Japan and China Economy in Senkaku/Diayou Island Dispute

Economy is in a state can not be separated. Because the economy itself can also be a benchmark for a country, where countries are classified as developed countries or developing countries. Economics itself is also associated with the sectors - sectors such as investment, trade (export and import), economic cooperation, the income countries (foreign exchange), natural resources and human resources, and economic growth. Economics is also a key pillar of a state in running the country and the economy could also be a way to explore cooperation between countries. In addition to the economy it can also be used as the initial or base of an inter-state problem (conflict or dispute).

The condition of the Japanese economy and China can be said to be very good. Both countries are the largest economic power in Asia, while Asia is the region with the most dynamic economy in the world and be an engine for the global economy. Any confrontation between the two countries will surely raise international concern about the stability and peace in Asia.

In the case of a dispute Senkaku Islands / Diaoyu between Japan and China, the Chinese continued to press claims sovereignty of the island and surrounding waters because these disputed areas suspected of having huge resources of oil and natural gas, similar to the disputed Spratly Islands in the South China Sea. Estimated 2005, the oil resources in the East China Sea is 100-200 billion barrels, enough to provide a good source of energy for the country 50-80 years. Access to oil resources is a priority for China as the second largest consumer of oil after the United States. This strain also harm the economies of both countries, which is mutually tegantung. According to the input-output toWorld Database, the contribution of Chinese demand for Japan's GDP in 2009 was 2.7%. Similarly, Japanese demand accounted for 2.1% of China's GDP. Interdependence is caused by cross-border production network between the two countries. However, intensify their antipathy among nations have weakened the economic relations between the two countries. Direct investment from Japan to China in the first half of 2014 decreased by 49% compared to the previous year's figure.

Through this dispute conflict can be seen that thing - things that support the economy of one of the triggers of conflict, such as the location of the island is very strategic and the amount of content of the natural resources contained within the island. By doing so the wheels of the economy of both countries to be disrupted.

I Made Danan Jaya (1801406622)

The Weakening of Rupiah

These days, the Indonesian rupiah (IDR) trades at roughly 13,000 to one U.S. dollar (USD), its weakest level since 1998. The ongoing currency depreciation may pose the greatest threat to Indonesia’s economy in more than a decade unless the government acts decisively to rectify the situation.

Rupiah changing unstable will extremely affect the macroeconomic in Indonesia. In outline, there are several variables that affect macroeconomic Indonesia, namely, the first is associated with the exchange rate of value balance of demand and supply on the domestic currency and  also foreign currency. The second is the interest rate, which will take place in the value of bank interest rates and will have an impact on changes in investment in Indonesia. The third  is the occurrence of inflation, rising prices in general and continuous, as a result of increased public consumption, and surplus liquidity in the market that trigger continuous consumption. The weakening of the exchange rate is also fueled by rising fuel imports made by Pertamina. Great fuel imports made the trade balance deficit and pressing needs of foreign currency in the country.

Currently, the ailing Indonesian rupiah is unlikely to find much assistance from the global economy, as the US recovery reduces the investment appeal of emerging markets, and ongoing weaknesses in Japan, China, and Europe damage the market for exports. Consequently, to stabilize the situation in response to both foreign and domestic factors, the economic community must look to Indonesia's President, Joko Widodo and Bank Indonesia (BI), the country’s central bank. 

Jokowi’s efforts to limit the central government’s budget have been commendable, especially in fuel price policy reform. Now, as we know Indonesia faces its worst currency crisis in 17 in recent years, the president must exercise strong monetary policy acuity, working in tandem with Bank Indonesia to stop the fall of the rupiah. 

Mega Indah Putri Utami
18101404251

Trade between Indonesia and EU

Delvia Erfani Olii

1801405424

this time is about Indonesia and EU,

The EU and Indonesia signed a Partnership Cooperation Agreement in 2009.

Intense contacts have taken place since 2011 to explore the possibility to further deepen EU-Indonesia relations and negotiate a Comprehensive economic partnership agreement. Indonesia is the largest economy in the Association of South-Asian Nations (ASEAN) representing 40% of its GDP and population (244 million inhabitants). However, it ranks only at the fourth position inside the region as EU's trading partner (and 29th overall), with a bilateral merchandise trade just reaching €23.5 billion in 2011. Total trade in commercial services between EU and Indonesia in 2011 amounted to €3.7 billion and represented more than 14% of the total trade.  

