1

In this issue
Charting a Course to Low-Carbon
Green Growth in Asia 12
ADBI Addresses APEC Business
Forum on Asias Infrastructure 2
Meeting Asias Development Challenges 3
The Renminbis Role in
Trade and Finance 3
Climate Smart Agriculture Development:
Prospects and Challenges 4
Developing Myanmars Seed Industry 4
Philippine President Delivers Keynote
Address at Competition Policy Conference 5
Asian Financial Integration Requires
Regional Cooperation 5
ADBI Partnering with
Leading Universities 6
Recent Publications 6
ADBI in the News 6
Selected Upcoming Events 7
Recent Working Papers 7
Fostering Promising Young
Researchers in Asia 8
Asia Pathways Posts Published 8
ADBI News
www. adbi . org 2013 Volume 7 Number 3
A s i a n D e v e l o p m e n t B a n k I n s t i t u t e
Charting a Course to Low-Carbon
Green Growth in Asia
WORKSHOP
Asia must move away from the o|d economic thinking of "grow rst and c|ean |ater" and serve as a g|oba| ro|e mode| for |ow-carbon
green growth. Left to right, Ka|iappa Ka|ira[an, Professor, Austra|ian Nationa| University, A|varo Cedeno Mo|inari, Ambassador of
Costa Rica, Hironori Hamanaka, Chair, Board of Directors, Institute for G|oba| Environmenta| Strategies, Ryutaro Yatsu, Vice Minister,
Ministry of the Environment, Japan, Masahiro Kawai, Dean, ADBI, and A|ex Bowen, Principa| Fe||ow, London Schoo| of Economics.
Asia is at a crossroads. As the worlds most
populous region, with a rising share of global
greenhouse gas emissions, and as the region most
vulnerable to climate risks, Asia must be at the
center of the global fight against climate change.
Asias current emission-intensive growth is not
sustainable, with further gains in human well-being
constrained by the environmental carrying capacity.
To address these issues, ADBI held the workshop
Strengthening Policies and Practices for
Low-Carbon Green Growth in Southeast Asia
and East Asia on 1619 July. Participants also
discussed the ADBI and ADB study, Low-Carbon
Green Growth in Asia: Policies and Practices.
The workshop participants of about 50 senior
officials recognized that low-carbon green growth
is an imperativenot an optionfor developing
Asia. They reviewed low-carbon policy initiatives
taken by Asian countries at the national, sectoral,
and local levels, while assessing the achievements,
identifying the gaps, and examining new
opportunities. They agreed with the findings of the
study that actions taken by several Asian countries
have been impressive and replicable and the
regions commitment to low-carbon green growth
represents a move away from the old economic
thinking of grow first and clean later.
They also expressed concern that emerging
A s i a n D e v e l o p m e n t B a n k I n s t i t u t e
2
For more information on this event, please visit:
www.adbi.org/event/5750.po|icies.practices.|ow.carbon.
green.growth.asia.
To download a copy of Low-Carbon Green Growth in Asia:
Policies and Practices, please visit:
www.adbi.org/|es/2013.06.28.book.|ow.carbon.green.
growth.asia.pdf.
Asias carbon emissions remain high and failure to
act swiftly could increase mitigation costs by two
to five times and lock-in a high-carbon footprint
for decades to come. Investment of more than $6
trillion will be needed in the region by 2030 in
the energy sector alone. Asian businesses lag in
investments in low-carbon projects. Engaging the
private sector in scaled-up carbon markets with risk
guarantees is an attractive way to fill the financing
gaps for climate change mitigation.
The workshop recognized the immediate need
of regional cooperation to develop and disseminate
cost-effective cleaner technologies, develop green
industries, and create jobs. They also developed a
roadmap to act together on key common issues that
has the potential to make Asia the worlds most
important test-bed and a role model for low
carbon-green growth. Q
Research Director Ganeshan Wignaraja spoke on
the key role of land and transport in promoting
Asian integration at an APEC Business Forum held
in Tokyo on 4 September. Proposals from the
forum were provided as inputs to ministers at the
8th APEC Transportation Ministerial Meeting the
following day. The key discussion points included:
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sophisticated production networks depend on
cost-effective, rapid, and reliable infrastructure
networksespecially land transport.
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improved in recent decades, investment has not
kept pace with the demands placed on it by the
regions rapid economic and demographic
growth.
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financing.
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have substantial benefits in terms of reducing
risk, increasing investment in public
infrastructure, and increasing efficiency,
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developed countries.
