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15861. A Search for Independence in President Duterte’s Foreign Policy

Author:
Denise Layla P. Miram
Publication Date:
12-2020
Content Type:
Special Report
Institution:
East-West Center
Abstract:
The Duterte administraƟon’s move toward favoring non‐tradiƟonal partners above other equally valuable— and perhaps more beneficial—trade and development partners, such as the United States and the European Union, has significantly changed the direcƟon of the country’s foreign policy and impacted its naƟonal security. While the government maintains that it is pursuing an “independent foreign policy”, many experts have criƟcized the administraƟon’s supposed strategy for its lack of clarity and posiƟon. In the absence of clear guidelines and a well‐defined vision, the administraƟon has merely pivoted away from one superpower, its treaty ally in the US, to global superpowers China and Russia.
Topic:
Foreign Policy, Foreign Direct Investment, European Union, Trade, and Rodrigo Duterte
Political Geography:
Russia, China, Philippines, Asia-Pacific, and United States of America

15862. Philippine Diplomacy and Foreign Policy: “Quo Vadis?”

Author:
Reiñer Subijano
Publication Date:
12-2020
Content Type:
Special Report
Institution:
East-West Center
Abstract:
In the last week of July, 2020, an “online war” arose between Philippine Secretary of Foreign Affairs Teodoro Locsin, Jr. and Malaysian Foreign Affairs Minister Hishammuddin Hussein over a simple tweet from the U.S. Embassy in Manila, regarding a donation from the U.S. Agency for International Development (USAID) to returning Filipino repatriates “from Sabah, Malaysia.” The tweet sparked an enraged response from Secretary Locsin, who replied that “Sabah is not in Malaysia if you want to have anything to do with the Philippines.” Two days later, Minister Hussein tweeted that “Sabah is, and will always be, part of Malaysia”, qualifying Secretary Locsin’s tweet as an “irresponsible statement that affects bilateral ties.” While the two parties have summoned each other’s representatives for an explanation on the matter, the case of Sabah raises fundamental questions about the direction of the country’s foreign policies.
Topic:
Foreign Policy, Diplomacy, and Bilateral Relations
Political Geography:
Philippines, Asia-Pacific, and United States of America

15863. Regional Development Performance in Council Areas of Scotland with the Highest Percentage of Gaelic Speakers

Author:
Craig Willis
Publication Date:
01-2020
Content Type:
Research Paper
Institution:
European Centre for Minority Issues (ECMI)
Abstract:
Research on Gaelic language in Scotland has increased substantially in recent decades, as has Scottish regional development programmes following devolution. However, the overlapping of these two aspects remains limited, particularly in the context of regional development data available on regions where Scottish Gaelic speakers mostly reside. This Research Paper uses the OECD Regional Wellbeing index as a framework to measure regional development in Scotland at the level of council area, comparing this with its percentage of Gaelic speakers. Equivalent data for eight of the eleven OECD topics is analysed and the focus is placed on the three council areas with significant Gaelic speaking populations – Argyll and Bute, Na h-Eileanan Siar and Highland. The results show that these three regions consistently perform average or good across the eight topics measured, in comparison to the national average in Scotland. This demonstrates that Gaelic language is not a hindrance to development and the three regions perform comparably to other remote council areas such as the Orkney and Shetland Islands.
Topic:
Development, Minorities, Language, Regionalism, and Identity
Political Geography:
Britain, United Kingdom, Europe, and Scotland

15864. Economic Effects of the COVID-19 Pandemic on Roma Communities in Albania, Bosnia & Herzegovina, Moldova, Montenegro, North Macedonia, Serbia and Ukraine

