Experience in Supporting Industry Development in Japan and Lessons for Viet Nam

Japan is the world's 3rd largest economy with a nominal GDP of USD 5380 billion. Japan's economy has a rapid industrial development process after its defeat in World War II. Vietnam's economy in 2020 will achieve GDP growth of 2.9%, nominal GDP of 300 billion dollars, per capita income reached $2786, if calculated according to purchasing power parity (PPP), the average income of Vietnamese people is about $ 8,500. In 2020, Vietnam has a trade surplus of 19.1 billion USD (an important contribution to this result is the total two-way turnover of 39.6 billion USD, a trade deficit of 1.1 billion USD from Japan. No small contribution to the economic success of Vietnam as a strategic partner of Japan - the third largest economy in the world. Japan is the first country in the G7 group to recognize Vietnam as a market economy and partner, the largest ODA sponsor for Vietnam, the number 1 investor in Vietnam and the 3rd largest trading partner of Vietnam. This paper also refers the lessons learned for Vietnam.

Agrivoltaics in Ontario Canada: Promise and Policy

Well-intentioned regulations to protect Canada’s most productive farmland restrict large-scale so-lar photovoltaic (PV) development. The recent innovation of agrivoltaics, which is the co-development of land for both PV and agriculture, makes these regulations obsolete. Burgeoning agrivoltaics research has shown agricultural benefits including increased yield for a wide range of crops, plant protection from excess solar energy and hail, improved water conservation while maintaining agricultural employment and local food supplies. In addition, the renewable electricity generation decreases greenhouse gas emissions while increasing farm revenue. As Canada in general, and Ontario in particular, is at a strategic disadvantage in agricultural without agrivoltaics, this study investigates the policy changes necessary to capitalize on the benefits of using agrivoltaics in Ontario. Land use policies in Ontario are reviewed. Then, three case studies (peppers, sweet corn and winter wheat) are analyzed for agrivoltaic potential in Ontario. These results are analyzed in conjunction with potential policies that would continue to protect the green-belt of the Golden Horseshoe, while enabling agrivoltaics in Ontario. Four agrivoltaic policy areas are discussed: increased research and development, enhanced education/public awareness, mechanisms to support Canada’s farmers converting to agrivoltaics and using agrivoltaics as a potential source of trade surplus with the U.S.

The EU self-surplus puzzle: an indication of VAT fraud?

The world runs a trade surplus with itself: the reported values of exports exceed the reported values of imports. This is logically impossible but a well-known empirical fact. Less well-known is the fact that, in recent years, the EU has a trade surplus with itself that amounts to more than 80% of the global surplus. In this paper, we show that this EU self-surplus is worth a striking 307 billion Euro in 2018, equaling 1.9% of the Union’s GDP, which persists both in goods and services trade accounts. We further examine discrepancies in goods and services trade accounts at the country and country pair level. These are strongest between neighboring countries and exist for members of the Euro Area as well as non-members. Around the 2004 Eastern Enlargement, the EU self-surplus quadrupled. Our estimations suggest that Cyprus, Ireland, Luxembourg, and Sweden are EU Members with the most inaccurate statistical regimes. We observe systematic biases which unlikely root in random measurement error. By contrast, we suspect that a large fraction of the EU’s self-surplus puzzle seems related to fraud in value added tax (VAT). VAT exemptions for exporters provide strong incentives for the over-declaration of true export values. The resulting loss in tax income could amount to as much as 64 billion Euro per year.

Slowing Economic Growth and Falling Production in EU

The author examines the problems of economic growth of the EU in the period before the coronavirus pandemic, as well as during the 2020 economic crisis and gradual recovery. It is argued that the decrease in 2017‒2019 was caused by a number of long-term reasons, i.e. slow technological renewal of production base and narrowing of trade surplus due to loss of competitive advantages over producers from Southeast Asia. The author analyses the mechanics of pandemic’s impact on EU production volume, caused by decline in general demand and supply of goods and services. The EU economic policy is viewed as an appropriate instrument to protect citizens and companies from bankruptcy. It is outlined that the recovery will stem not from the economic policy, but from countering the pandemic with vaccines and sanitary restrictions. The author forecasts that economic growth rates in the region will slow down due to the reasons that emerged before the pandemic. Moreover, the growth will be negatively affected by the current EU policy of greater use of clean energy and technologies that preserve the environment, but inflate the production costs.

The coal trade surplus and merchant seafarers in British-Norwegian relations during the First World War

During the First World War, more than 800 Norwegian ships were sunk by hostile action, with a loss of about 2,100 seafarers. The Norwegian merchant fleet was extremely important for Norway's economy and for securing the import of vital goods. In addition, Britain and her allies needed goods carried in Norwegian merchant ships, such as coal shipped across the Channel to France. This article examines the relationship between Britain and Norway during the war, concentrating on the roles of two important resources, coal and maritime labour. The first part of the article outlines the wartime Anglo-Norwegian relationship. Negotiations around the so-called ‘coal trade surplus’, and how the surplus was allocated, are analysed in the second section. The coal trade surplus derived from British coal exports to Norway and was transferred from the British to the Norwegian Government in 1919. The British Ministry of Shipping, in recognition of the efforts of Norwegian seafarers, demanded that part of the surplus should be allocated to their well-being and to a memorial for the Norwegian merchant seafarers who had perished during the war.

