nep-sea New Economics Papers
on South East Asia
Issue of 2009‒02‒14
eleven papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Recovery and Beyond: Enhancing Competitiveness to Realise Indonesia's Trade Potential By Margit Molnar; Molly Lesher
  2. China's Impact on Foreign Trade and Investment in other Asian Countries By Prema-chandra Athukorala
  3. A conjoint analysis of farmer preferences for community forestry contracts in the Sumber Jaya watershed, Indonesia. By Arifin, B.; Swallow, B.; Suyanto; Coe, R.
  4. The Effect of Infrastructure Access and Quality on Non-Farm Enterprises in Rural Indonesia By John Gibson; Susan Olivia
  5. Identifying good inflation forecaster By Duasa, Jarita; Ahmad, Nursilah
  6. Herd behaviour in Malaysian capital market: An empirical analysis By Duasa, Jarita; Kassim, Salina
  7. Panel data analysis of “Export-led” Growth Hypothesis in BIMP-EAGA Countries By pazim, Khairul Hanim
  8. Pemekaran Daerah di Papua: Kesejahteraan Masyarakat vs. Kepentingan Elit By Aloysius Gunadi, Brata
  9. Vocational Schooling, Labor Market Outcomes, and College Entry By Chen, Dandan
  10. A Holistic Approach to University Curriculum: Universiti Malaysia Sabah By Mansur, Kasim; Jubok, Zainodin
  11. Perception towards the Importance of Education among Muslim Women in Papar, Sabah (Malaysia) By Mansur, Kasim; Abd. Rahim, Dayangku Aslinah; Lim, Beatrice; Mahmud, Roslinah

  1. By: Margit Molnar; Molly Lesher
    Abstract: As Indonesia recovered from the 1997-98 Asian Financial Crisis, the economy underwent significant political and structural changes, and the role of trade policy evolved. It is clear that there is much scope for trade to enhance economic growth. However, there remain significant challenges in realising this potential, including the need to improve external competitiveness. This paper analyses Indonesian trade policy following the crisis, and identifies some key reforms that may help to increase competitiveness. In view of the evolving domestic and global environment, a comprehensive policy approach will be required involving trade policy reform moving in tandem with reforms in other policy areas. Suggested reforms include, among others, complementing applied tariff cuts with reductions in non-tariff barriers and bound tariffs, reducing trade costs by easing behind-the-border regulations, and further improving the investment climate.
    Keywords: productivity, Asian crisis, micro data, competitiveness, FDI, textiles, spillovers, Indonesia, backward linkage, forward linkage, horizontal linkages, comparative advantage
    Date: 2008–12–22
  2. By: Prema-chandra Athukorala
    Abstract: This paper examines how China’s emergence as a major player in the global economy is affecting export performance of and FDI flows to its East Asian neighbours against the backdrop of the ongoing process of global production sharing. The findings indicate that the ‘China threat’ has been vastly exaggerated in the contemporary policy debate. China’s rapid market penetration in traditional labour intensive manufactured goods has occurred mostly at the expense of the high-wage East Asian countries, without crowding out export opportunities of low-wage countries in the region. More importantly, China’s emergence as a major assembly centre within global production networks has created new opportunities for the other East Asian countries to engage in various segments of the production chian in line with their comparative advantage in international production. FDI flows to the other Asian countries seem to be stimulated, rather than crowded out by FDI flows to China.
    Keywords: China, East Asia, exports, global production sharing
    JEL: F14 F23 O53
    Date: 2009
  3. By: Arifin, B.; Swallow, B.; Suyanto; Coe, R.
    Date: 2008
  4. By: John Gibson (University of Waikato); Susan Olivia (University of California, Davis)
    Abstract: There is growing interest in the rural non-farm sector in developing countries as a contributor to economic growth, employment generation, livelihood diversification and poverty reduction. Access to infrastructure is identified in some studies as a factor that affects non-farm rural employment and income but less attention has been paid to the constraints imposed by poor quality infrastructure. In this paper we use data from 4000 households in rural Indonesia to show that the quality of two key types of infrastructure – roads and electricity – affects both employment in and income from non-farm enterprises. It appears that there would be gains from development strategies that improve both the access to and the quality of rural infrastructure.
    Keywords: infrastructure; non-farm rural economy; Indonesia
    JEL: H54 O17
    Date: 2008–12–31
  5. By: Duasa, Jarita; Ahmad, Nursilah
    Abstract: The objective of this paper is to identify the best indicator variable in forecasting inflation in Malaysia. Due to the fact that Malaysia experienced the rise of CPI by 4.8 percent in March 2006, the country’s highest inflation rate in seven years, there is a need to foresee future trend of general price level. To determine whether certain indicator (variable) could predict inflation, we construct a simple forecasting model that incorporates the variable. We estimate a two-variable VECM model of quasi-tradable inflation using monthly data covering the period 1980:01 to 2006:12. We alternate between the following inflation indicators: commodity prices, financial indicators and economic activities. We evaluate each model using out-of-sample forecast. The study proposes that a simple model using industrial production index improves the accuracy of inflation forecasts. The results support our hypothesis.
    Keywords: Goods inflation; VECM ; Malaysian economy.
    JEL: C50 E31 C22
    Date: 2008
  6. By: Duasa, Jarita; Kassim, Salina
    Abstract: This study examines the existence of herd behavior among foreign investors in the Malaysian capital market. In methodology, the study analyzes the herd behavior by estimating vector error correction (VECM) model of FPI inflows as well as FPI outflows from/to major investors such as the United States, United Kingdom, Singapore and Hong Kong using quarterly data covering the period of Q1:1991 to Q3:2007. Additionally, we adopt an innovation accounting by simulating variance decompositions (VDC) and impulse response functions (IRF) for further inferences. The findings support the belief that there is a strong herd instinct prevailing among foreign investors in the Malaysian capital market.
