Tuesday 21 Jan 2020 | 16:14 | SYDNEY
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Stephen Grenville's picture
People | experts Stephen Grenville
Nonresident Fellow
Lowy Institute
Stephen Grenville's picture
Areas of ExpertiseRegional economic integration; Australia's economic relations with East Asia; international financial flows and the global financial architecture; financial sector development in East Asia

Credit rating agencies must do better

Standard and Poors' credit ratings. (Wikipedia.) Foreign investors learn about the Australian economy from a variety of sources, but the credit rating agencies (CRAs) have a special place, as many investment managers are committed to following the rating agencies' assessments. As well, the CRA

The limits of Indonesia's anti-corruption campaign

'Fight corruption!' A Corruption Eradication Commission event in Bandung in 2009. (Flickr/Ikhlasul Amal.) Indonesia's reputation for corruption in not in doubt: it comes 114th out of 177 in Transparency International's ranking. For more than a decade, the Corruption Eradication Commission (KPK)

The long term damage of the global financial crisis

One of the messages of John Edwards' Beyond the Boom is that Australia sailed through the 2008 crisis unscathed. As a result, Australia's GDP in 2013 was 16% higher than in 2007, while many of the G7 countries had barely regained their pre-crisis GDP level: the strongest rebound, in Canada, was only

Infrastructure: An opportunity for emerging economies

Low global interest rates since the 2008 global financial crisis seem to provide an ideal opportunity for boosting infrastructure investment. Bond rates have been historically low, so many governments can borrow at less than the rate of inflation. There is spare productive capacity in most advanced

The limits of 'the Great Convergence'

Economic convergence — the potential for poorer countries to catch up with the richer countries — may be the most important economic narrative of the post-World War II era. More than a billion people have shifted out of extreme poverty, largely by adopting technology and techniques already

Resources boom: Australia's misplaced pessimism

'We'll all be rooned,' said Hanrahan, 'before the year is out.'   Pessimism is a key part of the great Australian tradition, reflecting a history of booms and busts. It has infected the debate on the mining boom of the past decade. But how does it make sense to treat a once-in-a-century windfall

Asia's coal demand: You ain't seen nothing yet

Sam Roggeveen yesterday showed us how much demand for coal has risen in Asia during this century. Now consider what the future will hold. A recent joint publication from the International Energy Agency and the Economic Research Institute for ASEAN and East Asia forecasts what is in store for the

Global financial crisis: Did the system really work?

Much of the mountain of commentary and analysis of the 2008 Great Recession has been either critical (Paul Krugman might be typical), or a self-interested defence (Tim Geithner and Larry Summers provide examples). Daniel Drezner's The System Worked is atypical in two respects: he was not a

Foreign-investment anxiety revealed in Lowy Poll

I've just written on the widespread antipathy in Indonesia to foreign investment, and how it is colouring the presidential election campaign. I attributed this hostility to the historical experience of colonialism. Now the Lowy Institute's annual poll reminds us that a similar (if less pronounced)

How to manage economic nationalism in Indonesia

Both Indonesian presidential candidates have taken a strongly nationalistic stance on foreign investment in their pre-election campaigning. When one of them takes office in October, will they be 'mugged by reality' and soften their stance? If not, how much does it matter? When Indonesia achieved

The other income-equality debate

Rock-star economist Thomas Piketty is getting headlines for his book on income distribution,  mainly focused on disparities within advanced economies. This might be the moment to ride the wave of attention and record something of the long-running parallel narrative on emerging economies. If

Why Australia needs an intelligence inquiry

I've already had the opportunity to argue that listening in on the wife of Indonesian president Susilo Bambang Yudhoyono (and the subsequent defence of these actions) is clear evidence that our intelligence people have lost that essential quality, their sense of judgment. I was struck by Allan Behm'

The three arrows of Abenomics: A report card

Today the Japanese value-added tax (VAT: what Australians call the GST) rises from 5% to 8%. This seemingly mundane event is a key part of the 'Abenomics' program, the effort to shake Japan out of its decades-long economic lethargy. So how does Abenomics look after 15 months? Exhibit 1 is the sharp

Why China is unlikely to have a 'Lehman moment'

Financial markets are worried about the Chinese financial sector, with some even talking about the possibility of a 'Lehman moment', which would set off a major financial meltdown, as occurred in America in 2008. This would be very serious not just for China but for the global economy. China still

A union with New Zealand for a larger Australia?