Author:
Craig Willis
Publication Date:
10-2020
Content Type:
Research Paper
Institution:
European Centre for Minority Issues (ECMI)
Abstract:
This Research Paper focuses on economic effects experienced by Roma communities in seven non-EU states during the COVID-19 pandemic and states’ consequent lockdown measures in the first half of 2020. Roma communities in Albania, Bosnia & Herzegovina, Moldova, Montenegro, North Macedonia, Serbia and Ukraine, were all facing socio-economic exclusion and marginalisation before the pandemic and international organisations were warning very early on that Roma communities were at serious risk during the pandemic, including in the fields of employment or loss of income. This research paper uses primary data collected from a survey of 440 Roma individuals across the seven states in order to add empirical evidence to an under-researched area. The main findings include that almost 73% of them experienced a reduced income and the major reason for this was due to access to or demand for informal work was hindered by the lockdowns. Moreover, most Roma who needed to borrow money did so through private means (family and friends) rather than through official or state institutions.
Topic:
Economics, Minorities, Ethnicity, Public Health, Pandemic, COVID-19, and Identity
Political Geography:
Europe, Ukraine, Moldova, Serbia, Albania, Montenegro, Bosnia and Herzegovina, and North Macedonia

15865. Inclusion in Crisis: The Case of Irish Travellers during the First Months of the Covid-19 Pandemic

Author:
Akofa Boglo
Publication Date:
12-2020
Content Type:
Research Paper
Institution:
European Centre for Minority Issues (ECMI)
Abstract:
Since the World Health Organisation characterised Covid-19 as a pandemic in early 2020 (WHO, 2020), the spread of the virus and efforts to control it have necessitated an ongoing restructuring of interactions between individuals, communities and entire societies. The pandemic has been an inconvenience for some and a disaster for others. Minority communities in particular have increasingly been shown to be disproportionately affected by the direct and indirect impact of the virus, which has highlighted and exacerbated existing inequalities. This paper aims to add to efforts to understand the impact of this multi-faceted crisis on societies and in particular minority communities through an assessment of the space between government and minority community responses in the Republic of Ireland. By considering how Traveller organisations have worked to protect the Traveller community, and the extent to which this effort was met and supported by the Government of Ireland’s ‘governance response’ during the first ‘wave’ of the pandemic, this case study aims to contribute to understandings of minority agency and inclusion in liberal democratic societies both during and outside of times of crisis, and hopes to show that moments of upheaval are not by necessity points of deterioration for minorities, but can carry the potential for more inclusive practices, processes and societies moving forward.
Topic:
Minorities, Public Health, Pandemic, COVID-19, Identity, and Travel
Political Geography:
Europe and Ireland

15866. United States‐Japan Cooperation on Democracy and Equity Should Tackle Gender and Racial Justice

Author:
Kristin Wilson and Jackie F. Steele
Publication Date:
03-2020
Content Type:
Special Report
Institution:
East-West Center
Abstract:
The U.S.-Japan alliance is viewed as a cornerstone of stability, the rule of law, and promotion of democracy in the Indo-Pacific. The new U.S. administration presents an important opportunity to strengthen and refocus relationships and initiatives in the region as they aim to tackle the challenges of an assertive China. In the context of globalization and transnational social justice movements, there is no longer such a clear delineation between the politics of domestic issues, such as political underrepresentation and minority rights, and those affecting foreign policy. Under the new administration, the United States and Japan have ample opportunity to reinvigorate democratic advancement, especially on gender and racial justice. To this end, civil society and social movement groups play a key role in demonstrating why only democracy can ensure the sustainability of representative institutions, cohesive societies, and inclusive economies driven by innovation and opportunity. Historically, these groups have been essential to promoting democratization within the alliance and in the Indo-Pacific region. On issues of gender justice, transnational feminist and human rights networks brought global attention to the comfort women issue starting in the 1980s. Linkages between groups in the United States, Korea, and Japan have strengthed calls for justice for the comfort women and highlighted the delegitimacy of previous backroom deals on the issue—such as the 1965 treaty with then South Korean dictator, Park Chung-hee, and the private negotiations between PM Abe and President Park in 2015. These movements for social justice underscored the growing role played by transnational civil society in international affairs and they raised the bar on the level of transparency and meaningful inclusion necessary to resolve such deep-rooted conflicts.
Topic:
Gender Issues, Human Rights, International Cooperation, Race, Bilateral Relations, Democracy, and Alliance
Political Geography:
Japan, Asia, North America, and United States of America

