nep-sea New Economics Papers
on South East Asia
Issue of 2008‒08‒31
ten papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Obstacles To Implementing Lessons from the 1997-1998 East Asian Crises By Jomo Kwame Sundaram
  2. Indonesia's Changing Economic Geography By Hal Hill; RBudy Resosudarmo; Yogi Vidyattama
  3. China's integration into global production networks and its implications for export-led growth strategy in other countries in the region By Prema-Chandra Athukorala
  4. Cooperation in Global Governance among East Asia, North America, and Europe: A European Perspective By Kaiser, Karl
  5. The Soeharto Era: From Beginning to End By Ross H Mcledo
  6. Dynamics and Regulation of the Asian Pharmaceutical Industry: A Critical Review By Scherer, F. M.
  7. A CGE Analysis of the Economic Impact of Output-Specific Carbon Tax on the Malaysian Economy By Jaafar , Abdul Hamid; Al-Amin, Abul Quasem; Siwar, Chamhuri
  8. The financial storms in Vietnam’s transition economy: A reasoning on the 1991-2008 period By André Farber; Nguyen Huu Tu; Tran Tri Dung; Quan-Hoang Vuong
  9. Big Business Owners in Politics By Pramuan Bunkanwanicha; Yupana Wiwattanakantang
  10. Including Corporate Social Responsibility, Environmental Sustainaibility, and Ethics in Calibrating MBA Job Preferences By Montgomery, David B.; Ramus, Catherine

  1. By: Jomo Kwame Sundaram
    Abstract: Various different and sometimes contradictory lessons have been drawn from the 1997-1998 East Asian crisis experiences. The ideological implications and political differences involved have complicated the possibility of drawing shared lessons from the crises. The seeming calm and increased growth in most developing countries in the period since 2001 have also undermined the possibility of far-reaching developmental reforms following the experience. Perhaps most importantly, the vested interests supporting existing international financial governance arrangements continue to impede the possibility of implementing lessons drawn from the experience. Such interests are generally supported by conventional wisdom and reinforced by the financial media.
    Keywords: Asian crises, currency crises
    JEL: F32 F34 F53
    Date: 2008–08
  2. By: Hal Hill; RBudy Resosudarmo; Yogi Vidyattama
    Abstract: Indonesia is the world's largest archipelagic state, and one of the most spatially diverse nations on earth in its resource endowments, population settlements, location of economic activity, ecology and ethnicity. The regional socio-economic data base now extends over 30 years, and so it is possible to draw conclusions about the country's regional development dynamics since the 1970s. In this paper, we examine economic growth, inequality, convergence, structural change and social indicators for a consolidated group of 26 provinces, ie, the 27 of the late Soeharto period excluding East Timor. Our major conclusions include the following: (a) There continues to be great diversity in economic and social outcomes, but growth and social progress have been remarkably even. The poorest regions, mainly located in Eastern Indonesia, have generally performed about as well as the national average. (b) The better performing regions are typically those that are the most 'connected' to the global economy. In this respect, Jakarta stands out as a special case, growing richer than the rest of the country over time. (c) As expected, conflict is particularly harmful to economic development, as illustrated in the case of Maluku and to a lesser extent Aceh. (d) There is no clear natural resource story, in that the performance of the resource-rich provinces has varied considerably.
    Date: 2008
  3. By: Prema-Chandra Athukorala
    Abstract: TThis paper examines the implications of China's rapid integration into global production networks for export performance of countries in Southeast Asia. In a clear departure from the conventional practice, the trade flow analysis of the paper is based on a careful disaggregation of reported trade data into components and final goods, with a view to delineating supply-side complementarities arising from cross-border production fragmentation. There is clear evidence that network-related trade in components has strengthened Southeast Asia's trade links with China, opening up new opportunities for the expansion of component production/assembly writhing vertically integrated global industries. However, these trade links with China have not lessoned the dependence of growth dynamism of these countries on the global economy; the dynamism of regional cross-border production networks depends inexorably on China's trade in final goods with North America and the European Union.