The co-operation between the EU and Indonesia is ensured mainly through the EU-ASEAN Dialogue which includes discussions on trade and investment issues at ministerial and senior economic official levels. Indonesia is one founding member of the 10 members of the Association of Southeast Asian Nations (ASEAN). The ASEAN countries as a group are the EU's fifth largest trading partner outside Europe, after the United States, China, Russia and Switzerland. Bilateral trade in goods between the EU and ASEAN reached some €164 billion in 2011. Negotiating better access for EU exporters to the dynamic ASEAN market was identified as a priority under the 2006 Global Europe trade strategy.

After Free Trade Area negotiations between the EU and a group of ASEAN countries proved difficult, in December 2009, the EU decided to pursue negotiations towards free trade agreements with individual ASEAN countries, beginning with Singapore and followed by Malaysia and Vietnam. That said, the EU is not losing sight of the ultimate goal of achieving an agreement within a regional framework. Indonesia currently enjoys trade preferences with the EU under the Generalised Scheme of Preferences. That said, the EU is not losing sight of the ultimate goal of achieving an agreement within a regional framework: bilateral negotiations with ASEAN members would constitute building blocks towards a future region-to-region agreement.

Indonesia and The WTO Dispute Settlement System

Delvia Erfani Olii

1801405424

Indonesia's participation in the WTO. Indonesia has been a WTO member since 1 January 1995 and  a member of GATT since 24 February 1950. also Indonesia is a member of these group in theses negotiation such as Asian developing members, APEC, ASEAN and etc.

in general, opportunities and obstacles faced by the developing countries must also be experienced by Indonesia in its activities when getting involved in the settlement process of international trade dispute in the World Trade Organization (WTO). Indonesia's participation in the WTO. Indonesia has been a WTO member since 1 January 1995 and  a member of GATT since 24 February 1950. also Indonesia is a member of these group in theses negotiation such as Asian developing members, APEC, ASEAN and etc. The consequence of the position of Indonesia as a developing country is that its position becomes weak when dealing with the developed countries. This happens due to the difference of economic power among the states that become the members of the World Trade Organization (WTO). This happens due to the difference of economic power among the states that become the members of the World Trade Organization (WTO).

According to Christina L. Davis, there are four reasons why the legal-based dispute settlement system can help the developing countries when litigant with particularly the developed country,1 among other things, first, the availability of the option to file a lawsuit gives strength to the developing countries to force the developed countries to come to the negotiating table to discuss their interests. Second, the dispute settlement system such as Disputes Settlement Understanding (DSU) has made the international trade law as a benchmark to reach an agreement. Third, using a mutually agreed rules will facilitate developing countries to get allies who have similar interests to support their case. Fourth, long-term economic interests can be used to support the regulationsto encourage the compliance with the regulations. the Disputes Settlement Understanding (DSU) is one of the best achievements oneof the World Trade Organization (WTO), there are still several drawbacks in the WTO dispute settlement system that could potentially cause problems for the developing countries to obtain maximum results.

The World Trade Organization (WTO) dispute settlement system (managed under the Dispute Settlement Understanding, DSU) is undoubtedly one of the principal achievements of the WTO, representing the most widely used intergovernmental dispute resolution system in the world. In its first seventeen years, the WTO DSU has seen 452 requests for consultations made, resulting in 167 panel reports and 103 Appellate Body reports.

The purpose of this Information Note is to examine in particular the participation of Asian countries2 in the DSU. Predominantly comprised of low income and low middle income countries,3 statistics on the region’s engagement in the DSU will be illustrated and analyzed to look at behavioural patterns in its participation and to determine whether the constraints on capacity often associated with developing states also apply to certain Asian countries.

Globalization and Economy

Globalization is a messy term that encompasses a wide variety of human activity. As you may be aware there are trade statistics and other economic facts that suggest the world is becoming increasingly globally integrated (Held et al.1999: 169-75).  For the hyperglobalist, globalization is the consequence of information and communications technology as well as capitalism and the main elements is global economy. Globalization has made it easier to develop non-government organizations (NGOs) that promote and disseminate a certain set of political values.  The globalization and economy very related with liberalism, especially neoliberalism.

