nep-sea New Economics Papers
on South East Asia
Issue of 2008‒05‒31
eight papers chosen by
Kavita Iyengar
Asian Development Bank

  3. A Leading Indicator Model of Banking Distress ¡V Developing an Early Warning System for Hong Kong and Other EMEAP Economies By Jim Wong; Eric Wong; Phyllis Leung
  4. Food Supply in Java during War and Decolonisation, 1940-1950 By van der Eng, Pierre
  5. Air Quality and Early-Life Mortality: Evidence from Indonesia's Wildfires By Seema Jayachandran
  6. Pakistan lags behind in technical textile By JANJHJI, NOOR ZAMAN; MEMON, NOOR AHMED
  7. Scenarios of Carbon Dioxide Emissions from Aviation By Karen Mayor; Richard S. J. Tol
  8. Determinants of self-employment : the case in Vietnam By Thi Quynh Trang Do; Gérard Duchêne

  1. By: Pierre van der Eng
    Abstract: Australia’s relationship with Indonesia became strained after Indonesia’s declaration in 1963 of confrontation’ (konfrontasi) with Malaysia. During 1964-65, Australia was engaged in a covert war against Indonesia, but it continued to give aid to the country. This ambiguity in Australian foreign policy was consistent with the overnment’s principle of maintaining a firm but friendly attitude towards Indonesia. A second reason was that government was keen not to abandon an important aid project in Indonesia, the Aeronautical Fixed elecommunication Network. The project remedied deficiencies in Indonesia’s civil aviation communications system and would benefit Qantas flights through Indonesian airspace. Continuation of aid would keep lines of communication with Indonesian officials open that would otherwise be closed.
    Date: 2008–05
  2. By: Tingsong Jiang; Warwick McKibbin
    Abstract: A Free Trade Area of the Asia-Pacific (FTAAP) has been proposed as a long-term prospect by the Asia-Pacific Economic Cooperation (APEC). This paper examines the impact of the FTAAP on the national and regional economies in China using a suite of general equilibrium models: APG-Cubed, a dynamic global model; GTAP, a static global model; and CERD, a static China model with regional dimension. The impact on the Chinese economy of the APFTA is also compared with those of other forms of FTAs such as the ASEAN-China FTA (ACFTA) and the East Asia FTA (EAFTA). China benefits from all three FTAs, and the eastern region gains the most. It is also found that China's benefit increases along with the increase in coverage of the FTAs, that is, the APFTA has the biggest positive impact on the Chinese economy, among the three FTAs considered in this study. Sector-wise, textile, clothing and footwear sector gains the most from the FTAAP, while motor vehicle and parts sector loses the most.
    Date: 2008–05
  3. By: Jim Wong (Research Department, Hong Kong Monetary Authority); Eric Wong (Research Department, Hong Kong Monetary Authority); Phyllis Leung (Research Department, Hong Kong Monetary Authority)
    Abstract: This study develops a probit econometric model to identify a set of leading indicators of banking distress and estimate banking distress probability for Hong Kong and other EMEAP economies. Macroeconomic fundamentals, currency crisis vulnerability, credit risk of banks and companies, asset price bubbles, credit growth, and the occurrence of distress of other economies in the region are found to be important leading indicators of banking distress in the home economy. The predictive power of the model is reasonably good. A case study of Hong Kong based on the latest estimate of banking distress probability and stress testing results shows that currently the banking sector in Hong Kong is healthy and should be able to withstand well certain possible adverse shocks. Under some extreme shocks originating from real GDP growth and property prices such as those that occurred during the Asian financial crisis, the model indicates a non-negligible risk of an occurrence of banking distress in Hong Kong. However, the chances of the occurrence of such severe events are extremely low. Simulation results also suggest that compared to the period before the Asian financial crisis, the local banking sector is currently more capable of withstanding shocks similar to those that occurred during that crisis. The study also finds that banking distress is contagious, suggesting that to be effective in monitoring banking distress, close cooperation between central banks should be in place.
    Keywords: Banking distress, Asia Pacific economies, econometric model
    JEL: E44 E47 G21
    Date: 2007–12
  4. By: van der Eng, Pierre