    Keywords: Foreign portfolio investment; herd behavior; VECM; Impulse Response Function; Variance Decomposition
    JEL: C32 C12 G15
    Date: 2008
  7. By: pazim, Khairul Hanim
    Abstract: This paper uses panel data analysis to test the validity of the “export-led hypothesis” in three BIMP-EAGA countries (i.e. Indonesia, Malaysia, and the Philippines) by using panel data analysis. One-way random effects model leads to a conclusion that, there is no significant relationship between the size of national income and the amount of export for these countries. On the other hand, panel unit root tests imply that there is strong evidence of stationary process for both GDP and EX at the first differences. However, the panel co-integration test indicates there is no co-integrating relationship between export and development for these countries. As a conclusion, the export could be not seen as the “engine” of growth in these BIMP-EAGA. In other word, the empirical findings did not provide sufficient evident to support the “export-led hypothesis” in the area.
    Keywords: Export-led Growth hypothesis; BIMP-EAGA
    JEL: F10
    Date: 2009–02–09
  8. By: Aloysius Gunadi, Brata
    Abstract: Number of regions in Papua have increased significantly as a result of the creation of new sub-national administration or pemekaran. There were 36 regions (kabupaten/kota) in this island; meanwhile in 1996 there were only 13 regions. There are several controversies regarding to pemekaran in Papua. The aim of this article is to discuss two main issues: social welfare of Papuans and actors behind pemekaran. For this purposes, this article mainly used secondary data that collected from various sources such as the Indonesia Human Development Report.
    Keywords: pemekaran; social welfare; elite’s interest; Papua.
    JEL: O1 H70 R11
    Date: 2008
  9. By: Chen, Dandan (The World Bank)
    Abstract: This paper examines the differentiated outcomes of vocational and general secondary academic education, particularly in terms of employment opportunities, labor market earnings, and access to tertiary education in Indonesia. With data from a panel of two waves of the Indonesia Family Life Survey in 1997 and 2000, the paper tracks a cohort of high school students in 1997 to examine their schooling and employment status in 2000. The findings demonstrate that: (1) attendance at vocational secondary schools results in neither market advantage nor disadvantage in terms of employment opportunities and/or earnings premium; (2) attendance at vocational schools leads to significantly lower academic achievement as measured by national test scores; and (3) There is no stigma attached to attendance at vocational schools that results in a disadvantage in access to tertiary education; rather, it is the lower academic achievement associated with attendance at vocational school that lowers the likelihood of entering college. The empirical approach of this paper addresses two limitations of the existing literature in this area. First, it takes into account the observation censoring issue due to college entry when evaluating labor market outcomes of secondary school graduates. Second, using an instrumental variable approach, the paper also treats endogeneity of household choice of vocational versus academic track of secondary education, teasing out the net effect of secondary school choice on labor market and schooling outcomes.
    Keywords: academic achievement; academic attainment; academic content; academic education; academic schools; access to higher education; access to tertiary education; catholic schools; classroom; classroom time
    Date: 2009–01–01
  10. By: Mansur, Kasim; Jubok, Zainodin
    Abstract: In this era of globalisation, most university curriculum requires new sets of settings and arrangements. Universiti Malaysia Sabah (UMS) is no exception. Multi-disciplinary, academic degree-granting programme in UMS have been designed for students and faculties as the basis in ensuring a harmonious existence within and outside the campus. Most of the curriculum in UMS is designed to promote the understanding of universal values and traditions consistent with the quest for global peace and human solidarity. UMS not only provides knowledge, practical experience and skills for scholars and practitioners involved in conflict resolution but also play its role as a peace builder; giving humanitarian and economic assistance. To bring about peace and harmony amongst students of diverse religious and cultural backgrounds, UMS has two components: one is the orientation-training programme for all the new students and the other is the year–round practical training, character building and curriculum development programmes. This paper examines how the forces of globalisation have transformed its curriculum and raised new challenges to our existing institutions in promoting peace and intercultural harmony among students and staff alike.
    Keywords: Curriculum; Harmony; University; Peace; Malaysia
    JEL: I20
    Date: 2009–02–09
  11. By: Mansur, Kasim; Abd. Rahim, Dayangku Aslinah; Lim, Beatrice; Mahmud, Roslinah
    Abstract: Malaysian women have continued to play an increasingly important role in the national development of the country including greater participation in the economy and labor market. These improvements were made possible by the increasing numbers of females having access to education. Education provides better work opportunities and thus increases the level of income of an individual. Therefore education is perceived to be an important factor in human capital formation. In Islam, every Muslim is required to acquire knowledge as much as possible. Knowledge generates wealth. Thus, Islam condemns idleness, inactivity and poverty are condemned. A Muslim should be actively involved in the pursuit of increasing their knowledge and skill to ensure that their life is not of mere subsistence. This paper will look at the perception towards the importance of education among Muslim women. A total of 189 respondents were interviewed from selected kampongs in the district of Papar, Sabah. The data collected was analyzed and reported using descriptive statistics. About 42.4 percent respondents have obtained a diploma and degree level education. From the study, it is found that 78 percent of the total respondents perceived that education is very important. A total of 47.1 percent strongly agreed that education can influence future income. Essentially, a total of 78.8 per cent agreed that higher level of education leads to a higher level of income.
    Keywords: Education; Women; Sabah
    JEL: O18 I20
    Date: 2009–02–09

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