Recent JEF Activity • 1

Searching for Better Globalization
Over the Long Term – a Reporton the Three JEF Fora in 2018
Author Naoyuki Haraoka

By Naoyuki Haraoka
Introduction
The Japan Economic Foundation (JEF) organized three policy fora
in 2018 focused on the common theme of how to achieve “Better
Globalization” against the backdrop of a perceived increase innationalism and protectionism. It is also being questioned whether
the Fourth Industrial Revolution, with its so-called “digital
economy”, can save the world from a possible economic crisis
resulting from protectionism or whether it will instead intensify thecrisis with a significant loss of jobs as a result of IT and AI replacing
human jobs in great numbers. Meanwhile, political developments
need to be closely watched as important events such as national
elections could change the overall picture of national politics.
Politics can influence economic trends worldwide. The outcome of
US mid-term elections (President Donald Trump, advocating an“America First” policy, maintains strong support) and some German
elections (Chancellor Angela Merkel, a supporter of globalization,
lost heavily in recent polls in Bavaria and Hesse) tell us we are stillin a situation in which we would need to address carefully thenegative aspects of globalization and think about how to mitigate
them and maximize its benefits.
Whatever the merits or otherwise of globalization, it is true that
our industrial activities have been largely built on division of laborby global supply chains created by trade and investment, and thus
most of our businesses are now enjoying its merits. Its demerits
could emerge in the sectors losing out to international competition
under globalization and suffering from loss of jobs. “Better
Globalization” should mean spreading the merits of globalization
equally over the whole nation, not only to the sectors or people
benefitting from it but also to those currently suffering from it. If wehelp those suffering from the effects of globalization and get themout of difficulties by relevant public policies, we could achieve better
welfare in a nation and eventually worldwide. Promoting equality insharing the merits of globalization could also help allay possible
increased income disparities to be caused by the technologicalinnovation currently under progress.
To get global governance to work well, I believe at least all the
major nations should share the fundamental concept and goal of“Better Globalization”. With this belief, JEF worked in 2018 tohttps://www.jef.or.jp/journal/organize the three policy fora summarized below. I hope these
efforts will contribute to narrowing the gaps in basic views about
globalization among the major nations, such as were seen in the
failure of APEC leaders meeting in 2018 to complete a joint
communique due to serious differences in their views.

JEF-Chatham House Symposium 2018
The roundtable dialogue among leading thinkers of Japan and theUnited Kingdom was organized on April 20, 2018 in London incollaboration between JEF and Chatham House, a UK think tank.
In the first session discussing globalization, populism, economic
nationalism and free trade, all noted that populism could work as a
trigger to improve the national economic systems in responding
well to the needs of the people left behind by the spread ofglobalization.
It will eventually be necessary for governments to deal withpeople’s complaints about globalization, and so populism could be
useful in compelling the elites to adjust their thinking and policies toaddress these needs. Therefore, the current rise in populism could
be considered a corrective mechanism for globalist policies thathave turned out to be wrong. In this light, I think the current wave of
populism was largely perceived at this forum as a natural outcomeof democracy. This wave has emerged in the form of economic
nationalism and concerns among working people about possible job
losses due to uncontrolled immigration. On the other hand, with thecontinuing low economic growth in developed economies, it will be
increasingly difficult for nations to understand clearly the benefits offree trade and investment. Governments will need to assure theirpeople with public policies that the benefits of free trade andinvestment in accordance with globalization will expand to
working-class people and the low-income class through welfare
reallocation. Free Trade Agreements (FTAs) today sometimes facehostility from people who consider them to be an impediment to anindividual country’s economic success. This perception could be
attributed to the political elites’ failure to ensure that the merits offree trade extend to the working class. International harmonizationof regulations could be one solution, as common rules could
promote a sense of fairness in trade among nations. Restricting

Japan SPOTLIGHT • March / April 201959

Recent JEF Activity • 1

AgendaThe JEF-Chatham House Symposium 2018
Open Economies & the Challenge of Innovation: Policy
Options in an Era of Rising Populism & Economic
Nationalism
Venue: Henry Price Room, Chatham House, London
Date: Friday, April 20, 2018

