2005

1. Research and Studies on Regional Financial Cooperation in East Asia

1. “Regional Coordination of Policy Measures Forward”
Commissioned by ASEAN Secretariat, IIMA presented practical suggestions and recommendations on future policy cooperation in East Asia which included the phased introduction of currency-basket system composed of currencies of the region. On this study, we took into consideration the current exchange rate controls by the authorities, slow accomplishment of internationalization of the local currencies and the past experience in Europe. IIMA acted as a lead institution to prepare the report together with the research institutes in Singapore, Malaysia and Korea.

2. “Financial Cooperation in East Asia on the Exchange Rate Stability and Prevention of Future Financial Crises”
The Network of East-Asia Think-tanks (NEAT) was established in 2003 to advise the ASEAN+3 Summit Process. Under the auspice of the Japanese Ministry of Finance, IIMA established a working group to study the financial cooperation in the region from the medium to long-term standpoint and submitted a report.

2. Research and Studies on Currency and Foreign Exchange Rate System

“Study Group on Currency and Foreign Exchange Rate System”
After reviewing the available theoretical and experimented studies on Asian foreign exchange rate system, IIMA had pragmatic discussions to explore the possible ways to develop future monetary and exchange systems in Asia and summarized the points of the discussions. The research group was consisted of mid-career researchers and economists from academic field, think-tanks, financial institutions, and rating institutions. In the research group, we invited market members of Hong Kong and Singapore. At the same time, researchers from IIMA visited Malaysia, Indonesia, Singapore and Thailand to obtain fresh and detailed information and exchange views with the local market players,.

3. Technical Assistance on Fostering Asian Bond Markets

“Technical Cooperation on Establishing the Settlement Institution in Vietnamese Bond Market”
IIMA continued to work on fostering the bond market that would be the core of the Vietnamese capital market. In FY2005, regarding the settlement system development at the Vietnam Securities Depository which was scheduled to be established in 2006, IIMA organized a working group (WG) mainly composed of officials from National Securities Commission and had very intensive discussion. Later we provided feedback of the WG to the relevant persons in a form of workshops. Among the draft of the Securities Law which was scheduled to be submitted to the National Assembly in May 2006, IIMA confirmed and verified the content of the article regarding of Vietnamese Securities Depository.

“Study on Measures to Promote the Internationalization of the Japanese Yen from the Perspectives of Japanese Financial Institutions and Multinational Enterprises”

1. Financial Regulations in China, South Korea and ASEAN Countries and Business Expansion of Japanese Corporations
   IIMA conducted researches on the major financial regulations in China, South Korea, Thailand, Malaysia, Philippines and Indonesia, and examined how those regulations discouraged Japanese financial institutions and multilateral corporations from expansion of their businesses in these countries. We also studied what kind of proposals could be made to the financial authorities in those countries to remove the obstacles that Japanese corporations were facing.
2. How to Vitalize Tokyo Financial Market
   IIMA reviewed the infrastructural development of Tokyo financial market and examined the remaining difficulties both on procurement and operation of the capital in Tokyo market, especially from a viewpoint of the convenience of non-residential users.
3. Practical Steps toward Promoting the Japanese Yen Denominated Trade Finance in Vietnam
   IIMA organized a working group with the State Bank of Vietnam (SBV), Vietnamese central bank, and designed a scheme under which three Japanese banks in Vietnam would provide the Vietnamese banks with yen funds which the latter could use as trade finance resource by lending the yen to Vietnamese corporations. IIMA provided necessary supports to materialize a pilot project, which approached just around the corner ahead of realization.

“Analysis of the U.S. External Investment and Its Implications for Developing Countries and Japan”
Despite its large and still increasing net international debt position, the US income account has maintained a surplus balance as the receipts of investment income from outward direct investment of the US constantly outweighed the payments related to international debt. It is a big question whether this favorable gap would be sustained in the future. Having this awareness in mind, IIMA explored the background of these facts. The macro-data-based analysis was supplemented with the information that was acquired from interviews to several leading US corporations regarding their current external investment situation. Moreover, we had a simulation analysis of the income account level with which the US current account balance would be sustained. We also studied the association of US outward investment and its effect on economic expansion in developing countries.

4. Future Model of the Settlement System in East Asia

Building on the research made in the latter 2004 to early 2005 (that was commissioned by the Asian Development Bank), IIMA further examined the problems of cash and security settlement system in East Asia and explored the future picture of the system. In international workshops, we made a public presentation on this matter and exchanged opinions with the specialists.

5. Researches on the Banking Sector in Asian Countries

“Research on SME Finances in Bangladesh”
Focusing on the problems hindering the economic growth of Bangladesh, IIMA conducted a research on the actual condition of the SME finances in the country. We analyzed the measures of the Bangladesh Bank (central bank) to support the SMEs as well as approaches to the SME finance by the local financial institutions. We also proposed recommendations on the direction of Japan’s economic assistance that has been mainly conducted by JBIC.

“Research on the Banking Sector in Indonesia”
Regarding the banking sector in Indonesia, IIMA analyzed the aftereffects of the Asian financial crisis and effect of subsequent financial reforms adopted after the crisis. We presented a comprehensive assessment of the banking sector, taking into account the relationships between the banking sectors and corporations as well as managerial problems of the banks.

“Research on the Banking Sector in the Philippines”
IIMA analyzed the functions and roles of regulatory authority over the banking sector in the Philippines as well as the situation of non-performing loan disposals by the banks. We discussed the future issues and possible measures of the banking sector of the country.

6. Study of EX-IM banks in Asia and the Pacific Region

IIMA reviewed the situation of the EX-IM or similar banks in major countries in Asia and the Pacific (eight countries of Australia, China, India, Indonesia, Korea, Malaysia, the Philippines, and Thailand), and summarized their features. We also studied the recent development relating to the Viet Num Development Bank which establishment was currently under consideration.

7. Public-Private Cooperation for the Infrastructure Upgrading in India

India needs much improved infrastructure and is increasingly using the Public-Private Partnership scheme (PPP) to leverage the private money. With the example of water-supply project case in Tamilnado District, IIMA analyzed the fact and problems of public-private cooperation and suggested the usage of Yen loan and concrete ways of its utilization.