AAS Annual Meeting

Interarea/Border-Crossing Session 180

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Session 180: Asian Economy II

Foreign Direct Investment and Policy Change in India's New Media
Elizabeth (Betty) Crump Hanson, University of Connecticut, USA

The combination of expansive new communication technologies, market pressures, and government policies has spurred the growth of a privatized global communication structure. The expansive properties of these technologies and the benefits to be derived from them, have pushed many governments to adopt new policies that allow foreign entrepreneurial activity. Nowhere has the shift in this direction been more dramatic than in India. Prior to the shift, the broadcasting and telecommunications systems operated as government owned and managed monopolies. A transformation of the media environment has occurred. This paper examines the Indian government’s policies regarding foreign direct investment (FDI) in the new media and its efforts to balance pressures for more liberal versus more restrictive policies. The decision-making process has been complicated by the Indian government’s competing objectives regarding FDI. It seeks to maintain enough control to avoid a dominating foreign influence in these important sectors of the economy. At the same time it wants capital and technology that foreign firms can provide. And, equally important, it must satisfy the array of bureaucratic and business interests, as well as consumer demands. An array of interest groups, including constituencies within the government itself, have shaped the development of these policies—a veritable case study in pluralistic politics. The result is a highly complex FDI landscape for telecommunications and the media.

FDI in food trade in India: Implications for farmers and traditional markets
Sukhpal Pal Singh, Independent Scholar, India

The opening up of retail trade sector to Foreign Direct Investment (FDI) in general, and more so in food, is a major policy issue in India. There are already a number of global players in the wholesale trade, including food, who have setup shop and many global retailers are waiting for the policy change in favour of FDI and have struck alliances with domestic corporate retailers for wholesale trading as FDI in wholesale is already permitted besides limited FDI in single brand retailing. Foreign Direct Investment (FDI) in retail sector has also been a subject of analysis and discussions of various committees, studies, and bodies, official and non-official and, of course, academic analysis. Recently, the Department of Industrial Policy and Promotion (DIPP) of Government of India has also put up a discussion paper for public debate and comments. This paper discusses the existing domestic food supermarket experiences in India in section 2 and then goes on to examine the global experiences of supermarket expansion especially that of China, Thailand, Mexico, Chile, Malaysia, and Indonesia in section 3. It focuses on the practices of supermarkets in procurement and retailing from a smallholder and traditional retailer perspective in section 4. The paper concludes with discussion of regulatory issues and suggesting mechanisms for protecting the interest of smallholders and traditional retailers in the presence of supermarkets in section 5.

Determinants of Japanese Economic Assistance: A Disaggregated View
A. Maria Toyoda, Villanova University, USA

When, why and how does Japan give economic assistance? Various studies have attributed Japanese official development assistance (ODA) either to mercantilist, security or idealist motives, or as response to foreign pressure. In this paper, I wish to explore the motives at a finer-grained level than in previous studies, by disaggregating the types of aid (modality) and time periods under analysis. My main hypotheses are that loans are motivated by more mercantilist aims than grants; and that periodicity matters primarily through the channel of bureaucratic and administrative control over decision-making on economic assistance (which has shifted over time). I will use a newly available PLAID dataset to investigate.

Politics of Income Inequality and Poverty in Contemporary Japan
Hiroaki R. Watanabe, University of Sheffield, United Kingdom

This paper examines from a comparative perspective how politics contributed to the high levels of income inequality and poverty in contemporary Japan. Japan’s income inequality measured by the Gini Index remained high recently compared with the 1980s and, according to the OECD (2005, 2008), Japan’s poverty level as of 2005 (around 15%) was the second highest among industrialized OECD countries. To explain this situation, this paper analyzes the labor market deregulation policies since the 1990s and the policies related to social safety measures (such as unemployment insurance and minimum wages). The implementation of labor market deregulation policies contributed to this situation by increasing employers’ use of non-regular workers (such as agency and fixed-term workers), who receive much lower levels of wages and social security than regular workers. Relatively low levels of social safety provisions by the Japanese government (such as non-generous unemployment insurance and very low minimum wages) also contributed to this situation. It is emphasized that the analysis of politics and public policies, which is often missing in economic and sociological literature, is essential to understanding the high levels of income inequality and poverty in contemporary Japan. Theoretically, this paper aims to demonstrate that convergence in socio-economic policies among coordinated market economies (CMEs) under globalization, a main tenet in the ‘varieties of capitalism’ literature, is not sustainable, as there are differences among CMEs in their policies related to labor market deregulation and social safety measures as well as their levels of income inequality and poverty.

Denationalizing State Sovereignty: An examination of Japan's macroeconomic policy after the collapse of embedded liberalism
Takaaki Suzuki, Ohio University, USA

During the early decades of the postwar era, Japan stood at the forefront of what was known as the " East Asian developmental state model". Although this model produced outstanding results in the early postwar period, the model came under increasing criticism as Japan's economy slid into a prolonged period of stagnation following the collapse of the bubble economy, and a new economic paradigm, based on neoliberal principles, was embraced by the political party in power. By examining this transition, this paper will demonstrate that Japan's political party in power did indeed scale back the role of the state in many economic regulatory and welfare-related areas, but the state took on a much greater though often hidden role in areas that helped preserve the stability of a more liberalized and financialized market. Hence, while many past policies that were associated with the developmental state model have been discredited and curtailed, the actual size and role of the state has expanded nonetheless. Consequently, in the case of Japan, the rise of neoliberal globalization has been accompanied by the erosion of the developmental state model, as neoliberal proponents would advocate, but not the role of the state per se, a point that clearly contradicts the basic anti-statist tenet of neoliberalism. To illustrate this point empirically, I focus primarily on Japan's macroeconomic policies since the early 1980.