JEF-Chatham House Symposium 2018 on April 20, 2018 in London

dual taxation between nations and trying to implement cooperation
among tax authorities to specify common rules for taxation wasanother possible solution proposed in the roundtable.
In the second session, discussions were concentrated on theissue of an aging society, which Japan in particular faces.
Immigration was considered a key solution in dealing with the
population decline in Japan to restore economic vitality. Most of theparticipants agreed that having more immigrants in Japan would
enhance its economic growth in a short period without threatening
the Japanese social welfare or medical system. However, this was
based on the assumption that those people would not settle inJapan but return to their mother countries after retirement. There islittle guarantee that this would be the case.
In the third session about innovation and productivity, the key
discussion was whether the new technologies of the Fourth
Industrial Revolution, such as the Internet of Things (IoT), artificial
intelligence (AI), and 3D printing, would increase human welfare ornot. In particular, the main concern was about a possible increase in
unemployment caused by replacement of human jobs. Anotherconcern was about a possible decline of social cohesion due to thisthreat to the labor force and a possible increasing income gap
between the rich and the poor. An interesting suggestion by theroundtable was to encourage social entrepreneurship to be a newmechanism for social cohesion. Entrepreneurship is important inpromoting innovation as well. Thus, it was stressed that educationneeds to be improved to enhance entrepreneurship.
A Japanese social innovation policy plan called “Society 5.0” wasalso discussed. While British people’s views on a society governedby new technologies was a bit pessimistic, such as the idea of
productivity becoming rather meaningless if human beings’
contribution to the industrial society was limited and their working
incentive was harmed, the Japanese were found to be very
optimistic about a future human society where new technologies

60 Japan SPOTLIGHT • March / April 2019

Session 1: Globalization, Rising Populism & Economic Nationalism &Free Trade
Speakers:• Sota Kato, Executive Director and Senior Fellow, the Tokyo Foundation
for Policy Research• Matthew Goodwin, Associate Fellow, Europe Programme, Chatham
House• The Rt Hon The Lord Andrew Lansley, Leader, House of Commons andLord Privy Seal (2012-14)
Chair: Edwina Moreton OBE, Associate Fellow, International Security
Department, Chatham House
Session 2: Immigration, Aging Society & the Political Economy ofSocial Welfare & Healthcare
Speakers:• Takashi Unayama, Associate Professor, Hitotsubashi University• Kristin Surak, Senior Lecturer in Japanese Politics, School of Oriental
and African Studies• Peter Matanle, Senior Lecturer in Japanese Studies, School of East
Asian Studies, University of Sheffield
Chair: Sebastian Lechevalier, Director of Studies, L’École des Hautes
Études en Sciences Sociales (EHESS)
Session 3: Productivity, Educational and Technological Innovation & the
Growth of Smart Cities
Speakers:• Toshiyuki Shiga, Chairman and CEO, Innovation Network Corporationof Japan; Member, Board of Directors, Nissan Motor Co. Ltd.
• Hugh Whittaker, Professor in the Economy and Business of Japan and
Director, Nissan Institute of Japanese Studies, University of Oxford• Patricia Nelson, Visiting Fellow, Japan Chair, Center for Strategic andInternational Studies
Chair: Naoyuki Haraoka, Executive Managing Director, JEF

would contribute to the enhancement of human happiness.
However, this optimism about a productive collaboration between
technologies and human beings without threating human jobs must
be based upon the reality of a declining population in Japan andlabor force shortage, in contrast to the UK or European situation.

