Search results

This chapter examines US Africa Policy under Obama with a particular focus on the Southern African region. The author examines American policy from a historical perspective to give credence to his view that while certain changes have occurred in American global and Africa Policy in particular, it is the issues that have changed, and the drivers of that policy change but the fundamental basis of the American policy has not changed much. American policy has remained anchored on global hegemony driven by the increasingly frayed Washington consensus as expressed initially in its Cold War rhetoric and stance against the former USSR and its perceived allies and now against terrorism.

This work examines the existing literature on Southern African history and politics written by scholars and observers including regional heads of state like Nyerere of Tanzania and Kenneth Kaunda of Zambia. This study also draws from the author’s knowledge and experiences as a citizen and observer over the years of the many facets of vicissitudes of regional politics and is interface with international foreign policy pressures and interests. This work thus, draws from the literature on and about regional politics and international relations over the years coupled by the author’s personal experiences.

This chapter makes clear link between Cold War politics and current American foreign policy on African and the Southern African region in particular. In fact the US anti-terrorism rhetoric has remained consistent during and after the Cold War. During the Cold War, liberation movements in Southern Africa fighting to end colonial rule and racist apartheid regime were declared terrorist movements and hence the subject of US hostility especially given these movements’ support for arms and materials from the USSR and China. USSR was manufactured as the organizer of international terrorism. Proxy wars were waged to deal with these movements and their supporters such as the war in Angola where the United States supported dubious and questionable characters like Jonas Savimbi of the National Union for the Total Liberation of Angola (UNITA) and Holden Robert of the Front for the National Liberation of Angola (FNLA) and Zairian dictator, Mobutu SeseSeko. While FNLA was widely accepted as a CIA outfit, Mobutu was imposed by US intelligence support (CIA) against a popular leader, Patrice Lumumba, who was assassinated shortly after independence.

At the end of the Cold War a new form of terrorism manifested itself in the form of Muslim Jihadists who on the continent were seen to emerge in East Africa and the Horn of Africa and the American fascination has been to ensure that this terrorism does not afflict the rest of the continent and the Southern African region in particular. Support to African governments has shifted from the initial years of confused neglect complimented with ambivalent engagement and finally, to humanitarianism. This has taken the form of the support to Africa to fight HIV and AIDS so as to harvest a favourable ground among African governments. This was seen as helping to ensconce American support in the region and weaken the ground for the Al Qaeda intrusion, real or imagined. It was also hoped that this might help counter growing Chinese influence. It is not entirely surprising too that the economic and strategic focus has been to sustain a declining hegemonic position especially in a region where Chinese investments and influence have outstripped American and Western influence.

Commercial diplomacy within the EU is currently a matter for the individual EU member states (MS). This results in different policies and practices. But to what extent do they really differ? This chapter presents the results of a comparative study on EU MS commercial diplomacy policies and practices. The policy goals and practices of all 27 MS were assessed via document analysis and interviews with commercial diplomats. The findings show considerable differences in terms of the responsible ministry, the policy focus, the network of foreign posts and the work performed at the foreign post. However, countries that entered the EU first seem to have similar commercial diplomacy policy and practices characteristics, as do the countries that entered the EU after 2003. Furthermore, the results of statistical tests show that countries that entered first are similar in size, wealth, share of EU trade, number of embassies inside the EU, number of employees at the foreign post and the activism of the foreign post. These similarities apply as well for the countries that entered the EU after 2003. Overall, this study concludes that home country characteristics (size, culture, government), host country characteristics (institutions, culture, regime) and the relationship between a home country and a host country affect the commercial diplomacy policies and practices.

This chapter examines how foreign banks respond to domestic monetary policy in host countries during crisis periods, in particular, the response shown toward the Asian financial crisis of 1997–1999 and the global financial crisis of 2008–2009. By observing 283 domestic and foreign banks in seven emerging Asian economies, we find that foreign banks are slower than domestic banks in adjusting the growth of their loans to changes in host monetary policy. This inertia by foreign banks is found to be more pronounced in the recent 2008–2009 global crisis than in the 1997–1999 Asian regional crisis, suggesting that the buffering/hampering effects of foreign banks on the effectiveness of the domestic monetary policy transmission mechanism become stronger in a recent global crisis originating from outside Asia than a regional crisis imploded within Asia a decade earlier. We also find that foreign banks’ lower sensitivity than domestic banks to host monetary policy during the crisis periods is heterogeneous, depending on factors such as the extent of the adverse impact of crises on parent banks, the scope of business operation by parent banks, and foreign banks’ mode of entry into host banking markets.