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needed for effective infrastructure projects, such
as: prudent macroeconomic management; a
market-friendly business environment and legal
frameworks; good governance; and adequate
capacity and capability.
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beneficial, such as: improving efficiency and
liquidity of the Asian Bond Markets Initiative;
improving credit guarantee and investment
mechanism for the corporate sector; expanding
the ASEAN Infrastructure Fund; negotiating
and agreeing on non-discriminatory investment
protection to facilitate greater private
investment within Asia, including regional
infrastructure projects involving PPPs; and
integrating national markets, wherever feasible,
into broader regional ones. Q
ADBI Addresses APEC Business Forum on
Asias Infrastructure
FORUM
A s i a n D e v e l o p m e n t B a n k I n s t i t u t e
3
Meeting Asias Development Challenges
CONFERENCE
For more information on this event, please visit:
www.adbi.org/event/5807.currency.internationa|ization.
|essons.renminbi/.
ADBI offered solutions to the challenges facing Asian
economies at the Singapore Economic Review
Conference held in Singapore on 68 August.
Dean Masahiro
Kawai argued that
there is no evidence to
show that Japans new
monetary policy
called quantitative and
qualitative easing
which was introduced
to eliminate persistent
deflation at home
has created any
beggar-thy-neighbor
impact on Asia
emerging economies
in his presentation,
Abe-Nomics, Japans
Monetary Policy and
Its Implications for Asia.
Research Director Ganeshan Wignaraja
emphasized that foreign ownership, skills,
technology, and access to credit all positively
affect the participation of small and medium-sized
enterprises in global production networks in his
presentation, What Influences Firm-Level
Participation in Global Production Networks?
Senior Consultant for Research Peter Morgan
discussed how a better understanding of experience,
lessons, and issues are crucial to the improvement
of monetary policy regimes in his presentation,
Monetary Policy Frameworks in Asia.
Research Fellow Yothin Jinjarak examined how
measures of the global credit-market shocks are
negatively associated with trade receivables, trade
payables, and inventories, conditional on the level
of contract intensity in the industries that firms
operate in his presentation, Supply Chain and
Credit Market Shocks. Q
The Renminbis Role in Trade and Finance
WORKSHOP
The Peoples Republic of Chinas (PRC) high
economic growth in the past several decades has
led to a significant increase in its importance to the
global economy. This naturally begs the question
on the role that the renminbi will play in
international trade, investment, and finance.
Furthermore, the global financial crisis has
highlighted the risk of excessively relying on the
US dollar for international trade and payments. To
examine several interrelated objectives, including
the likely impact of renminbi internationalization
on the PRC and neighboring economies in Asia, an
interim workshop was held at ADBI on 8 August to
discuss the new ADBI study, Currency
Internationalization: Lessons and Prospects for
the Renminbi.
Dean Masahiro Kawai and the studys lead
consultant, Professor Barry Eichengreen of the
University of California, Berkeley, delivered the
opening remarks and introduction to the study,
respectively. In his opening remarks, Dean Kawai
spoke of renminbi internationalization as being
pursued in three finely calibrated phases along
three interrelated tracks. One track focuses on
cultivating the use of the renminbi in international
trade, the second track on the use of the renminbi
for international investment, and the third on its
use in international finance. The final conference
for the study is to be held in March 2014 in
Beijing, PRC, and the final drafts of the papers will
be published as an edited volume. Q
ADBI Research Director
Ganeshan Wignara[a spoke at
the Singapore Economic
Review Conference on the
factors that affect the
participation of sma|| and
medium-sized enterprises in
g|oba|productionnetworks.
ProfessorBarryEichengreen(left}andDeanMasahiroKawai
exp|ore the |ike|y impact of renminbi internationa|ization at
the workshop, Currency Internationa|ization. Lessons and
ProspectsfortheRenminbi.
A s i a n D e v e l o p m e n t B a n k I n s t i t u t e
4
Developing Myanmars Seed Industry
POLICY FORUM
For more information on these forums, please visit:
www.adbi.org/event/5861.myanmar.po|icy.forum.dev.seed.
industry/#sthash.YARe3qPq.dpuf.