Recent JEF Activity • 1

US-Japan Forum 2018
The Brookings Institution’s Global Economy and Development
Program has been a good partner of JEF in recent years. They havebeen working in particular on policies and trends influencing
developing countries, including aid to poor countries as well as theG20 process. Our roundtable 2018 was organized in Washington DC
in collaboration with them on May 25, 2018.
Dr. Kemal Daviş, senior fellow in the Global Economy andDevelopment Program and our luncheon speaker at the forum,
concluded in his book A Better Globalization (2005) that underglobalization politics and economics should be examined together,as globalization was starting to show its dark side such as increased
income gaps or the decreased labor force in local industries thathave been forced to close their factories due to the increased
presence of multinational corporations (MNCs). He mentioned thatthough globalization had been considered to work only positively forthe economy, such as by raising productivity, productivity andeconomic growth were becoming less connected to social stability
through political conflicts between the groups benefitting fromglobalization and those suffering from it. “Better Globalization”
became the theme of the forum.
In the first session, while acknowledging the merits ofglobalization for productivity and growth, all noted the need tocontain its risks, such as income gap expansion. Inclusive growth
was mentioned as a key concept to achieve rapid economic growthand income equality simultaneously, and human resources
development policies to raise the skills of the non-skilled labor force
were considered important.
It was noted that globalization was not solely responsible forincome gap expansions but new technologies were as well.
Developing nations are now facing big challenges, such asincreasing income gaps, lack of job creation and rising youth
unemployment, brought about by globalization and insufficient
access to new technologies. In overcoming these challenges, wewill need to promote worldwide financial cooperation fordevelopment initiated by multilateral development banks. In
promoting this, these global financial institutions as well as national
governments involved in aid will need to consider developing
countries’ sustainability of debt.
In the second session, discussions focused on analysis of newtechnologies’ impact upon the workforces. Not only physicalinnovations such as robots, AI and IoT, but also business modeltransformations such as heavy involvement of non-permanent
employees or the introduction of lean management and flatorganizational architecture were examined. The concept of “Society
5.0”, a Japanese future society model where new technologies such

AgendaThe US-Japan Forum 2018
Challenges for the Global Economy & a Better Globalization
Venue: Stein Room, The Brookings Institution, Washington, DC
Date: Friday, May 25, 2018
Session 1: A Better Globalization
Moderator: Homi Kharas, Interim Vice President & Director, Global
Economy and Development, Brookings Institution
Lead speakers:• Yoichi Otabe, Advisor, NEC Corporation, former Vice Minister for
Economic Affairs in Japanese Ministry of Foreign Affairs• Jonathan Ostry, Deputy Director of the Research Department,International Monetary Fund
• Martin Baily, Bernard L. Schwartz Chair in Economic Policy
Development, Brookings Institution• Marilou Uy, Director, Intergovernmental Group of Twenty-Four on
International Monetary Affairs and Development (G-24)
Session 2: Future of Work
Moderator: Naoyuki Haraoka, Executive Managing Director, Japan
Economic Foundation
Lead speakers:• Mayumi Fukuyama, General Manager, CIO, Technology Management
Center, Technology Strategy Office, Hitachi Ltd. Research &Development Group• Shahid Yusuf, Chief Economist of the Growth Dialogue, George
Washington University School of Business• Darrell West, Vice President and Director, Governance Studies,
Brookings Institution• Indhira Santos, Senior Economist, Social Protection and Labor Global
Practice, the World Bank
Session 3: Energy & Climate
Moderator: Kazumasa Kusaka, Chairman and CEO, Japan Economic
Foundation
Lead speakers:• Nathan Hultman, Director of the Center for Global Sustainability and
Associate Professor, University of Maryland School of Public Policy• Yoriko Kawaguchi, Fellow, Musashino Institute for Global Affairs,
Musashino University, former Minister of Foreign Affairs of Japan• Amar Bhattacharya, Senior Fellow, Global Economy and Development,
Brookings Institution

as digital technology and human activities are coordinated tomaximize human happiness (with possible job losses caused by
new technologies compensated for by the creation of new
industries), was also welcomed at this forum, as at the forum in
London. However, as in the former case, most of the participants
did not share the Japanese optimism about a digital economy andJapan SPOTLIGHT • March / April 201961