    Abstract: It is readily assumed that the average level of living in Indonesia deteriorated during the hectic period 1940-1950. Much of the evidence on economic change during this period is anecdotal. It is difficult to distil a general impression from it. Per capita food consumption is an important indicator of the average standard of living. For that reason this paper monitors the changes in food production, distribution and supply in the densely populated core island of Java in Indonesia. Food supply was adequate in Indonesia when the Japanese attack on the country started in 1941. During 1944-1948 per capita food supply was at a very low level in Java. In the years 1943-1945 the low level was caused by the restrictions imposed by the Japanese authorities on the domestic trade of food products, and by the coercive system of purchasing rice for distribution. Both created disincentives for farmers to produce a food surplus. Similar reasons explain the situation during the years 1946-1948. Moreover, the controversy between the returning colonial government and the government of the nationalist Republic of Indonesia impeded free shipments of food between the food deficient urban areas and the food producing rural areas. Food supply recovered during 1948-1950, with the economic re-integration of most of Indonesia.
    Keywords: Food supply; Java; Indonesia; war; decolonisation
    JEL: N55 N35 Q18
    Date: 2008–05
  5. By: Seema Jayachandran
    Abstract: Smoke from massive wildfires blanketed Indonesia in late 1997. This paper examines the impact this air pollution (particulate matter) had on fetal, infant, and child mortality. Exploiting the sharp timing and spatial patterns of the pollution and inferring deaths from "missing children" in the 2000 Indonesian Census, I find that the pollution led to 15,600 missing children in Indonesia (1.2% of the affected birth cohorts). Prenatal exposure to pollution largely drives the result. The effect size is much larger in poorer areas, suggesting that differential effects of pollution contribute to the socioeconomic gradient in health.
    JEL: I12 O1 Q52 Q53 Q56
    Date: 2008–05
    Abstract: This paper highlights and demonstrates the technical and economical impact of technical textiles in the industrially developed countries and their future contribution to the development of economics of newly developing countries, such as China, South East Asia, and North Africa etc. Pakistan still lags behind in technical textile products as neither the government nor the textile industry has made any serious efforts towards synchronizing textile products with the emerging needs of the world market by developing higher value-added products. Although the textile sector is the backbone of Pakistan’s economy, the Government as well as the textile industry has kept their focus on conventional textiles, ignoring technical textiles and knowledge-based products. A special focus is placed on the application of technical textiles related automotive, medical, construction/civil engineering and sportswear’s fields.
    JEL: F2 E3 C2
    Date: 2007–09–10
  7. By: Karen Mayor (Economic and Social Research Institute (ESRI)); Richard S. J. Tol (Economic and Social Research Institute (ESRI))
    Abstract: We use a model of international and domestic tourist numbers and flows to forecast tourist numbers and emissions from international tourism out to 2100. We find that between 2005 and 2100 international tourism grows by a factor of 12. Not only do people take more trips but these also increase in length. We find that the growth in tourism is mainly fuelled by an increase in trips from Asian countries. Emissions follow this growth pattern until 2060 when emissions per passenger-kilometre start to fall due to improvements in fuel efficiency. Forecasted emissions are also presented for the four SRES scenarios and maintain the same growth pattern but the levels of emissions differ substantially. We find that the forecasts are sensitive to the period to which the model is calibrated, the assumed rate of improvement in fuel efficiency and the imposed climate policy scenario.
    Keywords: Carbon dioxide emissions, international tourism, long-term forecasting, aviation
    Date: 2008–05
  8. By: Thi Quynh Trang Do (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I); Gérard Duchêne (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I)
    Abstract: The determinants of self-employment are widely studied in the economic literature in recent twenty years. However, in the case of Vietnam where self-employed population takes an important proportion in workforce, it remains an under researched area. By using the data from the Vietnam Household Living Standard Survey 2004 (VHLSS2004), this paper aims to provide clearer insights into this area. We use the Heckman method to determine the level and identify the factors that affect the workers' choice between self-employment and wage employment in Vietnam. We emphasize the role of expected earnings differential in workers' decision making. Comparisons between female and male workers are made. Our empirical results show that there exist a number of determinants that permit to construct the pattern of self-employed as well a salary workers in Vietnam. Regardless of educational attainment, experiences and familial background, perspective of having higher earnings plays an important role in choice behavior of workers.
    Keywords: Occupational choice, earnings, self-employment, entrepreneurship, informal sector, Vietnam.
    Date: 2007–12

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