In Cambodia, Bakong, the world’s first digital currency issued by a central bank, has been welcomed by the people and widely established. The author, who helped design and implement it, discusses the factors behind its success in the country, as well as its further development and future opportunities in the Asia-Pacific region.   Miyazawa Kazumasa, President, Soramitsu Co., Ltd. 1 Introduction This article introduces the development of central bank digital currencies (CBDCs) in the Asia-Pacific region and the efficiency of cross-border remittances, taking into account the latest developments in Cambodia. In Cambodia, the digital currency “Bakong” issued by the National Bank of Cambodia (NBC) officially launched in October 2020. Japanese fintech startup Soramitsu Co., Ltd. also participated in the development and design of Bakong. I currently serve as the president and representative director of Soramitsu, and since 2017 I have also served as ... ... [Read more]

  Ito Sayuri, Executive Director, Economic Research Department, NLI Research Institute   Since the end of the Cold War, supply chains have expanded globally, and there are concerns about fragmentation due to multiple factors, including the escalating conflict between the United States and China, the COVID-19 pandemic, Russia’s invasion of Ukraine, and the climate crisis. At the G7 Hiroshima Summit in 2023, de-coupling was rejected as an approach to economic resilience and economic security, and a policy based on de-risking was affirmed. Friendshoring, the formation of supply chains among allied or like-minded countries; nearshoring, the relocation of business to neighboring countries; and reshoring and onshoring, the return of business to a country, became buzzwords to indicate the direction of restructuring supply chains. Changes are already visible in global trade data. In 2023, the amount of trade between the United States, the European Union and ... ... [Read more]

  Tsuru Kotaro, Program Director and Faculty Fellow, Research Institute of Economy, Trade and Industry (RIETI)   Wage increases are attracting intense attention as a touchstone for the future course of the Japanese economy. The Japanese government and the Bank of Japan are closely watching how the forthcoming shunto spring wage negotiations will play out. There are signs of a shift in the long-entrenched norm that prices and wages simply do not rise, which has permeated the nation throughout the long period of deflation, and now is the time to aim for an increasing, virtuous circle between prices and wages. This article will examine whether such a virtuous circle can become sustainable. First, when assessing the shunto wage increase, it is important to understand that it usually consists of two portions—the regular annual pay increase that company employees receive, and the increase in the base pay. It is ... ... [Read more]

    Makino Momoe’s newly released book, Jenda Kakusa: Jissho keizaigaku wa nani wo kataruka (Gender Gap: What does empirical economics tell us?) (Chukoshinsho), gives an easy-to-understand explanation of research by Claudia Goldin, laureate of the Nobel Memorial Prize in Economic Sciences. This noteworthy author touches on Goldin’s achievements as she explores the reality of Japan’s “gender gap.” Interview by Voice editorial team   Makino Momoe, Senior Research Fellow, Development Studies Center, Institute of Developing Economies, Japan External Trade Organization   Goldin’s Achievements ――Makino-san’s new book, Jenda Kakusa (Gender Gap), has attracted attention for explaining the Nobel Memorial Prize in Economic Sciences winner Claudia Goldin’s research for the general reader. Makino-san, what was your take on Goldin receiving the award? Makino Momoe: To be honest, I was surprised when I first saw on the news that Goldin alone was awarded the prize. My field of expertise, ... ... [Read more]

  Unlike the American decoupling approach, de-risking is attracting more attention as an approach to China spearheaded by Europe. This is characterised by tightening regulations in specific fields for economic security. This article explains what measures the EU is taking and what are Brussels’ aims.   Hayashi Daisuke, Associate Professor, Musashino Gakuin University   At the G7 Hiroshima Summit in May 2023, the G7 announced its commitment to a de-risking approach towards China. The concept of de-risking was originally proposed by the President of the European Commission Ursula von der Leyen, and was later incorporated into the G7 Hiroshima Leaders’ Communiqué with other member states, such as the United States and Japan. However, what is the concept of de-risking, and how does it differ from decoupling? I provide an overview of the origins of the concept of de-risking, specific policy developments, and cooperation with ... ... [Read more]

