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NYT: North Korea says it’s ready to talk. WashPost: Republican extremists take control. Independent: Europe struggles to create jobs.
North Korea says it’s ready to talk
Former US President Jimmy Carter writes in the New York Times that Pyongyang has made clear that it wants to resume negotiations over its nuclear program. He states that North Korea has been concerned over increased sanctions but wants to discuss denuclearization.
QUOTE: A settlement on the Korean Peninsula is crucial to peace and stability in Asia, and it is long overdue. These positive messages from North Korea should be pursued aggressively and without delay, with each step in the process carefully and thoroughly confirmed.
Don’t appease China
Michael Danby, a federal MP, Carl Ungerer, director of the national security program at the Australian Strategic Policy Institute, and Peter Khalil, an adjunct associate professor at the Centre for International Security Studies at the University of Sydney, write in the Australian that Australia should not appease China. They argue that Australia must live peacefully with China, but it must also seek to support the United States as a balance to the totalitarian state.
QUOTE: The principal counterweight to Chinese hegemony in our region is the US and its system of alliances with Japan, South Korea, Taiwan and Australia. It is in Australia's most vital strategic interest that the US presence in our region is not weakened or undermined.
New perspectives in securing financial stability
Mario Draghi, chairman of the Financial Stability Board and governor of the Bank of Italy, writes in the Financial Times that the global financial system is undergoing a deep transformation. He argues that there is now a different perception of risk, and there is an understanding that reform of the financial sector is necessary.
QUOTE: Lehman was the first global systemically important institution that was allowed to fail during the crisis. It was also the last. The public will not, and should not, accept more such bail-outs. Addressing the problem of “too big to fail” is therefore the next central step in the reform program.
Times of crisis require a strong IMF
Michael Spence, professor of economics at the New York University Stern School of Business, writes on Project Syndicate that the 2008 financial crisis revealed the importance of the International Monetary Fund (IMF) to the global economy. The IMF is necessary in times of crisis to help nations achieve stability.
QUOTE: The system needs circuit-breakers in the form of loans and capital flows that dampen the volatility and maintain access to financing across the system. A well capitalized IMF, much better capitalized than pre-crisis, should be able to fill this backstop.
Japan’s pension funds will see trouble ahead
Senior strategist Kengo Nishiyama and strategist Hiroshi Nakanishi at Nomura Securities Tokyo write in the Wall Street Journal that pension funds are likely to pose a risk to Japan’s economy. Japanese companies’ investment portfolios are not big enough to afford the retirement promises.
QUOTE: Economic growth, coupled with tighter accounting oversight, is the best way to pull Japanese companies out of the pension hole. Strong growth would allow companies to earn the money with which to shore up their pension funds, while also boosting the value of those pensions' portfolios.
Time to shift priorities in US-Japan relations
Jim Foster, vice president of the American Chamber of Commerce in Japan, and Don Kanakis, a former president and chairman of the same organization, write in the International Herald Tribune that the new cabinet in Japan offers the time for a fresh start in relations between the United States and Japan. The allies should focus their energy less on import restrictions and Okinawa and more on other security and economic issues.
QUOTE: Both countries face similar problems of unsustainable deficits, low growth and divided domestic politics. Priorities need to move from small to strategic, from bilateral to multilateral, from old battles to new opportunities, and from “zero-sum” to “growing the pie.”
Republican extremists take control
Columnist E.J. Dionne, Jr., writes in the Washington Post that the Republican Party’s extremist, right wing candidates have won control of the party over its moderates.
QUOTE: After two decades in which moderates fled a party increasingly dominated by its right wing, the Republican primary electorate has been reduced to nothing but its right wing.
Seoul strives for a stable real-estate market
Jasper Kim, an associate professor at the Graduate School of International Studies, Ewha Women's University in Seoul, writes in the Wall Street Journal that South Korea has had a difficult time figuring out what are normal market real estate prices, and what indicates a bubble.
QUOTE: The key is to help homebuyers make decisions based on market conditions and not merely policy expectations. This is exactly what Seoul wanted all along: a stable, rather than speculative, real-estate market.
Europe struggles to create jobs
Hamish McRae argues in the Independent that the European Union has struggled to create jobs because strict labor legislation that protects workers’ rights has dissuaded employers from hiring, jobs have been lost to outsourcing, and the recession has hit the continent.
QUOTE: Europe is not uncompetitive. It is just not very good at creating jobs. Unemployment is high by developed world standards: the eurozone average of 10 per cent is higher than the UK, Canada, Australia, Japan, and even a little higher than the US. It has also been persistent. For example, between 1995 and 2005 the average level of unemployment in France was 10.6 per cent.
Sri Lankan economy stays strong despite political changes
Robert M Cutler, senior research fellow in the Institute of European, Russian and Eurasian Studies, Carleton University, Canada, writes in the Asia Times that the consolidation of power in the hands of the Sri Lankan president has worried foreign investors. However, the economy has not shown immediate signs of being adversely affected.
QUOTE: Whatever doubts Sri Lanka's local and overseas investors had about constitutional amendments reinforcing President Mahinda Rajapaksa's already appreciable powers, they did not show up in the stock market in the week since parliament approved the changes.