ACD oil wealth to be reinvested in the region
See "Oil cash for bonds approved" (business, page 3)By Jon Fernquest
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Much of the reinvestment would be in the form of bonds so the reinvestment, "may take a while, because only a few members are capable of issuing bonds recognised in international markets."
Still, regional economic cooperation like this may be more feasible than immediately launching into worldwide economic cooperation like the WTO. Here are some questions to guide your reading (See answer key at end):
1. What issues did the ACD forum avoid?
2. Which issues were "common concerns" of ACD members?
3. Which country initiated the ACD?
4. When was the ACD started?
5. How many members does the ACD have? How many did it initially have?
6. Is the ACD planning to add more members soon? Why?
7. Why was the reinvestment idea suggested?
8. What two forms will reinvestment take?
9. What sectors may Foreign Direct Investment (FDI) take place in?
10. What aspects of energy policy is the ACD focusing on?
Thinking more about the issues
It is worth asking why regionalism might be more feasible than globalism or globalisation. Could the larger superpower countries sometimes have their own agendas that are not so relevant to smaller countries? And moreover have a tendency to bully smaller countries into following their lead?
During the nineteenth century, free trade spread throughout Europe like a (good) virus spreading through most-favoured nation clauses in bilateral Free Trade Agreements (FTA) that gave other countries the same free trade rights.
There’s a lot of interesting further reading you can do on the subject of regionalism, but not much of it is on line. Read a proposal for regional economic cooperation in the wake of the Tsunami disaster. Read about how two countries that used to fight each other in wars (like Thailand and Burma) solved the problem through economic cooperation in this article . (Source).
Vocabulary (in discussion above)
regional economic cooperation – economic cooperation and free trade between countries in a region versus cooperation between all the countries in the world like the WTO, part of regionalism in international politicsfeasible - possible to do and complete
interdependence – a group of people depend and rely on each other
bargaining power – the power to get what you want when negotiating an agreement (large countries like the U.S. or groups of countries like the European Union often have great bargaining power)
enhance – improve the value or quality of something
value chain – “An organization's set of linked, value-creating activities, ranging from securing basic raw materials and energy to the ultimate delivery of products and services” (Source, See Wikipedia:Value_chain)
Vocabulary (in article)
a non-binding organisation – only informal agreements are made, creates no legal obligationsAsia Co-operation Dialogue (ACD) - an informal forum for Asian Foreign Ministers to exchange views on issues, promote interdependence and cooperation among Asian countries, expand the market within Asia, increase the bargaining power of Asian countries, and enhance Asia's economic competitiveness by climbing up the development value chain, the organisation was initiated by Thailand under Prime Minister Thaksin (Source: Asia Cooperation Dialogue FAQ, also see Wikipedia)
to float an idea – suggest an idea for others to think about
a climate of surging oil prices – situation, circumstances, environment, the way things generally are
windfalls – money received unexpectedly or by luck, windfall profits
so-called… – generally called or referred to as… (indicates that you may not agree completely)
comprises – has as parts or members, consists of, is composed of
moratorium – an agreement to stop doing something for a period of time
perceptions – opinions, the way people view it
foreign direct investment (FDI) - “movement of capital across national frontiers in a manner that grants the investor control over the acquired asset,” usually occurs when a multinational hold stock in a country’s company (See Wikipedia’s articles on Foreign Direct Investment and multinational national corporations)
a platform for co-operation – a structure, framework, or system for cooperation (platform usually refers to an underlying computer system that software runs on)
map out an action plan – create a plan to do something
infrastructure – the basic facilities such as transport, communications, power, water, and buildings which allow business and day-to-day life in a country to move smoothly (See Wikipedia on infrastructure)
Answer Key:
1. What issues did the ACD forum avoid?
The Iran nuclear controversy: “Although Iran is a member of the ACD, the forum that ended yesterday did not discuss nuclear controversy surrounding the country. Instead the voluntary membership body focused on positive issues.”
2. Which issues were "common concerns" of ACD members?
“Energy and finance issues.”
3. Which country initiated the ACD?
Thailand initiated the ACD (See ACD FAQ)
4. When was the ACD started?
In the year 2002.
5. How many members does the ACD have? How many did it initially have?
The ACD has 30 members now. It initially had 18 members.
6. Is the ACD planning to add more members soon? Why?
No, “the ACD is considering a membership moratorium over perceptions it is growing too fast.”
7. Why was the reinvestment idea suggested?
Rising oil prices have caused extra economic problems for oil-consuming members, while providing economic benefits for oil-producing members. Oil-producing members can help oil-consuming nations by recycling this money within the region. An answer has to be inferred from the text:
“Thailand…floated the reinvestment idea amid a climate of surging oil prices, which have brought windfalls to oil-producing members.”
8. What two forms will reinvestment take?
Bonds and Foreign Direct Investment (FDI): “…oil-exporting countries were asked to reinvest in financial markets in the region, through the so-called Asian bond market and through foreign direct investment.”
9. What sectors may Foreign Direct Investment (FDI) take place in?
Probably in sectors that oil-consumers have a comparative advantage in: “in areas of interest for oil-producing countries, ranging from real-estate to agriculture.”
10. What aspects of energy policy is the ACD focusing on?
The ACD will, “be prioritizing energy security, research and infrastructure development.”