  Key points Mild deflation process keeps down household consumption When people’s long-term expectations are overturned, there is a risk of rapid inflation The Bank of Japan recognizes the risk that a policy shift may cause disorder   Saito Makoto, Professor, Nagoya University   Japan’s fiscal and monetary policies are facing drastic changes in a global economic environment marked by advancing inflation and rising long- and short-term interest rates. There is also the firmly rooted view in the financial community and elsewhere that the long-term interest rate should be raised to reduce the gap between domestic and foreign interest rates as well as counter the yen’s depreciation. There is also a lot of talk about removing the upper limit on long-term interest rates. Moreover, there have been prominent proposals for the restoration of fiscal discipline in anticipation of a rise in long-term interest rates. ... ... [Read more]

  This paper examines energy security from an economics perspective, using the gasoline subsidy issue and the delay in introducing carbon pricing as examples.   Fujii Hideaki, Professor, Faculty of Economics, Kyoto Sangyo University What is energy security? Japan’s high economic growth, which began in the late 1950s, came to an end with the first oil crisis in 1973, and 2023 marks 50 years since then. Subsequently, as the external environment of the energy market changed, the Japanese economy succeeded in reducing energy consumption intensity (energy consumption required to produce a unit of gross domestic product) over the long term. This has been because of the rapid yen appreciation due to the Plaza Accord (1985), deregulation and market opening, Japan-US trade friction, the bubble economy and its collapse, the end of the Cold War structure, the deflationary economy, globalization, crude oil price volatility, the ... ... [Read more]

  The unipolar era in which Japan unilaterally “chose” its Asian partners is over, and we are entering a multipolar era in Asia. How should Japan deal with this evolving dynamism in order to be “chosen” as a trusted partner? This paper will discuss viable strategies in the “age of values,” with a focus on “business and human rights (BHR).”   Goto Kenta, Professor, Faculty of Economics, Kansai University The era of connectivity The 21st century is the era of connectivity. Increased mobility of goods, people, capital, and information has deepened connections across borders. Most goods and services are now produced in global value chains (GVCs), connecting various types of companies in countries at different income levels. GVCs have developed most extensively in Asia, where these complex intra and inter-firm organizational forms have elevated it to the “factory of the world.” In recent years, ... ... [Read more]

  Key points Not only low-income earners, but also the middle class has serious worries about the future Mechanisms for “not creating vulnerable people” anywhere in the whole population It is necessary to balance benefits and burdens, e.g., by raising the consumption tax rate   Ide Eisaku, professor, Keio University   Times of crisis destabilize the lives of not just the majority but also the few. Also the COVID-19 crisis brought to the fore how low-income earners were suffering from “anxiety about tomorrow” while the middle class were suffering from “anxiety about the future.” Post-COVID safety nets need to rationally resolve these two anxieties both economically and politically. The term “safety net” generally conjures up an image of relief for people struggling to make ends meet. Yet the number of people struggling with this is growing, with the middle class now starting to feel ... ... [Read more]

  Kimura Fukunari, Consulting Fellow, Research Institute of Economy, Trade and Industry (RIETI), Professor, Keio University   While efforts to pursue free trade have stalled amid the growing geopolitical tensions, the time has come to restart the free trade agreement (FTA) strategy. The entry into force of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in all of the 11 original signatory countries and the United Kingdom’s signing of a protocol to accede to the CPTPP in July 2023 may become triggers for doing so. The U.S.-China confrontation has shifted from a tariff war to a struggle for high-technology supremacy and appears to be intensifying further. As seen in a speech given by U.S. National Security Adviser Jake Sullivan in April, meanwhile, the principle of protecting foundational technologies “with a small yard and a high fence” to strike a balance between advanced technology ... ... [Read more]