The past year unfolded with Japan’s unprecedented triple disaster and closed with U.S. Secretary of State Hillary Clinton’s historic trip to Myanmar. Moving into 2012, Europe’s economy creaks along uncertainly and China gears up for a major leadership change. In an interview with the Ukranian magazine Glavred, political science professor Phillip Lipscy discusses landmark Asian economic and political events of 2011, and what they could mean in the coming year.

What was the most significant event in terms of Asia’s economy in 2011?

The March 11 Great Tohoku earthquake and tsunami: Besides the tragic loss of life and property, the disaster disrupted global supply chains and plunged the Japanese economy into a recession. The nuclear meltdown in Fukushima also led many countries to question the future of nuclear energy—this will have long-lasting consequences for global energy markets and efforts to deal with climate change.

What was the most significant political event?

Signs of political opening in Burma/Myanmar could have profound consequences not only for that country but for the rest of Asia as well. Hillary Clinton became the first U.S. Secretary of State to visit the country in 50 years. Aung San Suu Kyi has been released from detention and the National League for Democracy has re-registered as a political party. If this leads to democratization, it will be remembered as an important turning point.

What new policy and economic trends appeared in 2011? Which of them will continue into the coming year?

There seems to be a subtle shift in views towards China's economy. Chinese government officials are deeply concerned about the "middle income trap." China has reached a level of development where many countries saw their economic growth slow down sharply. Rising incomes are eroding China's advantage in low-cost manufacturing. There is much talk of multinational companies relocating their operations to even cheaper countries, such as Vietnam. This is an important transition for China, and it will remain an important issue in coming years.

In terms of people, who do you feel was the most notable, and who was
the most disappointing this past year?

The people of Japan, who responded with remarkable perseverance, order, and discipline to such a tragic natural disaster.  

The most disappointing were the political leaders of Japan, who could not set aside
their differences and come together for the sake of their country.

Will China continue to spread its influence in 2012, and might any countries oppose this process?

China is now the second largest economy in the world and an important military power. It is inevitable that China will rise in international stature and influence. However, Chinese leaders also face some important challenges—rising inequality, an overheated housing market, and bad loans in its financial system. The focus of international attention should be on integrating China into the world order as a peaceful, responsible stakeholder—not on confrontation.

What impact could the economic crisis in Europe have on the economics and international policy of the Asia-Pacific region?

If the financial crisis in Europe is mismanaged, nobody will escape the consequences. Europe is a crucial export market for Asian countries, and European financial institutions are major lenders to emerging economies in the region. Equally as important, repeated financial crises and political mismanagement in the United States, Japan, and Europe could begin to undermine perceptions of democratic government and capitalism.

What will be most important event in Asia next year?

China's leadership transition, particularly given the many immediate challenges the country faces.

More than 500,000 people live in Mathare, the second-largest collection of slums in Nairobi, Kenya. Crime and disease ravage the population, and shanties have no electricity or running water. But there’s one piece of technology that everyone seems to have, one which promises to bring much-needed improvements: the cell phone.

Cell phones are central to two of the eight most recent Global Underdevelopment Action Fund projects funded by the Freeman Spogli Institute for International Studies. Both projects will be led by Joshua Cohen, a professor of political science, philosophy and law and the Marta Sutton Weeks Professor of Ethics in Society.

The first of Cohen’s projects will examine whether texting private and accurate health advice will increase awareness of risky sexual behavior among Mathare’s younger residents who face high rates of pregnancy and sexually transmitted diseases.

Cohen's second project involves teaching women to use mobile technology to meet up with larger groups while traveling at night, which Cohen believes can led to a decrease in the number of assaults, muggings and rapes. Eventually, the hope is that the program can be taken over by Kenya’s police and expanded.

Cell phone charging station in Mathare

Six other projects are receiving support from the third round of Global Underdevelopment Action Fund awards, amounting to a total of $265,000.

The funds will enable multidisciplinary teams led by Stanford faculty from across the university to perform policy-relevant research focused on global underdevelopment challenges.

The funded projects will have real world impact. They will help target tuberculosis, which kills more than 1 million people a year and hinders economic development in the hardest-hit regions, like parts of India. They evaluate the amount of resources necessary to improve test scores and lower anemia rates among China’s rural schoolchildren. They ensure that health care is accessible to people in the Arab world where countries are undergoing political transitions. And they evaluate the challenges and benefits of bringing solar power to areas in Africa where electricity is a rare commodity.

As varied as the eight projects are, each will train Stanford undergraduate or graduate students, stressing the importance that Stanford and FSI place on training the next generation of researchers and policy influencers.

The projects were selected by a faculty committee chaired by Stephen D. Krasner, FSI’s deputy director and the Graham H. Stuart Professor of International Relations.

The Action Fund is supported by FSI donors, matching funds from the Office of the President and FSI. The fund grew out of the institute’s 2010 conference on Technology, Governance, and Global Development. This year’s follow-up conference further showcased FSI’s commitment to challenges posed by global underdevelopment with a focus on food security and health.

