK FTA. The ASEAN and even East Asia need to speed up or they may lose their momentum towards the integration of the region.

–       Dr Thanh provided the answer to the question of what kind of integration and said that this is happening at three levels, namely, multinational, regional and national. He also observed that the world economy is in transition and enquired about the amount of time required for the new balance of power to emerge.

–       Dr Hank Lim ended the discussion on the theme paper with the note that Prof Hawke will prepare a one page memo on the subject which will be circulated to all members. He also announced that the next theme paper would be on Regional Cooperation among the ASEAN Countries.

21.   Dr Hank Lim summed up the meeting with the chair’s recommendations, which included:

i)     The meeting has noted that the quality and quantity of ERIA’s research has improved but there still remains the question of dissemination. One possible mechanism could be a track 1.5 coordinating and monitoring body with shared finances and responsibilities among the countries. The contribution from ASEAN could be used for this purpose.

ii)   There should be an abstract of research issues prepared, especially for mid level officials. ERIA could consider subsidizing these publications.

iii) ERIA should work at connecting the two important side of the organisation, namely the research and managerial enterprise with the policy makers.

iv)   Prof Hawke would prepare a memo highlighting the comments received on his paper.

22.           Mr Nishimura delivered the closing remarks of the meeting. In his remarks, he noted the evolution of RIN meetings. He also welcomed the strong philosophical elements of Prof Hawke’s paper. He shared his anguish of maintaining the ASEAN centrality in East Asia’s integration. However, he was pleased to announce that ERIA would continue to remain the Sherpa organisation in the region, together with the help of the RIN members

23.           The meeting concluded with a vote of thanks to the chair.


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