15867. Japan’s Counter‐Strike Debate amid the post‐Prime Minister Abe Leadership Race

Author:
Yoichiro Sato
Publication Date:
09-2020
Content Type:
Special Report
Institution:
East-West Center
Abstract:
Japanese Defense Minister Taro Kono on June 15 announced the cancellation of the planned procurement of two Aegis Ashore systems from the United States. The cancellation, which reportedly was discussed and decided only by Prime Minister Shinzo Abe and Cabinet Secretary Yoshihide Suga in advance, left a gap in the country’s missile defense against the growing missile threats from its neighbors. The Aegis Ashore decision prompted the government to revise the National Security Strategy (NSS) within 2020. As the NSS is the basis for the National Defense Program Outline (NDPO), the latter is also being revised. Kono in the Lower House Committee on Security on July 8 testified that policy considerations by the government would include possession of “enemy base strike capabilities.” The ruling Liberal Democratic Party (LDP) subsequently formed a project team (PT) on missile defense, chaired by former Defense Minister Itsunori Onodera. The PT discussions produced by the end of July a set of recommendations inclusive of a more vaguely phrased “consideration of the ability to head off missiles in enemy territory,” which became the LDP recommendation to the government.
Topic:
Defense Policy, National Security, and Domestic Politics
Political Geography:
Japan, Asia, and United States of America

15868. The United States and Fiji Reaffirm Security Assistance Cooperation

Author:
Steven McGann
Publication Date:
09-2020
Content Type:
Special Report
Institution:
East-West Center
Abstract:
The United States and Fiji continue to strengthen security cooperation in the Indo-Pacific region. Ties between the regional partners endured throughout Fiji’s 2006 military takeover and resultant domestic political challenges. During this period Washington’s engagement with Suva included humanitarian assistance/disaster response, maritime security, law enforcement cooperation, counter-narcotics, and anti-trafficking of vulnerable populations. The United States also supported Fiji’s participation in existing United Nations Peacekeeping Operations. In turn Fiji continued to support U.S. initiatives regarding United Nations General Assembly resolutions and kept doors open for development aid and private sector investment opportunities. The recent defense security cooperation assistance agreement with Fiji supports substantial funding for training and equipment for the Royal Fijian Military forces (RFMF) for future peacekeeping opportunities as well as an immediate boost for its navy including patrol boats to support fisheries protection as well as search and rescue efforts.
Topic:
Security, Humanitarian Aid, International Cooperation, Investment, and Private Sector
Political Geography:
North America, United States of America, and Fiji

15869. Forward the Mekong-U.S. Partnership

Author:
Brian Eyler and Courtney Weatherby
Publication Date:
10-2020
Content Type:
Special Report
Institution:
East-West Center
Abstract:
On September 11, 2020 the United States, Cambodia, Laos, Myanmar, Thailand, Vietnam, and the ASEAN Secretariat launched the Mekong-US Partnership, a regional cooperation framework which upgrades the Obama-era Lower Mekong Initiative (LMI). The U.S. Department of State says the Partnership will expand on the success of the LMI “by strengthening the autonomy, economic independence, and sustainable development of the Mekong partner countries and promote a transparent, rules-based approach to transboundary challenges.” The new Partnership comes with an initial pledge of more than $150 million of U.S. funded programming to support COVID-19 recovery, counter transnational crimes, develop efficient energy markets, and counter trafficking in persons. A revitalization and upscaling of U.S. engagement in the Mekong is long overdue, particularly given China’s increasing engagement in the region and the economic challenges that Mekong countries will struggle with as a result of the coronavirus pandemic and chronic drought conditions. While the Partnership is still in its formative stages, there are several actions that would go a long way towards bolstering its effectiveness.
Topic:
International Relations, Development, Partnerships, and ASEAN
Political Geography:
Vietnam, Cambodia, Thailand, Southeast Asia, Laos, Myanmar, United States of America, and Mekong River