Seed is the basic input in agriculture
and given the large role of agriculture
in Myanmars economy, the
development of a viable and
competitive seed industry is key to
boosting agricultural productivity and
sustaining economic development in
Myanmar. To help prepare a roadmap
for the development of a competitive
seed industry in the country, ADBI
conducted three back-to-back events
in Myanmar: Policy Forum on Developing a
Competitive Seed Industry in Myanmar (2627
August); National Review Seminar on
Strengthening Agricultural Productivity in
Myanmar (28 August); and Myanmar Country
Consultations (30 August).
Myanmars Minister of Agriculture U Myint
Hlaing and other senior Myanmar officials, experts
from international organizations, private sector
representatives, and other stakeholders attended the
events.
Defining an appropriate policy for the
development of a strong and efficient seed industry
in Myanmar will strengthen the agricultural sector,
improve conservation, and ensure food security.
Discussions focused on the creation of a proper
regulatory framework, aspects of varietal
development, and ways to increase participation of
local companies in agricultural supply chains. The
policy forum is part of the CLMV (Cambodia, Lao
PDR, Myanmar, and Viet Nam) Project on
Strengthening Agricultural Productivity in CLMV
Countries. Q
Asias global share of greenhouse gas emissions
from agricultural production is expected to rise due
to population and income growth, but this trend can
be reversed by adopting climate smart agricultural
practices. To discuss the prospects of climate smart
agriculture in Asia, a Workshop on Developing
Farming Systems for Climate Change Mitigation
was held in Colombo, Sri Lanka, 2630 August.
Thirty-two representatives from governments,
mostly senior officials attached to agriculture,
environment, and planning ministries, as well as
eight representatives from knowledge institutes of
23 economies, attended the five-day workshop,
which was organized in collaboration with the
Asian Productivity Organization and the Ministry of
Agriculture, Sri Lanka.
The workshop assessed efforts in the promotion
and adoption of climate smart agricultural practices
in the region, evaluated best practices relevant to
climate change mitigation in agriculture, and
reviewed strategic policy choices and roadmaps for
promoting such good practices. Q
Climate Smart Agriculture Development:
Prospects and Challenges
WORKSHOP
For more information on this workshop, please visit:
www.adbi.org/event/5809.dev.farming.systems.c|imate.
change.mitigation/?sectionID=35.
Theadoptionofc|imatesmartagricu|tura|practiceswi||he|p
reducegreenhousegasemissionsinAsia.
A s i a n D e v e l o p m e n t B a n k I n s t i t u t e
5
Philippine President Benigno Aquino delivered the
keynote address at the opening session of ADBIs
8th East Asia Conference on Competition Law
and Policy and the 9th East Asia Top Level
Officials Meeting on Competition Policy held in
Manila, Philippines, on 2829 August. In his
speech, President Aquino said that inclusive
economic growth can only be achieved by pursuing
a healthy competitive environmentone that stokes
the natural human drive to competeto work hard,
to innovate, and to create something of worth.
The aim of the two conferences is to enhance
understanding on competition policy and laws in
East Asia, promote closer cooperation on
competition policy among East Asian countries, and
improve the effective delivery of technical
assistance. Q
Philippine President Delivers Keynote
Address at Competition Policy Conference
CONFERENCE
For more information on these two events, please visit:
www.adbi.org/event/5851.east.asia.conference.competition.
|aw.po|icy/.
Phi|ippine President Benigno Aquino de|ivers the keynote
addressatthe8thEastAsiaConferenceonCompetitionLaw
andPo|icyhe|dinMani|a,Phi|ippines,on2829August.
Asian Financial Integration Requires
Regional Cooperation
SEMINAR
Inadditiontonationa|-|eve|andg|oba|-|eve|regu|ation,there
is a mediating ro|e for regiona|-|eve| institutions of nancia|
regu|ationandsupervisioninAsia.
For more information on this seminar, please visit:
www.adbi.org/event/5862.regiona|.nancia|.regu|ation.asia/.
Senior Consultant for Research Peter Morgan
presented Regional Financial Regulation in Asia,
a study coauthored with Dean Masahiro Kawai. In
the presentation given at ADBI on 5 September,
they argued that, in addition to national-level and
global-level regulation, the latter of which has
developed under the Financial Stability Board and
the International Monetary Fund following the
20082009 global financial crisis, there is a
mediating role for regional-level institutions of
financial regulation and supervision. This is
particularly so in Asia, where increasing financial
integration requires a higher level of cooperation.
This role includes monitoring regional systemic
risks such as capital flows, coordinating financial
sector surveillance and regulation to promote
regional integration, and cooperating with global
institutions in rule formulation, surveillance, and
crisis management.