The global slack hypothesis is central to the discussion of the trade-offs that monetary policy faces in an increasingly more integrated world. The workhorse New Open Economy Macro (NOEM) model of Martínez-García and Wynne (2010), which fleshes out this hypothesis, shows how expected future local inflation and global slack affect current local inflation. In this chapter, I propose the use of the orthogonalization method of Aoki (1981) and Fukuda (1993) on the workhorse NOEM model to further decompose local inflation into a global component and an inflation differential component. I find that the log-linearized rational expectations model of Martínez-García and Wynne (2010) can be solved with two separate subsystems to describe each of these two components of inflation.

I estimate the full NOEM model with Bayesian techniques using data for the United States and an aggregate of its 38 largest trading partners from 1980Q1 until 2011Q4. The Bayesian estimation recognizes the parameter uncertainty surrounding the model and calls on the data (inflation and output) to discipline the parameterization. My findings show that the strength of the international spillovers through trade – even in the absence of common shocks – is reflected in the response of global inflation and is incorporated into local inflation dynamics. Furthermore, I find that key features of the economy can have different impacts on global and local inflation – in particular, I show that the parameters that determine the import share and the price-elasticity of trade matter in explaining the inflation differential component but not the global component of inflation.

This chapter examines spillover effects of global monetary shocks on lending by foreign banks in an emerging country, South Korea. Foreign banks play a significant role by providing additional domestic credit and foreign currency liquidity and directing international capital flows via the banking sector. Using macroeconomic and banking data for the period of 2000Q1–2016Q2, the authors present evidence that foreign bank branches in Korea have responded in providing their foreign currency loans with one-quarter (three months) time lag to changes in monetary policies in their home countries (mainly, the United States and the Euro area). This short-run spillover effect of monetary policy shocks from the home countries to foreign banks in Korea seems consistent with the main findings from our bank-level data analysis. This chapter also discusses useful policy implications.

This chapter discusses Malaysia's foreign economic policy and trade performance. Since independence, Malaysia has been active in regulating its foreign economic policy. The policy is aimed at making the country a nation that welcomes friendly and fair policy through diplomacy and simultaneously maintaining its honorable sovereignty and local interests. In 2018, the Malaysian government outlined its foreign policy framework that emphasises four (4) major components, namely, (1) the direction of foreign policy, (2) empowering the Ministry of Foreign Affairs – MOFA (Wisma Putra), (3) enhancing interagency collaboration and lastly, (4) increasing public and civil society participation. Through the framework, Malaysia has been strengthening its international relations, particularly among Islamic nations and the European Union countries. In terms of trade, Malaysia has been increasing its trade and this can be seen in its trade surplus performance. For more than 20 consecutive years, Malaysia has experienced trade surpluses. However, the recent COVID-19 outbreak has dampened the country's economic growth. Despite the detrimental impacts of the outbreak, Malaysia remained positive about strengthening the economy in the future. In terms of trade partners, Malaysia has built close relations with China, Singapore, the United States, Hong Kong, Japan, Thailand, India, Taiwan, Vietnam, and South Korea. In terms of export products, Malaysia mainly exports electrical and electronic products, petroleum products, chemicals and chemical products, LNG, manufactures of metal, machinery, equipment and parts, optical and scientific equipment, palm oil, crude petroleum, and rubber products. Even though trade has caused several issues such as overdependence on import product, Malaysia has maintained a positive outlook on trade. Trade helps fulfill the domestic demand in which local producers are not able to satisfy. Other than that, Malaysia also consistently produced goods that are demanded by other countries. In conclusion, Malaysia will always forge ahead to improve its international economic relations and to gain benefits from the international economy and world trade.

The objective of this chapter is to provide a first assessment on the evolution of spatial distribution of foreign firms in China.

We examine the overall changes in the location of foreign firms in China over the period 1999–2009. Then, we distinguish two time periods, 1998–2001 and 2002–2009 so as to analyze whether foreign firms’ agglomeration across regions has changed significantly after the China’s entry into the WTO (2001) and the first launch of the Chinese government policies to develop western internal areas.

Our analysis suggests that foreign-invested enterprises (FIEs) with higher foreign capital shares are more geographically clustered in coastal regions than other enterprises with lower foreign capital shares. This group with the highest intensity of foreign involvement in firm capital also experienced the most relevant changes over the decade of our analysis becoming more localized between the core-periphery divide (coastal provinces and the rest of mainland China).

The main limitation refers to poor data availability, data matching problems, and measurement errors in the database used, as highlighted by Nie, Jiang, and Yang (2012).

A general analysis of location patterns and the role of public policies may inform foreign companies in their entry strategy in the Chinese market.

Very few studies have explored location patterns with detailed geographical data and, at the same time, with data disaggregated by foreign ownership shares.