nep-sea New Economics Papers
on South East Asia
Issue of 2009‒10‒31
eight papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Drug Regulation and Incentives for Innovation: The Case of ASEAN By Sauwakon Ratanawijitrasin
  2. Managing the Impossible Trinity: The Case of Malaysia By Goh, Soo Khoon
  3. Quantifying the Impact of Chikungunya and Dengue on Tourism Revenues By Dileep V. Mavalankar; Tapasvi I. Puwar; Tiina M. Murtola; S.S. Vasan
  4. Obstacle problem for Arithmetic Asian options By Laura Monti; Andrea Pascucci
  5. Is Productivity Linked To Wages? An Empirical Investigation in Malaysia By Goh, Soo Khoon
  6. China and the Reserve Currency Question By RYAN, JOHN
  7. A Preliminary Estimate of Immediate Cost of Chikungunya and Dengue to Gujarat, India By Dileep V. Mavalankar; Tapasvi I. Puwar; Dipti Govil; Tiina M. Murtola; S.S. Vasan
  8. Meninjau Ulang Diskursus Teologi Islam dalam Dunia Modern By Hardiansyah, Suteja

  1. By: Sauwakon Ratanawijitrasin
    Abstract: The focus of this paper is to examine the ways in which regulatory framework affect the pharmaeutical innovations in developing countries using member countries of the Association of South-east Asian Nations (ASEAN) as case study. The paper employs a wide angle view of drug regulation in the region whose members possess varying levels of research and development capacities, supplemented by a zoomed view using data from Thailand where more detailed data are available to author. Data collection relied mainly on review of documents from various sources. Interviews and personal communication were carried out for added information and deeper understanding.
    Keywords: data collection, pahrmaceutical innovations, developing countries, thailand, interviews, personal communications, risk management, drug regulation, research, ASEAN, south east, asia, nations,
    Date: 2009
  2. By: Goh, Soo Khoon
    Abstract: This paper discusses how Malaysia manages the impossible trinity, the conjecture that a country cannot simultaneously maintain an open capital account, an exchange rate stability and monetary policy independence. Only two out of these three goals can be mutually consistent and policy makers have to decide which third goal to give up. The paper shows how Malaysia adopts an intermediate regime -- a regime that enables policy makers to manage all the three goals simultaneously. The impact of the global financial crisis on the Malaysian economy and the policy options for Malaysia to deal with the recent huge capital outflows are discussed in this paper. The willingness by Bank Negara Malaysia to allow a certain extent of exchange rate adjustments in the face of current global crisis reflects that Malaysia is not exempted from the impossible trinity
    Keywords: Impossible Trinity; Malaysia; Global Financial Crisis
    JEL: F41
    Date: 2009–08–07
  3. By: Dileep V. Mavalankar; Tapasvi I. Puwar; Tiina M. Murtola; S.S. Vasan
    Abstract: Background Health economists have traditionally quantified the burden of vector-borne diseases (such as chikungunya and dengue) as the sum of the cost of illness and the cost of intervention programmes. The objective of this paper is to predict the order of magnitude of possible reduction in tourism revenues if a major epidemic of chikungunya or dengue were to discourage visits by international tourists, and to prove that even a conservative estimate can be comparable to or even greater than the cost of illness and intervention programmes combined, and therefore should not be ignored in the estimation of the overall burden. Methods We have chosen three Asian economies where the immediate costs of these diseases have been recently calculated: Gujarat (an economically important state of India), Malaysia, and Thailand. Only international tourists from non-endemic countries have been considered to be discouraged, and a 4% annual decline in their numbers has been assumed. Revenues from these tourists have been calculated assuming that tourists from non-endemic countries would spend, on average, the same amount as all international tourists. These assumptions are conservative and consistent with the recent experience of Mauritius and Réunion islands. Non-Resident Indians (NRIs) have been considered half as likely to avoid travel to Gujarat compared to non-Indians. This paper reports inflation-adjusted expenditure figures as 2008 US$, assuming recent market exchange rates of 42.0 INR/US$, 3.22 MYR/US$, 0.68 EUR/US$, and 33.6 THB/US$. Findings A 4% decline in tourists from non-endemic countries would result in a substantial loss of tourism revenues . at least US$ 8 million for Gujarat, US$ 65 million for Malaysia, and US$ 363 million for Thailand. The estimated immediate annual cost of chikungunya and dengue to these economies is US$ 90 million, US$ 133 million, and approximately US$ 127 million respectively, indicating that impact on tourism revenues should not be ignored when calculating the burden of infectious diseases. The impact on Gujarat is relatively less because its share of world tourism receipts is just 0.04%, whereas Malaysia and Thailand have healthy shares of 1.64% and 1.82% respectively. A 4% decline in tourists to Gujarat from other Indian states would amount to US$ 9.6 million loss in domestic tourism revenues to Gujarat. Interpretation This paper shows that potential loss of tourism revenues due to a severe epidemic outbreak could be substantial. In some cases, ignoring this component could seriously underestimate cost-benefit results, forestalling promising interventions that could benefit the society as a whole or leading to inadequate investment of resources in prevention and public-funded control programmes. This would be to the detriment of especially poorer sections of the society, who may not be able to afford treatment costs. At present data are insufficient for us to make more than a preliminary estimate of the magnitude of the potential loss of revenues from tourism due to a major outbreak of chikungunya or dengue.
    Date: 2009–02–10
  4. By: Laura Monti; Andrea Pascucci
    Abstract: We prove existence, regularity and a Feynman-Ka\v{c} representation formula of the strong solution to the free boundary problem arising in the financial problem of the pricing of the American Asian option with arithmetic average.