The presentation covered developments of
regional regulation in Asia and Europe, identified
challenges of regional financial regulation, and
provided recommendations for strengthening
institutions of regional financial regulation. Q
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A s i a n D e v e l o p m e n t B a n k I n s t i t u t e
6
Dean Masahiro Kawai signed a framework
memorandum of understanding for research
collaboration with nine major universities in Asia
and Australia, including Australian National
University, Nanyang Technological University,
Waseda University, and Zhejiang University. The
collaboration agreement, signed in Singapore on 6
August, will involve international exchanges of
researchers between the institutions, joint
supervision of young researchers, as well as
collaborative works on research projects, books,
and journal publications. Q
ADBI Partnering with Leading Universities
To download a copy of this book, please visit:
www.adbi.org/|es/2013.06.28.book.|ow.carbon.green.
growth.asia.pdf.
Dean Masahiro Kawai (left} signs a memorandum of understanding for research co||aboration with nine ma[or universities.
Recent Publications
This book by ADBI and ADB recognizes that
low-carbon green growth is imperative for
developing Asia. The volume notes that Asias
carbon emissions remain high and failure to act
swiftly could increase mitigation costs by two to
five times and lock in a high-carbon footprint for
decades to come. Regional cooperation is needed
to develop and disseminate cost-effective cleaner
technologies, develop green industries, and create
jobs. A decision to act together on key common
issues would quickly
make Asia the worlds
most important test-bed
in low carbon-green
growth. Q
Low-Carbon Green Growth in Asia: Policies and Practices
CBT Director Yuqing Xing was interviewed by Peoples
Daily on the Trans-Pacific Partnership agreement, and he
was interviewed by Mediacorp TV of Singapore on
Abenomics and the outlook for the Japanese economy.
Capacity Building Specialist Anbumozhi Venkatachalam
was quoted in a Thai News Service article, AEC Calls for
Sustainable, Green Regional Economy.
The ADBI working paper, How Important are Exports and
Foreign Direct Investment for Economic Growth in the
Peoples Republic of China?, by CBT Director Yuqing
Xing and Manisha Pradhananga, was cited in the South
China Morning Post article, Despite Rebalancing, Exports
Still Vitally Important to China.
Tanzanias Daily News cited ADBI in the article,
Microfinance Can Help Low-income Earners.
ADBI in the News
A s i a n D e v e l o p m e n t B a n k I n s t i t u t e
7
27
November
27Novemberto
4December
2-4
December
The 8th NARBO-IWRM Training Program (Sri Lanka)
The aim of this eight-day training program is to improve integrated water resources management in Asia.
ADBI Annual Conference on Realizing an Innovative, Inclusive, and Integrated Asia and the
Pacific (Tokyo)
This conference aims to take stock of recent developments in the role of innovation for inclusive growth
and regional integration, explore prospects, and assess policy choices.
Regional Workshop on Eco-industrial Clusters (Tokyo)
This workshop will explore the potential of transforming industrial clusters into eco-friendly economic
zones.
Selected Upcoming Events
Recent Working Papers
Long-term Issues for Fiscal Sustainability in Emerging
Asia
Authors: Masahiro Kawai and Peter J. Morgan
The aftermath of the 2008 global financial crisis underlined the
importance of maintaining fiscal space and fiscal sustainability.
Even though many Asian economies implemented fiscal stimulus
policies during the crisis, their fiscal conditions generally
improved rapidly thereafter, and their overall government debt
positions, aside from that of Japan, appear strong. Nonetheless,
there are a number of reasons to believe that conditions in
emerging Asian economies will not always be so supportive.
Read Working Paper 432 at www.adbi.org/working-paper/
2013/08/16/5858.issues.sca|.sustainabi|ity.emerging.asia.
Banking Crises and Japanization: Origins and
Implications
Authors: Masahiro Kawai and Peter J. Morgan
Japans two lost decades perhaps represent an extreme example
of a weak recovery from a financial crisis, and are now referred to
as Japanization. Widespread stagnation in advanced economies
in the wake of the 2008 global financial crisis led to fears that
Japanization might spread to other countries. This study examines
the dimensions of Japanizationincluding low trend growth, debt
deleveraging, deflation, and massive increases in government debt
and analyzes their possible causes.
Read Working Paper 430 at www.adbi.org/working-paper/2013/
07/29/5837.banking.crises.[apanization.origins.imp|ications/.