15870. From Transparent to Transparency: The Evolution of the Mekong River Commission's Prior Consultation Process

Author:
An Pich Hatda
Publication Date:
10-2020
Content Type:
Special Report
Institution:
East-West Center
Abstract:
An Pich Hatda, CEO of the Mekong River Commission, explains that: “The mainstream hydrology is changing, affecting the timing and volume of reverse flows into the Tonle Sap Lake, and making any definition of the wet and dry seasons a moving target.” Chapter III of the 1995 Mekong Agreement outlines the objectives and principles that underpin transboundary governance in the Lower Mekong Basin (LMB). But the powers and functions outlined in the Agreement and the Rules of Procedures for the standing bodies, and the non-interventionist approach that underpins diplomacy in the region, dictate how this is done. While Chapter III of the Agreement outlines the intentions of transboundary governance, the more detailed processes that underpin water diplomacy were deferred to agreement on Rules for Water Utilisation and Inter-Basin Diversion, now the five MRC Procedures. These took another 20 years to finalize. The Procedures for Notification, Prior Consultation, and Agreement (PNPCA) may pose some of the biggest challenges for the Mekong River Commission (MRC). The Member Countries envisaged three forms of inter-State dialogue: Notification: applied to all uses on the tributaries and intra-basin use in the wet season; Prior Consultation (PC): applied to intra-basin use in the dry season, and inter-basin diversion of water in the wet season; and Agreement: applied to inter-basin use in the dry season.
Topic:
Diplomacy, Environment, Governance, Borders, and Transparency
Political Geography:
Southeast Asia and Mekong River

15871. United States-Canada Transboundary Water Governance Prioritizes Stakeholder Engagement

Author:
Jane Corwin
Publication Date:
10-2020
Content Type:
Special Report
Institution:
East-West Center
Abstract:
A review of the construct and functionality of the International Joint Commission may offer an example of effective water governance to be emulated in the Indo-Pacific Region. As water knows no boundaries nor political authority, collaboration across borders is necessary in order to manage water apportionment, flood/drought mitigation, and water quality in transboundary waters. Additionally, the importance of effective water governance will only increase with a changing climate. The governments of the United States and Canada recognized this in 1909 with the signing of the Boundary Waters Treaty (BWT). In the BWT, the governments established the mechanism by which the two countries would jointly manage their common waters. The governments created the International Joint Commission (IJC) to be one of those mechanisms. Further affirmation of the need for cross boundary cooperation resulted in the signing of the Great Lakes Water Quality Agreement in 1972, most recently updated in 2012, which directs the IJC to assess progress and garner public input to achieve water quality objectives established by the two governments. The BWT gives the IJC power to resolve water disputes through Orders of Approval and References.
Topic:
Treaties and Agreements, Territorial Disputes, Governance, and Borders
Political Geography:
Canada and United States of America

