NEWSLETTER
In fall 2014 HKUST IEMS had a
busy schedule of events which
engaged emerging market issues
across the globe. In addition to
several events focused on China,
including a workshop on minimum
wages in China and Hong Kong, the Institute organized events
on Latin America (lecture on Mexico’s structural reforms by the
Vice Governor of Mexico’s Central Bank), Russia and Europe (talk
on economic implications of the Ukrainian crisis for Ukraine,
Russia, and Europe), Africa (conference on China’s impact on
African workers), India (seminar on microfinance programs in
India), and East Asia (hosting a conference of Asia’s top labor
economists). We also cosponsored a major conference which
brought together leading international experts to discuss the
frontiers of innovation research in an event titled “Globalization
of Knowledge Creation and Innovation in the Context of
Emerging Economies”.
The Institute also made great strides in strengthening its capacity
to share its research results and communicate to a broad
global audience. It began publication of HKUST IEMS Thought
Leadership Briefs to make research by Faculty Associates more
accessible and highlight their policy relevance. The Institute
also launched a new website and new social media channels
on Facebook, Twitter, YouTube, Google+, Weibo, and WeChat
in September. Please follow us on these different platforms
(see back of this newsletter for QR codes) and share them with
colleagues and friends to expand our information network!
DIRECTOR’S MESSAGE
Albert Park
SPRING 2015
Since early 2014, the unstable geopolitical situation in Ukraine
and Russia has led to a butterfly effect of implications for the
global economy.
Christopher Hartwell
—a leading scholar
on Russian affairs and the President of the Center for Social
and Economic Research in Warsaw, Poland—expounded on
both the history behind and future implications of Russia's
recent forays into Ukrainian affairs. It was the first talk in a
new Emerging Market Insights Series co–sponsored by EY
Hong Kong and the HKUST Leadership and Public Policy
Executive Education Program.
“To save Ukraine in the long term, anything less than
dramatic, 'big bang' institutional reform is bound to fail,”
stated Dr. Hartwell. As an example, Dr. Hartwell pointed
to Ukraine's kafkaesque trade and customs departments,
both mired in corruption and heavy-handed red tape which
hamper Ukraine's cross-border trading.
Dr. Hartwell stated that, for a Eurozone still struggling with
its own issues—ranging from sovereign debt crises and
high government budget deficits to wide-spread youth
unemployment in southern Europe—anything that increases
instability or necessitates greater defense spending would
be a major blow to struggling EU economies. Even in the
best case scenario where the Russia and Ukraine conflict
blows over, the EU's projected growth rate is anemic, with
an estimated 1.5% growth rate for 2014 and 2.0% for 2015.
However, far and away the largest potential implication of
Russia’s aggression for Europe is energy. Europe is still highly
dependent on Russian natural gas imports and, at least in the
short term, Europe has few alternatives but to import from
Russia.
Regarding the topic of a trade war between Russia and the
US/Eurozone, Dr. Hartwell confided, “Russia will win...Russia
has a lot of experience in this area. [The current US/
Eurozone] targeted sanctions are hitting the Russian elite, and
can be worked around. Ordinary Russians have a long history
Watch the video recording of the
presentation and view event photos at
AS GOES RUSSIA, SO GOES EUROPE?
HKUST IEMS and LAPP – EY Hong Kong Emerging
Market Insights Series (2014.11.03)
of bearing economic hardships, and seem to support Vladimir
Putin’s actions.”
With respect to implications for Asia, Dr. Hartwell was more
optimistic. “Surprisingly, Asia may benefit from the turmoil
in the West. Russia is now looking East instead of West,
which may divert trade away from Europe and become an
opportunity for Chinese investors and manufacturers.” Dr.
Hartwell conceded that, pre-conflict, Russia had already
pushed the idea of Eurasian integration, but sanctions have
accelerated this move. That said, Dr. Hartwell argued that
there may not be much additional benefit to be gained
from closer integration between China and Russia, as there
is relatively little overlap between the two economies. And
China also loses from a weak European recovery and global
economic instability. For these reasons, Russia's invasion has
been an unmitigated negative for all countries involved.
Angeline Yee (HKUST LAPP), Christopher Hartwell, Albert Park, Agnes Chan (EY
Hong Kong)