    Keywords: China, Southeast Asia, production fragmentation, global production networks
    JEL: F14 F23 O53
    Date: 2008
  4. By: Kaiser, Karl (Harvard U)
    Abstract: A functioning and encompassing system of global governance has remained humanity's unfulfilled goal, although such governance already works to a degree in certain sectors. At the same time, a multitude of forces oriented toward that goal are caught in a never-ending process of progress and setbacks. Regionalism is one of the developments that have contributed to better governance in restricted geographical areas, and in doing so-for example, by advancing peace in a region-it has improved the chances for better global governance. Similarly, cooperation among regions can potentially contribute to global governance. The cooperation between North America and Europe was a decisive factor in the international politics of the second half of the last century and significantly affected global governance. Given the rise of Asia in recent decades, its increasing weight in world politics, as well as its growing regionalism and successful cooperation with North America and Europe, the question arises as to how these developments have affected the prospects for and evolution of global governance. Starting from the assumption that successful regionalism and cooperation among regions contribute to global governance, the paper examines regionalism within and cooperation among East Asia, North America, and Europe as well as their respective problems in improving governance.
    Date: 2008–01
  5. By: Ross H Mcledo
    Abstract: The paper develops a simple model of the Soeharto 'franchise', in which the coercive power of government was deployed in the interests of the president, his family, his business cronies and key officials within the franchise. The franchise prospered by generating rents that could be harvested by, and shared with, insider firms, and by extorting payments from outsider firms and individuals. In this model the franchise inevitably collapses in the long run for various reasons: the level of 'private taxation' from which it prospers eventually becomes intolerable; rents are diluted as franchise membership is expanded to buy off opposition; insider firms grow so rapidly that they run into financial and management bottlenecks; internal discipline declines as members compete for larger shares of the rents. The float of the Thai baht in 1997 merely provided the trigger for this inevitable collapse, while Soeharto's failing health helped to accelerate it.
    Keywords: franchise, Asian crisis, Indonesia, rents, private taxation, bureaucratic extortion
    JEL: O53 P16 P17 D72 D73
    Date: 2008
  6. By: Scherer, F. M. (Harvard U)
    Abstract: This paper provides an overview on 18 papers presented at a Stanford University conference on the Asian pharmaceutical industries. It begins by putting the contributions and growth of individual national industries in quantitative perspective. Several substantive issues are then addressed: (1) the distortions introduced by the system prevalent in many Asian nations for physicians to secure much of their compensation through the profits from drugs they directly dispense: (2) the effects of government price controls, which among other things encourage emphasis on proliferating minor improvements to existing drugs; (3) the fragmentation of manufacturing industry structure, which leaves too many firms lacking the economies of scale required inter alia to sustain high levels of quality control and which makes regulatory monitoring difficult; (4) the implications of World Trade Organization rules requiring nations to begin issuing pharmaceutical product patents where previously their industries could free-ride on the technological advances of industrialized nations; and (5) whether more Asian pharmaceutical firms can overcome the hurdles to becoming significant technological innovators.
    Date: 2008–04
  7. By: Jaafar , Abdul Hamid; Al-Amin, Abul Quasem; Siwar, Chamhuri
    Abstract: Environmental pollution is an emerging issue in many developing countries and its mitigation is increasingly being integrated into national development policies. One approach to mitigate the problem is by implement pollution control policies in the form of pollution tax or clean technology incentives. Empirical studies for developed countries reveal that imposition of an carbon tax would decrease CO2 emissions significantly and do not dramatically reduce economic growth. However, the same result may not apply for small-open developing countries such as Malaysia. The objective of this study is to quantify the impact of pollution tax on the Malaysian economy under the backdrop of trade liberalization. To examine the economic impact and effectiveness of carbon tax, a single-country, static Computable General Equilibrium model for Malaysia is constructed. The model is extended to incorporate output-specific carbon tax elements. Three simulations were carried out using a Malaysian 2000 Social Accounting Matrix. The first simulation examines the impact of halving the baseline tariff and export duty while the second solely focused on the impact of output-specific carbon tax. The third simulation combines both former scenarios. The model results indicate that the Malaysian economy is not sensitive to further liberalization. The reason could be attributed to the fact that Malaysian export duty is already low. Additionally, simulation results also indicate that while imposition of carbon tax reduces carbon emission, it also results in lower GDP and trade.