15872. Negotiating Transboundary River Governance in Myanmar

Author:
Khin Ohnmar Htwe
Publication Date:
10-2020
Content Type:
Special Report
Institution:
East-West Center
Abstract:
Myanmar lies in the northwestern part of Indo-Chinese Peninsular or mainland South-East Asia. It is bounded by China on the north and north-east, Laos on the east, Thailand on the south-east, and Bangladesh and India on the west. There are 7 major drainage areas or catchment areas in Myanmar comprising a series of river- valleys running from north to south. The drainage areas in Myanmar are Ayeyarwady and Chindwin Rivers and tributaries (55.05%), Thanlwin (Salween) River and tributaries (18.43%), Sittaung River and tributaries (5.38%), Kaladan and Lemyo Rivers and tributaries (3.76%), Yangon River and tributaries (2.96%), Tanintharyi River and tributaries (2.66%), and Minor Coastal Streams (11.76%). Myanmar possesses 12% of Asia’s fresh water resources and 16% of that of the ASEAN nations. Growing nationwide demand for fresh water has heightened the challenges of water security. The transboundary river basins along the border line of Myanmar and neighboring countries are the Mekong, Thanlwin (Salween), Thaungyin (Moai), Naf, and Manipu rivers. The Mekong River is also an important transboundary river for Myanmar which it shares with China, Laos, and Thailand. The Mekong River, with a length of about 2,700 miles (4,350 km), rises in southeastern Qinghai Province, China, flows through the eastern part of the Tibet Autonomous Region and Yunnan Province, and forms part of the international border between Myanmar (Burma) and Laos, as well as between Laos and Thailand. The Mekong River meets the China–Myanmar border and flows about six miles along that border until it reaches the tripoint of China, Myanmar, and Laos. From there it flows southwest and forms the border of Myanmar and Laos for about 60 miles until it arrives at the tripoint of Myanmar, Laos, and Thailand. This is also the point of confluence between the Ruak River (which follows the Thai–Myanmar border) and the Mekong.
Topic:
Natural Resources, Water, Governance, and Borders
Political Geography:
Bangladesh, China, India, Thailand, Southeast Asia, Laos, and Myanmar

15873. Stakeholder engagement in the Mekong River: Relevant Findings from the Blue Peace Index

Author:
Matus Samel
Publication Date:
10-2020
Content Type:
Special Report
Institution:
East-West Center
Abstract:
Water management and transboundary water cooperation affect people’s rights, and projects must balance the needs of different sectors of society. The Blue Peace Index, developed by the Economist Intelligence Unit (EIU) with support from the Swiss Agency for Development and Cooperation (SDC), highlights that major tensions over water resources often arise not between states, but rather governments or commercial developers on the one hand, and affected communities on the other, or between communities themselves. Protests and tensions related to issues like pollution, inadequate resettlement logistics, and damage to livelihoods, have affected water infrastructure developments across the world. In pursuing sustainable and collaborative management of transboundary waters, inclusive participation of legitimate stakeholders is essential. In the Mekong River, top-down basin-level stakeholder engagement has been limited by the fact that the river’s upstream states, China and Myanmar, are only “dialogue partners”, not full members, of the Mekong River Commission (MRC), alongside the riparian neighbors Cambodia, Laos, Thailand, and Vietnam. Despite some positive developments in recent years with regards to basin-level dialogue through both the MRC and the Lancang–Mekong Cooperation Framework – a development and investment initiative promoted by China since 2016 as a platform for all Mekong riparian states – the lack of a single comprehensive platform for basin-level dialogue remains a major challenge to transboundary water cooperation, including in terms of stakeholder engagement.
Topic:
Regional Cooperation, Borders, Management, Dialogue, and Stakeholders
Political Geography:
Mekong River

15874. The Need to Move from Water Government to Water Governance Involving Civil Society

Author:
Leonie Pearson
Publication Date:
10-2020
Content Type:
Special Report
Institution:
East-West Center
Abstract:
With over 780 million people dependent on transboundary rivers in South and Southeast Asia, water governance is vital to regional development. Yet, the current approach to water governance is dominated by state-centric actors (sometimes called the “hydrocracy”) and is not delivering sustainable water management for people or ecosystems. The so-called “hydrocracy” is a mix of government, bureaucrats, politicians, and national development banks, often aligned with private developers. They have established strong processes for governing transboundary water and are focused on maintaining the cyclical planning-to-construction of large infrastructure projects, e.g. dams, hydropower plants, bridges, etc. These state-centric actors are focused on delivering water allocation, utilisation and management with a clear agenda of ‘the state has a duty to develop its water resources’ for national economic development. For many, the state-centric actors are delivering the governmental agenda. Therefore, it is not governance that is managing transboundary water in Asia, but government.
Topic:
Civil Society, Development, Government, Water, and Governance
Political Geography:
Southeast Asia