The Performance of the Agri-food Sector in the Recent Economic Crisis and during Covid-19 Pandemic

Crises impact every sector of the economy; however, the magnitude of that impact varies between the different sectors. The agri-food sector-related lessons learned from the last two crises (global financial crisis in 2008, and the sanctions against Russia in 2014) are that international trade becomes lower and commodity prices rise. This article analyzes the performance of the Hungarian agri-food sector during the last three crises based on international and Hungarian datasets. The results show that impacts depend on many factors, such as the type of the agri-food products (raw material vs. processed product, perishable vs. non-perishable goods, etc.) or the depth of trade integration. It should be noted that Hungary is heavily integrated into the EU’s common market, its major trade partners are the other member states. At the commodity level, the share of raw materials is higher on the export side (e.g. cereals) compared to the import side (e.g. meat products). Based on the results, the impacts of the COVID-19 pandemic were different from the two previous crises. Despite the difficulties in transport, Hungarian exportation expanded and resulted in an increasing trade surplus, while international commodity prices remained stable. The identification of the different impacts of the coronavirus compared to the other two crises is the major finding of the article. Doi: 10.28991/HIJ-2021-02-03-02 Full Text: PDF

The Dynamics of Exchange Rate, Inflation, and Trade Balance in Indonesia

Balance of trade has become an essential indicator for economic activities, particularly in countries adopting the open economy. During the last two decades, Indonesia has had trade surplus. The open economy has created dynamics in macroeconomic variables. The purpose of this research is to identify any dynamics between exchange rate, inflation, and balance of trade in Indonesia. Using the Autoregressive Distributed Lag, this study finds the dynamics between the said variables. In the short run, there are causalities between exchange rate and balance of trade, exchange rate and inflation, and balance of trade and inflation. In addition, J-Curve also occurred in Indonesia, where depreciation in exchange rate gradually improves the country’s balance of trade in the second and fourth quarters. Keywords: Exchange Rate, Inflation, Balance of Trade, Autoregressive Distributed Lag JEL Classification: F1, F4, C1

Two Crises Separated by a Decade: Political Economy of Trade Strategy and Reserves Accumulation in East Asia

This article seeks to explore the relationship between the global financial crisis (2007–2009) and the East Asian crisis (1997–1999) via the contribution of select East Asian countries, which led to the formation of the ‘global imbalance’, that is, experience of substantial and consistent current account surplus. Taking a cue from Bernanke’s ‘savings glut’ hypothesis, which has held ‘global imbalance’ to be a factor behind the global financial crisis, specifically, the article argues that in these countries, the nature of current account balance has undergone a sea change since the end of the 1990s. They also accumulated a substantial amount of foreign exchange reserves since then along with a major shift of trade regime and consequent trade surplus in all these countries. The article conjectures that the mishandling of the rescue package by International Monetary Fund could have induced them to go aggressively for accumulation of forex reserves. Thus, the two crises separated by a decade and in different continents are, indeed, linked through providing an incentive for brewing up of global imbalance via an activist trade policy in select East Asian countries. Seen in this context and from this standpoint, the two crises, indeed, appear to be close siblings! JEL Classification: F41, F62, O53

Tax evasion; public and political corruption and international trade: a global perspective

Purpose This study aims to examine the significance of public/political corruption; trade tax revenue (import and export) on tax evasion in a group of 140 countries for the period 2008–2017. Sampled countries were subsequently grouped into four clusters for further testing. With the increase in globalization and technology, there is a potential of increased tax corruption on trade tariffs revenue activities. Design/methodology/approach The empirical testing was carried out using the technical and more advanced dynamic two-step system-generalized moment method. The econometrical method solves the problem of autocorrelation and heteroskedasticity on cross-sectional data. This study used the data from World Bank, Transparency International, World Economic Forum and Kaufmann’s governance indicators. Findings There is statistical interaction between the corruption perception index (CPI) and international trade activities. Moreover, other results revealed that CPI and trade tax revenue activities are statistically insignificant to tax evasion in three groups; low corrupt countries, high corrupt and trade surplus countries although the coefficient signs remain consistent. This can be attributed by a low level of corruption in the low corrupt countries or concealment of corruption-related information in high corrupt countries and the low level of import evasion in trade surplus countries. Originality/value Based on the theory and results, public and political officials should promote good corporate governance by strictly monitoring trade revenue activities because parties involved can use technical criminality to conceal illegal behavior. Additionally, all jurisdictions should apply the economic theory of crime, especially in high political corrupt countries and perennial trade deficit countries because key macroeconomic tax revenue activities such as imports invite numerous forms of dishonesty.

The Ambiguous Effects of Targeting Trade Surpluses

Ceteris Paribus, current account surpluses may be preferable to current account deficits. Export surpluses should increase domestic GDP, and they may lend economic and political power to industries and states in domestic and international systems. However, the frame of analysis matters when considering the net benefits or costs of pursuing current account surpluses: benefits of pursuing export-led strategies may change over time, they may be unevenly distributed within a given economy, and they may create problems for trade partners, depending on the trade-boosting strategies deployed. This chapter considers potential downsides of pursuing current account surpluses over time, across economic sectors, and at the international level. It surveys work on export-led growth, neomercantilism, and import-substitution strategies in work by a range of economists in Post-Keynesian, structural development, and world-systems theories. Every economy cannot run a trade surplus all of the time: the costs of avoiding this inevitability may be greater at the global level or over time than the benefits of accruing current account surplus in the moment.