There are various possibilities for a Larger Australia. Michael Fullilove's path is to put more of our national resources into defence and diplomacy, as well as growing our population through increased migration and fertility, creating an Australia which walks taller on the world stage. A very

The Australian economy: How does it compare?

The meeting of the G20 finance ministers and central bank governors in Sydney next weekend provides an excuse to turn the spotlight inwards, towards the domestic economy. The IMF begins its new report on Australia this way: The Australian economy has performed well relative to many other

Hockey's speech and global monetary-policy spillover

In his speech at the Lowy Institute last week, Australian Treasurer Joe Hockey made a clear case for international policy coordination: 'in a globalised world every policy action taken in isolation has a spillover'. Specifically, this month's G20 meeting of finance ministers and central bank

What can be done about income inequality?

The income-inequality debate is an old one, but it’s getting renewed interest, most recently from President Obama in his State of the Union address, where he advocated raising the minimum hourly wage from $7.25 to just over $10. He also spoke of the closely related issue of social mobility (a '

A mug's game: Forecasting China's economic future

Forecasting is a mug's game, but we can't resist. Economists usually take a stab at the central growth forecast and then add a shopping-list of things that might go wrong. If you enumerate enough risks, there are built-in excuses when the central forecast doesn't happen. Inscrutable China provides a

International economy: What's in store for 2014?

Let's start with the global economic outlook. A common view is that advanced economies are at last on the mend and will take over the running from the emerging economies, which have provided much of world growth since 2008. The US and the UK seem likely to do better this year, because both are

Spying on Kristiani Herawati: A loss of judgement

The Weekend Australian carried a ‘well-sourced’ article defending our listening in on Kristiani Herawati, Indonesian President Susilo Bambang Yudhoyono's wife. Quoting the usual ‘well-connected insider who asked not to be named’, it argues that she was a legitimate target because she was

Does monetary policy need to be reinvented?

There is a widespread view that monetary policy has been fundamentally changed by the 2008 financial crisis. The IMF’s Chief Economist Olivier Blanchard says that ‘Monetary policy will never be the same’. Policy certainly explored new areas in response to unusual circumstances, but when the

The Trans-Pacific Partnership: Where have we got to?

The latest round of negotiations in Singapore for the Trans-Pacific Partnership (TPP)  wound up last week, still a long way short of agreement. Negotiators will meet again in January.  Thanks to WikiLeaks and other seepages from the confidential negotiations, the public discussion is starting to

GrainCorp and the complexity of foreign investment

The Australian Treasurer's rejection of the $3.4 billion take-over bid for grain handler GrainCorp by American firm Archer Daniels Midlands (ADM) has set a number of confusing and conflicting arguments running. It looks like a narrow issue dominated by domestic politics, but raises wider national

Infrastructure: Overcoming sovereign-debt phobia

Infrastructure is high on the agenda for G20, yet most aspects of infrastructure are essentially domestic policy matters, with little need — or room — for international cooperation. So what exactly might the G20 do?  There is a disconnect between the many viable infrastructure projects in

Spying on Indonesia: Apologise and learn

We have blundered. The Wise Heads are saying that we should tough this out, simply asserting that everyone does it. In fact we've gone a bit further. We've confirmed that we think if you can do it, then you should: 'The Australian government uses all the resources at its disposal'. They say the

Will Asia's rapid growth continue?

Convergence – the catch-up process whereby poor economies grow substantially faster than the mature economies – may be the most important economic story in the past fifty years. It is transforming the world, shifting hundreds of millions out of abject poverty while simultaneously shifting the

Secrecy, intellectual property and the TPP

WikiLeaks has turned its attention to the Trans Pacific Partnership. The press, in Australia and overseas, has noticed.  The Interpreter has previously drawn attention to the complex issues (some would say the downside concerns) of the Trans Pacific Partnership. The negotiations can be seen as

QE has global effects, needs global coordination

The unwinding of quantitative easing (QE) has been postponed for the moment. Financial markets have regained their composure and their panicky flight from emerging economies (notably India and Indonesia) has reversed. But the ‘taper’ of QE must inevitably occur: the emerging economies have a

Indonesia 2014: Jokowi or bust

You can't read a paper or watch TV in Indonesia without coming to the conclusion that Joko Widodo ('Jokowi'), the mayor of Jakarta, is a shoe-in for the 2014 Indonesian presidential election. Not only is he the front runner in most polls, he is ubiquitous, getting footpaths fixed, sorting out

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