The award-winning projects and their principal investigators are:

• Texting for Sexual Health: Effects of Information Provision and Common Knowledge on Health-Seeking Behavior in Kenya
  Joshua Cohen
  In hopes of increasing awareness that could minimize sexual health risks, the team will promote a mobile health counseling service, which will enable young people in Nairobi’s Mathare slums to receive private and reliable answers from health counselors through text messaging.
• Can Mobile Phones Coordinate Community Action to Improve Women’s Safety in Slums?
  Joshua Cohen
  The program uses mobile technology to measure whether the number of assaults on women will decrease if they travel in groups. The project will evaluate whether this “safety in numbers” program can be taken over by Kenyan police.

• Crime, Violence and Governance in Latin America: Sharing Data and Building a Web-Based Research Network to Expand Knowledge
  Mariano-Florentino Cuéllar
  This project will build a systematically organized repository of research on crime, violence and citizen security in Latin America.
• Tuberculosis Control and its Benefits to the Rural Poor
  Jeremy Goldhaber-Fiebert
  This study will determine the impact of improved TB control effects in India, which accounts for 20 percent of global TB incidence, and project economic outcomes from India’s TB epidemic over the next decade.
• Paying for Performance to Improve Health in Rural China: Does Resource Scarcity Breed Innovation in Service Delivery?
  Grant Miller
  This study will evaluate whether large subsidies are necessary for improving social situations like lowering anemia rates or improving test scores.
• Health and Political Reform in the Arab World
  Paul H. Wise
  Partnering with The Lancet journal and the American University of Beirut, the team will produce a series of articles on war, social change and health in the Arab world with a goal of improving health care in countries undergoing political transition.
• Solar Lighting and Phone Charging in East Africa: Understanding Adoption, Business Models and Development Outcomes
  Frank Wolak
  This project will analyze new solar businesses in East Africa. Electricity is central to industry, health services and education, yet 1.5 billion people worldwide lack access. Recently, low-power solar energy sources in homes have appeared as viable options.
• Understanding the Current Status of Medical Technology in Rural China
  Paul Yock
  This study will evaluate the use of medical technology in rural China in order to establish a baseline for future work and establish partnerships. The long-term goal is an analytical framework within which to understand the role of medical technology in Chinese health care.

On December 6, the Program on Arab Reform and Democracy at the Center on Democracy, Development, and the Rule of Law together with the Safadi Foundation USA inaugurated the Safadi-Stanford Initiative for Policy Innovation (SSIPI) at a conference hosted by the Woodrow Wilson International Center for Scholars in Washington, DC and supported by the Center for International Private Enterprise. This gathering convened an upwards of 100 guests to explore the conference's theme of economic reform and development in the Arab world.  

The keynote addresses were delivered by IMF Head Christine Lagarde who commented on the economic landscape in the region and suggested methods to stimulate growth for emerging Arab economics, and Lebanese Finance Minister Mohammad Safadi who stressed the importance of institution building and transparent accountable governance practices for development in the region, particularly in relation to how Arab governments handle international aid.

Safadi Scholar of the Year Katarina Uherova Hasbani presented the findings of a research study she authored on electricity sector reform in Lebanon while in residence at CDDRL this fall. The SSIPI research partnership was initiated to promote policy-relevant research on Lebanon and supported Hasbani's visiting fellowship at Stanford. Hasbani, an energy policy expert, presented her findings to the policy- making community, arguing that reliable and stable electricity supplies are a pre-condition for economic development. Hasbani cautioned that the failing electricity sector in Lebanon threatens the country's progress diverting resources from social development and education.

Deputy Assistant Secretary of State for Near Eastern Affairs Tamara Wittes and Mara Rudman, Assistant Administrator for the bureau for Middle East at USAID, both commented on the development challenges and opportunities that lie in the wake of the Arab Spring. "What is happening in the region is about the people writing their own story," said Wittes. "The United States has to approach this with a sense of humility but we have a role to play because we are a major presence in the region." Rudman added that USAID is reaching out to new audience and partners in Egypt, many of whom are outside Cairo, to engage new actors after the January 25 revolution.

Miriam Allam, an economist with the OECD and Safadi Scholar first runner-up stressed the importance of public consultation and good regulation as best practices for cultivating active and democratic citizenship. Undersecretary of State for Economic, Energy, and Agricultural Affairs Robert D. Hormats, underscored the fact that economic reform must match social and political change in the region to create diverse economies that support growth, investment, and trade.

Inger Anderson, Vice-President for MENA at the World Bank, commented on the funding shortages from European countries that are resulting in decreased investment in the Arab world, when they need it the most. Both Anderson and Lagarde advocated for the reform of government subsidies, according to Lagarde, "governments need sustainable fiscal policies, including better targeted subsidies to help low-income groups."

Lagarde added that a key way forward is encouraging private sector investment to spur job creation but stressed that this requires predictability, a stable legal and tax environment, absence of corruption, and the elimination of regulatory loopholes.

Through this conference and ongoing research, the Safadi-Stanford Initiative for Policy Innovation seeks to offer new approaches and recommendations to advance development and governance practices in the region.

Transcript and video of event:

http://www.wilsoncenter.org/event/the-middle-the-storm-development-and-governance-the-arab-world

Speech by IMF Managing Director Christine Lagarde:

http://www.imf.org/external/np/speeches/2011/120611.htm