    Date: 2009–10
  5. By: Goh, Soo Khoon
    Abstract: This study investigates the relationship between real wages, labor productivity and unemployment in Malaysia at the macroeconomic level, using time-series econometric techniques. The study found a long-term equilibrium relationship between labor productivity and real wages, but that unemployment was apparently unconnected to the system. The results suggested that labor productivity is positively related to real wage in the long run. However, the increase in real wage exceeds the increase in labor productivity causing an increase in unit labor cost. In addition, the study found a positive causal flow from productivity to wages in the short-run supporting the marginal productivity theory.
    Keywords: real wages; productivity; Malaysia
    JEL: J30
    Date: 2009–08
  6. By: RYAN, JOHN
    Abstract: China’s concern about its U.S. Dollar reserves is being amplified by the low returns of some of China’ investments in the U.S. which leads to a broader concern about how the current reserve system basically entails China lending to the U.S. at very low interest rates. A two-currency reserve system would potentially be even more unstable than the existing one, because of speculation moves in and out of the U.S. Dollar and the Euro depending on their return, increasing volatility. U.S. Policymakers have started to realize that large external deficits, the dominance of the dollar, and the large capital inflows that necessarily accompany deficits and currency dominance are no longer in the U.S. national interest. The U.S. has to consider initiatives put forward over the past year by China and others to begin a serious discussion of reforming the international monetary system. This chapter will examine four scenarios regarding the global currency regime of the future and the Chinese influence in this most important policy arena. It will focus on the U.S. Dollar decline as the Reserve Currency, on the Euro gaining strength slowly in a turbulent world, on the potential of the Renminbi to become a Reserve Currency, and on the future of the Super-Sovereign Reserve Currency, the IMF’s Special Drawing Rights (SDRs). Before that it will examine the role of the Renminbi in the Asian Financial Crisis in 1997 and its role in the global financial markets at that time and lessons learnt from the crisis. The crisis had significant macro-level effects, including sharp reductions in values of currencies, stock markets, and other asset prices of several Asian countries.
    JEL: E42 E58 F02 E44 A10 E40 F31 E41
    Date: 2009–10–26
  7. By: Dileep V. Mavalankar; Tapasvi I. Puwar; Dipti Govil; Tiina M. Murtola; S.S. Vasan
    Abstract: Background In this working paper, a preliminary estimate of the immediate cost of chikungunya and dengue to the Indian state of Gujarat has been estimated by combining nine earlier studies on major cost factors such as costs of illness and control, and thus building a more comprehensive picture of the immediate cost of these Aedes mosquito-borne diseases to Gujarat. Methods Costs of illness and vector control comprise the immediate cost of chikungunya and dengue. In this working paper, cost of illness has been calculated using the RUHA matrix approach. Using the shares of reported (R) and unreported (U) hospitalised (H) and ambulatory (A) cases of chikungunya and dengue, a RUHA matrix has been constructed for the state of Gujarat. Cost of illness has been estimated by combining this matrix with ambulatory and hospitalisation costs per case and the number of reported cases. For this study, chikungunya and dengue were assumed to be identical from the point of view of disease control and management. Vector control cost includes state and municipal expenditure to prevent/control these diseases, a conservative fraction of the household insecticides market, and private sector cost. Comparisons with Asian countries have been used to estimate a parameter if direct data is unavailable. Monte-Carlo sensitivity analysis was carried out to find out how uncertainties in each cost parameter affected the total cost of chikungunya and dengue. Findings Using Monte-Carlo sensitivity analysis, the immediate cost of chikungunya and dengue to Gujarat has been estimated to be 3.7 (range 1.6-9.0) billion rupees per annum. This is a preliminary estimate; research is in progress to refine key parameters from the Monte-Carlo analysis such as ambulatory cost per case and reporting rate. The emotional and long-term burden of illness and deaths due to these diseases including impact on tourism, education, economic growth, per capita income, FDI, etc. are beyond the scope of this study. Extrapolating from Gujarat to the whole of India (after adjusting for the relative number of cases in each state and differences in state GSDP per capita), the immediate cost of chikungunya and dengue to the whole of India is approximately INR 61 billion (range INR 26-148 billion). Interpretation The annual cost of INR 3.7 billion (range INR 1.6-9.0 billion) translates to approximately INR 66 per capita (range INR 29-159), or US$ 1.6 (range US$ 0.7-3.8) per capita using an exchange rate 42 INR/US$. Comparable cost of dengue is US$ 5.3 in Malaysia and US$ 6.2 in Panama, while Brazil spends US$ 4.3 per capita on dengue prevention alone. The differences in these costs can be partially be explained by roughly five times higher GDP per capita in Malaysia, Panama and Brazil than in Gujarat. However, higher incidence of chikungunya increases the relative cost in Gujarat. As policy makers weigh investments in new technologies and expanded use of existing interventions to control neglected tropical diseases, the economic cost of illness is a major input into decision making. It is hoped that this preliminary estimate will trigger more refined studies on cost of illness as well as cost-effectiveness of vaccines and other interventions to combat these neglected tropical diseases
    Date: 2009–01–27
  8. By: Hardiansyah, Suteja
    Abstract: The question whether Islamic theology relevant in the modern world when faced with challenges of the various problems and/or modern crises, i.e. the ecological crisis, economy, progressivity of science, discourse of faith and reason, was forget one thing: the discourse naturalization. This paper will be deconstructed Islamic theological discourse in the modern world. The conclusion of this paper is when the problem discourse naturalization untouched, Islamic theology efforts will be useless and ignore the actual problem (attached paper is in Indonesian).
    Keywords: discourse; discourse naturalization; hegemony; historical; theology; capital economy
    JEL: Z12 Z0 Z13 Y80
    Date: 2009–05–11

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