Because in neoliberalism based on the principle that human welfare is best promoted by economic growth and reducing the interference of government in private sector. And neoliberalism support measure that enable trade and finance to have unrestricted movement across national boarders. These policies attempt to ‘roll back’ the state and the role of government, and leave decisions about allocation, production, and distribution in the econmy to the global market.

            In this globalization era, many global economic institutions has rises like international monetary fund (IMF), world bank, and world trade organization (WTO). And they have a important act in world’s economy. And in globalization era the economy more increasingly, important, and complicated so the economy in this era has a lot of problems but it has a many benefits. Many new economy actor rises in many countries in this era and they have a influence in their countries, so that they can help their country in problems especially in economy like reduce the unemployment, increasing the economy, make the economy activity more variation,etc. And country began to build a connectifity in economy with other country or in regional. They start to make a policy that they can do trade and business easier like free trade or make a free trade area in the regional.

I Made Danan Jaya

1801406622

Currency War: China

Author : Carnesia Deswara Chandra (1801400480)

The currency war is still continues, with Euro as the loser to USD. While China facing various difficulties in reaching their expected economic growth by 7% which would be the lowest economic expansion in approximately 25 years for the Asian country. The situation might get worse before it gets better as for instance investment, consumption and production growth levels have fallen and became an extremely bad sign. This slow growth rate of China will lead to an impact that will be felt all over the world.

Strengthened by the lower expected inflation rate, many of China's banks eased its monetary policy. China more likely to weaken the yuan. a weaker yuan would help prop up export earnings, boosting growth and create jobs in an economy that grew at its slowest pace in 2014. China's central bank allowed yuan to gradually decline and it has fallen 2.3% against dollar since the last November. In this situation, the world's focus would be the decision made the USA, if everyone is going to reduce their currency values, it would be an economical suicide for USA if they decided to increase their interest rate and make the USD more appealing to foreign investors.

Premier Li Keqiang said in a report to lawmakers that the exchange rate would be kept at reasonable and balanced level. While avoiding currency weakness, policy maker relied on interest-rate cuts and reduced reserve requirement at banks to support economic growth. While the others are trying to reduce their currency values, China quietly trying to steal more and more of the global market. In order to win the battle, China did various efforts to win its favor and become the leading offshore for reminbi transaction is well chronicled, and now China is promoting Yuan as world beating. Yuan accounts for 2.6% of global transaction and that's up from 1.39% a year ago. If US lose the currency war, China will likely to be the long term winner.

Small Medium Enterprises in Indonesia

          Indonesia has a large population, with the large population Indonesia become a country who has a higher economy. And the economy activity in Indonesia has a big influence, If the economy going down any sector will get that influence. Know that Indonesia has a large population and the economy activity has a big influence, its make the Indonesia peoples began to establish some simplicity enterprises who called small medium enterprises. Does not rule out the possibility that these enterprise will be a big enterprise later. And of course it will make many jobs and can accommodate many jobseeker in Indonesia and Indonesia unemployment rate will be suppressed. But these small medium enterprise still focus in food and baverages sector and in fashion sector.

            See this progress, the Indonesia government looks like a quiet and lacking of attention. Many these small medium enterprises has a difficulties in terms of capital, permits to do business, registration to do business and their lack of participation of the government in the protection of the rights of their business as well as protection from the piracy of their product. So many of these small medium enterprises are bankrupt, does not have a clear direction of business, not able to pay their employees and difficult to competing with foreign businesses and product.

            The existence of these problems, it is time for the Indonesia government to care about this small medium enterprises. Maybe the government could start by providing training to small medium enterprises  and provide convenience permission in business and provide interest-free capital loans for small medium enterprises. And provides protection their products from piracy and helps in competing with foreign firms and product. So that, the small medium enterprises will become kore developed and feel protected in business. And it will increasing the Indonesia economy, make many jobs, can accommodate many jobseeker in Indonesia and Indonesia unemployment rate will be suppressed.   

I Made Danan Jaya (1801406622)