Recent JEF Activity • 1

US-Japan Forum 2018 on May 25, 2018 in Washington, DC

believed that most developing nations will not be able to afford to
fully utilize the opportunities created by new technologies and will
urgently need to develop new ways of raising labor skills.
The third session was devoted to discussion on another longterm issue crucial to achieve sustainable growth – energy and global
climate change. Transition to a low-carbon energy system to meetthe global target of reduction in CO2 emissions was considered a
key to achieving consistency between inclusive growth andenvironmental sustainability, since poverty can often harm theenvironment much more than economic development, as in thecase of deforestation caused by extremely poor people in Southeast
Asia. The announcement by the United States in 2017 that it would
withdraw from the Paris Agreement on climate change and its
reluctance to implement policy measures to reduce CO2 emissions
were considered by all participants to pose the biggest challenge toglobal climate change, and all expected to see a greater role playedby the G20 in encouraging nations to adopt more environmentallyfriendly energy policies.

Asia-Pacific Forum 2018
JEF’s annual public symposium consisting of leading thinkers
from Asia-Pacific nations, former trade officials or diplomats,academics and business executives, was held on Nov. 22, 2018 in
New Delhi in collaboration with Research and Information System
for Developing Countries (RIS), an Indian think tank.
Rising trade protectionism and the trade war between the US andChina, or what we may call a “techno cold war” between the twocountries, were regarded as threats to the global trading system
around the time of this symposium. Intensified rivalry for global
hegemony between the two may lie behind this trade war. This is amenace to global governance and how to restore it is an urgent
question that needs to be addressed for the stability of the global

62 Japan SPOTLIGHT • March / April 2019

economy.
Against this background, discussions focused on how to preserve
free trade, which was agreed by all participants as essential tomaintaining global value chains which have expanded in the AsiaPacific economies. So the US-China trade war could pose a serious
threat to Asia-Pacific economies.
The first session highlighted the role of technology in trade.
Export-led economic growth in the manufacturing sector is still adominant economic development model in Asia. A Japanese
economist, Dr. Kaname Akamatsu, in his well-known economic
theory, described the Asian nations’ economic growth as a group of
flying geese led by Japan. They have been following a Japanese
export-led growth pattern from the 1960s. Today, irrespective of
which country in East Asia is leading the flying geese, the tradeperformance of high-technology products, major export items forthem, is crucial to their economic achievements. This export-led
growth pattern in the manufacturing sector is continuing to advancethrough global value chains spreading over the Asia-Pacific area asa result of Foreign Direct Investment.
For example, a smartphone is not wholly produced in any single
country, as its parts and components are made in various countries
and assembled somewhere else. These high-tech companies aremostly MNCs allocating various production processes anddistribution or sales and after-service functions all over the world, inparticular in East Asia. So a country’s economic performance isheavily dependent upon such global value chains. The US-China
trade war could be a serious impediment to this, since China iscertainly a main site for such production and sales bases. “Better
Globalization” for this region needs to be discussed in terms ofthese global value chains.
Discussions concentrated on the crucial question of how to
restore confidence in the multilateral rule-making system ininternational trade. While regional FTAs in the Asia-Pacific region
like the Comprehensive and Progressive Agreement for TransPacific Partnership (CPTPP) or Regional Comprehensive Economic
Partnership (RCEP) must be complimentary to multilateral trade
rules, the WTO will need to be reformed in accordance with current
trends in global trade. It was argued that we will need to make the
WTO more inclusive to take account of developing nations’ interests
by expanding special and differential treatment for them.
Meanwhile, capacity building efforts are needed by developing
nations, such as enhancing the capacity for trade and investment bysmall and medium-sized enterprises. Like-mindedness will be themost important factor in promoting a multilateral rule-making
system and this region’s common interest in maintaining global
value chains could help in this regard. Entering a digital economy
through the Fourth Industrial Revolution will create the need for newRecent JEF Activity • 1