An Asian Perspective on Global Financial Reforms
Authors: Peter J. Morgan and Victor Pontines
The purpose of this study is to better understand the likely impact
on Asian economies and financial institutions of various recent
global financial reforms, including Basel III capital adequacy and
liquidity rules. This paper finds that the Basel III capital adequacy
rules are likely to have limited impacts on economic growth in
Asia, but other financial regulations, including liquidity standards
and rules for over-the-counter derivatives, could have stunting
effects on financial development in the region.
Read Working Paper 433 at www.adbi.org/working-paper/
2013/08/21/5860.asian.perspective.g|oba|.nancia|.reforms/
#sthash.9MzC9r2|.dpuf.
Multilateralizing Asian Regionalism
Authors: Richard Baldwin and Masahiro Kawai
Motivated by the proliferation of free trade agreements in Asia
over the last decade, this paper studies the challenges faced by the
Asian noodle bowloverlapping, multiple trade rules,
regulations, and standards in Asiain the process of regional and
global trade integration. This paper highlights the importance of
trade and investment linkages among Asian economies that have
formed Asian supply chains.
Read Working Paper 431 at www.adbi.org/working-paper/
2013/08/15/5857.mu|ti|atera|izing.asian.regiona|ism/#sthash.
WK3KU|VA.dpuf.
Real Estate Valuation, Current Account, and Credit
Growth Patterns before and after the 2008-2009 Crisis
Authors: Joshua Aizenman and Yothin Jinjarak
This paper explores the stability of the key conditioning variables
accounting for real estate valuation before and after the global
financial crisis of 20082009. This paper validates the robustness
of the association between the real estate valuation of lagged
current account patterns, before and after the crisis. The results are
supportive of current account and credit growth channels, with the
animal spirits and momentum channels playing the most
important role in the boom and bust of real estate valuation.
Read Working Paper 429 at www.adbi.org/working-paper/
2013/07/23/5805.rea|.estate.va|uation.after.2008.2009.crisis/
#sthash.ZSLz|Lir.dpuf.
How Important are Exports and Foreign Direct Investment
for Economic Growth in the Peoples Republic of China?
Authors: Yuqing Xing and Manisha Pradhananga
The global financial crisis and the slowdown in the Peoples
Republic of China (PRC) have led to questions about the
sustainability of the PRCs growth. The commonly used argument
is that the PRC is too dependent on external demand and that it
needs to rebalance its economy toward domestic consumption.
This paper concludes that the PRC economy remains highly
dependent on external demand in the form of exports and FDI,
and rebalancing the economy toward domestic demand has not yet
been achieved.
Read Working Paper 427 at www.adbi.org/working-paper/
2013/07/01/5774.exports.fdi.economic.growth.prc/#sthash.
nSieR4nP.dpuf.
A s i a n D e v e l o p m e n t B a n k I n s t i t u t e
8
Young, early-career researchers are full of fresh
perspectives and are keenly aware of the potential
that a freshly-minted PhD degree provides for their
career paths. In that regard, it is very useful for
young researchers to frequently attend and present
their recent research papers at conferences and
seminars, and receive feedback and comments.
With this recognition, ADBI organized the
inaugural Young Researchers Seminar on
Macroeconomic and Microeconomic Issues in
Development on 2930 August.
The seminar provided a fitting and timely
platform to bring together young and promising
researchers to present their work, interact with,
and learn from each other on innovative
theoretical and evidence-based research on
macroeconomic and microeconomic issues facing
the Asian region. In his opening remarks, Dean
Masahiro Kawai emphasized that governments,
industry, academia, and international organizations
have a responsibility to support and nurture
early-career researchers so that they will fully
realize their potential. ADBI Research staff, Dean
Kawai, Professor Masahiko Aoki of Stanford
University, and Professor Koichi Hamada of Yale
University offered advice to the young researchers
and gave critical feedback on their papers. The
high-quality papers presented at this event will be
considered for publication as ADBI Working
Papers. This research seminar is to become an
annual event. Q
Fostering Promising Young Researchers in Asia
SEMINAR
For more information on this event, please visit:
www.adbi.org/event/5601.adbi.young.researchers.micro.
macroeconomics/.
Dean Masahiro Kawai (left} and Professor Koichi Hamada
present a certicate of recognition for the comp|etion of a
high-qua|ity research paper to an attendee of ADBI's
inaugura| Young Researchers Seminar on Macroeconomic
and Microeconomic Issues in Deve|opment.
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