15875. Stakeholder Engagement on Transboundary Water Management in Cambodia, Laos, and Vietnam

Author:
Jake Brunner and Raphaël Glémet
Publication Date:
10-2020
Content Type:
Special Report
Institution:
East-West Center
Abstract:
The International Union for Conservation of Nature’s (IUCN) Swiss-funded Building River Dialogue and Governance (BRIDGE) program supports countries that share river or lake basins to implement effective water management arrangements through a shared vision, benefit-sharing principles, and transparent and coherent institutional frameworks. BRIDGE works in 15 large transboundary river basins globally, including the Mekong. Within the Mekong, BRIDGE focuses on the Sekong, Sesan and Srepok (3S) river basins in Cambodia, Laos, and Vietnam. Covering 10% of the Mekong river basin, the 3S provide 20% of its flow and a similar proportion of its suspended sediment. These rivers are also spawning grounds for many migratory fish species and freshwater biodiversity hotspots. As in the Mekong basin as a whole, water management in the 3S is dominated by government agencies and allied businesses whose interests are narrowly institutional. This has two consequences: investment decisions that only consider the institutional or national benefit may have large negative transboundary externalities, and appeals to the impact of upstream projects on biodiversity and livelihoods downstream tend to fall on deaf ears.
Topic:
Regional Cooperation, Natural Resources, Water, and Stakeholders
Political Geography:
Vietnam, Cambodia, Southeast Asia, and Laos

15876. Lessons from Australia’s Intra‐Country Transboundary Rivers Governance

Author:
John Dore
Publication Date:
10-2020
Content Type:
Special Report
Institution:
East-West Center
Abstract:
Australia is a federation of 25 million people and a pre-Covid-19 GDP of $1.4 trillion. In practice, state and federal governments have to work together. Australia also has a highly variable climate and hydrology. Increasingly irregular rainfall and high rates of evaporation result in the lowest run-off among inhabited continents. The Murray Darling Basin (MDB) covers nearly 400,000 square miles of south-eastern Australia, twice the land area of Thailand. It contains the largest and most complex river system in Australia, with 50,000 miles of rivers, many of which are connected. The MDB includes 16 internationally significant wetlands, 35 endangered species and 98 different species of waterbirds. First Nations people have lived in what we now call the MDB for over 50,000 years and the basin contains many sacred and spiritually significant sites. The MDB has been the site of most Australian transboundary water governance experiences, with 6 governments involved: Federal, four states, and one territory—the Australian Capital Territory (ACT). For about 160 years there have been agreements and plans about how much water can be used from the River Murray and the Basin as a whole. Over the decades more and more water was being extracted. The health of the Murray Darling system was in decline.
Topic:
Environment, Natural Resources, and Governance
Political Geography:
Australia and Thailand

15877. A Role Model for Water Governance in a Shared Basin: the Example of the Danube

Author:
Ivan Zavadsky
Publication Date:
10-2020
Content Type:
Special Report
Institution:
East-West Center
Abstract:
The International Commission for the Protection of the Danube River (ICPDR) is the largest transnational river basin management body in Europe. Its work is based on the Danube River Protection Convention (DRPC), signed on June 29, 1994 in Sofia, Bulgaria, the major legal instrument for cooperation and transboundary water management in the Danube River Basin. The ICPDR was established in 1998. The Convention was signed by eleven countries: Austria, Germany, the Czech Republic, Bulgaria, Croatia, Hungary, Moldova, Romania, Slovakia, Slovenia, Ukraine, and the European Union. Serbia joined the Convention in 2003, followed by Bosnia and Herzegovina in 2005. Montenegro became the 14th ICPDR member in 2008. The ICPDR is formally comprised by the Delegations of all Contracting Parties to the DRPC. The ultimate goal of the ICPDR is to implement the Danube River Protection Convention, and make it a “living” instrument. The mission of the institution is to promote and coordinate sustainable and equitable water management, including conservation, and improvement and rational use of waters for the benefit of the Danube River Basin countries and their people. The ICPDR pursues its mission by making recommendations for the improvement of water quality, developing mechanisms for flood and accident control, agreeing on standards for emissions, and by assuring that these measures are reflected in the Contracting Parties’ national legislation and are applied in their policies.
Topic:
Treaties and Agreements, Natural Resources, Water, Governance, and European Union
Political Geography:
Europe