AgendaThe Asia-Pacific Forum 2018
Public Symposium on Protecting the Global Trading System& the Role of Multilateralism
Venue: Silver Oak Hall, Indian Habitat Center, New Delhi
Date: Thursday, Nov. 22, 2018
Panel Session 1: Trade & New Technology
Chair & Moderator: Amb. Amar Sinha, Distinguished Fellow, RIS
Panelists:• Dr. Man-Jung Mignonne Chan, Chair and CEO, Out-of-the Box
Consultancy• Datuk Seri Jayasiri Jayasena, former Secretary General, Ministry ofInternational Trade and Industry (MITI), Malaysia• Amb. Murray McLean AO, Chairman, Dunmore McLean Pty Ltd.
• Prof. Simon Tay, Chairman, Singapore Institute of International Affairs(SIIA)• Mr. Nuttawut Laksanapanyakul, Consultant, Thailand Development
Research Institute (TDRI)
Panel Session 2: Imperatives for Regional Integration: Growing Role ofService Sector
Chair & Moderator: Naoyuki Haraoka, Executive Managing Director, JEF
Panelists:• Prof. Choong Yong Ahn, Professor Emeritus, College of Business andEconomics, Chung-Ang University (CAU)• Prof. Prabir De, Professor, RIS• Prof. Gary Hawke, Emeritus Professor, Victoria University of
Wellington (VUW)• Ms. Anita Prakash, Director General for Policy Relations, Economic
Research Institute for ASEAN and East Asia (ERIA)• Prof. Shujiro Urata, Dean and Professor, Graduate School of AsiaPacific Studies (GSAPS), Waseda University• Prof. Zhang Jianping, Director General, Center for Regional Economic
Cooperation, Chinese Academy of International Trade and Economic
Cooperation (AITEC), MOFCOM
Panel Session 3: Importance & Roles of SDGs in the Indo-PacificRegion: Strategies for Attainment of SDGs
Chair & Moderator: Prof. Sachin Chaturvedi, Director General, RIS
Panelists:• Dr. Yose Rizal Damuri, Head of Department of Economics, Center for
Strategic and International Studies (CSIS)• Dr. Tri Thanh Vo, Economist, Central Institute for Economic
Management (CIEM)• Dr. Josef Yap, Professorial Lecturer, University of the Philippines
School of Economics (UPSE)• Prof. Saikat Sinha Roy, Jadhavpur University*This event is supported by JKA Foundation through its promotion funds fromkeirin racing.

rules on e-commerce. In an economy driven by new technologies,
domestic policies on such issues as Intellectual Property Rights andcompetition will increasingly affect trade and investment, and so we

Public symposium of the Asia-Pacific Forum 2018 on Nov. 22, 2018 in Delhi

will need international rules on such policies.
The second session highlighted the growing role of the service
sector, which is increasing in importance due to the rise of a digital
economy in which IT software services play a pivotal role inconnecting factories and distributors as well as consumers. The
service sector was originally important for Asia-Pacific economies inlight of its contribution to employment and building up the middle
class, as well as consumption-led economic growth. It was thus
considered a key sector in avoiding a “middle income trap” caused by
the lack of a large middle class of consumers. So the need to restore
a multilateral trade rule-making system for the service sector is thesame as for the high-tech led manufacturing sector in terms ofenhancing connectivity among the different production processes.
In the third session, assuming that income and asset disparity inthis region would hamper its growth potential by squeezing
consumption by the middle class, how to achieve inclusive growth
was discussed as the key issue of the UN’s Sustainable
Development Goals (SDGs). Inclusive growth is a common agenda
item in talking about “Better Globalization” in all regions of theworld, but in particular in this region it is a key concept as it would
be the basis of economic development. Education and capacity
building for human resources need to be highlighted to reduceincome and asset inequality.
Finally, in light of the crisis in global governance due to the
US-China struggle for global hegemony, it was highly appreciatedthat members of the forum all agreed on the need to contribute torestoring confidence in international regimes. The G20 process was
highlighted as the most important venue for them to maximize theircontribution to global governance. This is encouraging for Japan inparticular, as it will host the G20 Summit in 2019.
Naoyuki Haraoka is editor-in-chief of Japan SPOTLIGHT & executive
managing director of the Japan Economic Foundation (JEF).

Japan SPOTLIGHT • March / April 201963