    Keywords: Trade; Air Emission; Environmental General Equilibrium; Malaysian Economy
    JEL: F00 C68 F1
    Date: 2008–08–15
  8. By: André Farber (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels.); Nguyen Huu Tu (The Bureau of the Central Committee of the Communist Party of Vietnam); Tran Tri Dung (InvestVietnam Corp., Vietnam); Quan-Hoang Vuong (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels.)
    Abstract: This study focuses on those substantial changes that characterize the shift of Vietnam’s macroeconomic structures and evolution of micro-structural interaction over an important period of 1991-2008. The results show that these events are completely distinct in terms of (i) Economic nature; (ii) Scale and depth of changes; (iii) Start and end results; and, (iv) Requirement for macroeconomic decisions. The study rejected a suspicion of similarity between the contagion of the Asian financial crisis in 1997-98 and economic chaos in the first half of 2008 (starting from late 2007). The depth, economic settings of, and interconnection between macro choices and micro decisions have all grown up significantly, partly due to a much deeper level of integration of Vietnam into the world’s economy. On the one hand, this phenomenon gives rise to efficiency of macro level policies because the consideration of micro-structural factors within the framework has definitely become increasingly critical. On the other and, this is a unique opportunity for the macroeconomic mechanism of Vietnam to improve vastly, given the context in which the national economy entered an everchanging period under pressures of globalization and re-integration. The authors hope to also open up paths for further empirical verifications and to stress on the fact that macro policies will have, from now on, to be decided in line with changing micro-settings, which specify a market economy and decide the degree of success of any macroeconomic choices.
    Keywords: Financial system; inflation; economic growth; interest rate; exchange rate; FDI; FPI; banking sector; stock markets; monetary and fiscal policy; Vietnam.
    JEL: G10 G18 E22 E31 E44
    Date: 2008–08
  9. By: Pramuan Bunkanwanicha; Yupana Wiwattanakantang
    Abstract: This paper investigates a little studied but common mechanism that firms use to obtain state favors: business owners themselves seeking election to top office. Using Thailand as a research setting, we find that the more business owners rely on government concessions or the wealthier they are, the more likely they are to run for top office. Once in power, the market valuation of their firms increases dramatically. Surprisingly, the political power does not influence the financing strategies of their firms. Instead, business owners in top office use their policy-decision powers to implement regulations and public policies favorable to their firms. Such policies hinder not only domestic competitors but also foreign investors. As a result, these politically connected firms are able to capture more market share.
    Date: 2008–08
  10. By: Montgomery, David B. (Stanford U and Singapore Management U); Ramus, Catherine (U of California, Santa Barbara)
    Abstract: Our research studies 759 MBA’s graduating from eleven business schools to gain insight into what MBA’s in the 21st Century care about during their job searches. We update the MBA job preference literature by using adaptive conjoint analysis to calibrate the relative importance of a wide variety of job factors combining factors found in previous research in disparate fields (general management, applied psychology, corporate social performance, ethics, and marketing). Our results show the relative importance of organizational reputation related to caring for employees, ethical products and practices, and social and environmental responsibility, compared to factors like financial package, job challenge, etc. to 759 MBA’s graduating from eleven business schools – eight in North America and three in Europe. Study limitations and some mitigations of these are discussed.
    Date: 2007–12

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