15878. Riparian Governance in South Asia: Many Rivers to Cross

Author:
Rajiv Bhatia
Publication Date:
10-2020
Content Type:
Special Report
Institution:
East-West Center
Abstract:
Governance of transboundary rivers in South Asia is both complex and challenging due to a peculiar mix of imperatives relating to geography, demographics, and geopolitics. Hosting a quarter of the world’s population, the region, however, has no choice but to improve its record of riparian governance if it is to contribute more to the world’s well-being and its own.
Topic:
Demographics, Water, Governance, Geopolitics, and Geography
Political Geography:
South Asia

15879. Measuring Shinzo Abe’s Impact on the Indo‐Pacific

Author:
John Hemmings
Publication Date:
10-2020
Content Type:
Special Report
Institution:
East-West Center
Abstract:
Last month’s news that Japan’s Prime Minister Shinzo Abe was stepping down came like a thunderbolt from the blue. Once again, a health condition that had compelled him to step down in 2007, resurfaced. Whatever else one might say about Abe ‘the politician’ or Abe ‘the nationalist’, one cannot refute the fact that Abe the ‘grand strategist’ has had the most impact on Japan’s security posture since the Second World War. Of course, the question will be how Yoshihide Suga - his successor - adjusts Japan's grand strategy in coming months before he calls an election. One thing is already obvious, Suga – and, indeed, the next generation of future prime ministers – will have to live with Abe’s legacy in one form or another. This is all a long way from 2007, when Abe’s one-year premiership was already in the rear-view mirror. Even as he recovered his health, there were whispers in the corridors of Kasumigaseki that he intended to make a comeback and become prime minister again. At the time, many Japan-watchers were skeptical about his chances. His first year had not been particularly successful or popular. Indeed, the loss of the Upper House to the opposition Democratic Party of Japan had paved the way for their electoral in in 2009. Despite this inauspicious beginning, not only did Abe challenge his doubters by successfully running for LDP leadership in September 2012 but he campaigned on a slogan of “take back Japan” in November and won the premiership back in 2012.
Topic:
Security, Elections, and Grand Strategy
Political Geography:
Japan and Indo-Pacific

15880. How Market Sentiment Drives Forecasts of Stock Returns

Author:
Roman Frydman, Nicholas Mangee, and Josh Stillwagon
Publication Date:
05-2020
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
We reveal a novel channel through which market participants’ sentiment influences how they forecast stock returns: their optimism (pessimism) affects the weights they assign to fundamentals. Our analysis yields four main findings. First, if good (bad) “news” about dividends and interest rates coincides with participants’ optimism (pessimism), the news about these fundamentals has a significant effect on participants’ forecasts of future returns and has the expected signs (positive for dividends and negative for interest rates). Second, in models without interactions, or when market sentiment is neutral or conflicts with news about dividends and/or interest rates, this news often does not have a significant effect on ex ante or ex post returns. Third, market sentiment is largely unrelated to the state of economic activity, indicating that it is driven by non-fundamental considerations. Moreover, market sentiment influences stock returns highly irregularly, in terms of both timing and magnitude. This finding supports recent theoretical approaches recognizing that economists and market participants alike face Knightian uncertainty about the correct model driving stock returns.
Topic:
Economics, Markets, and Stock Markets
Political Geography:
United States