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on South East Asia |
| By: | Athukorala, Prema-chandra (Asian Development Bank Institute); Kohpaiboon, Archanun (Asian Development Bank Institute) |
| Abstract: | This paper examines the export experience of East Asian economies in the aftermaths of the crisis against the backdrop of a systematic analysis of precrisis trade patterns. The analysis is motivated by the “decoupling” thesis, which was a popular theme in Asian policy circles in the lead-up to the onset of the recent financial crisis, and aims to probe three key issues: Was the East Asian trade integration story that underpinned the decoupling thesis simply a statistical artifact or the massive export contraction caused by an overreaction of traders to the global economic crisis and/or by the drying up of trade credit, which overpowered the cushion provided by intra-regional trade? What are the new policy challenges faced by the East Asian economies? Is there room for an integrated policy response that marks a clear departure from the precrisis policy stance favoring export-oriented growth? The findings serve to caution against a possible costly backlash against openness to foreign trade arising from the newfound enthusiasm for rebalancing growth (redressing the strong bias for exports in development policy), and make a strong case for a well-coordinated strategy to fight new protectionism, as part of a long-term commitment to nondiscriminatory multilateral and unilateral trade liberalization. |
| Keywords: | decoupling; intra-regional trade; growth rebalancing; asia |
| JEL: | F14 F15 O19 |
| Date: | 2009–12–11 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0177&r=sea |
| By: | Nambiar, Shankaran (Asian Development Bank Institute) |
| Abstract: | The economic crisis that began in the United States had an effect on the developed world, including the European Union, Japan, and Singapore. The downturn of the economy in the United States, coupled with developments in the European Union, Japan, and Singapore, has affected the Malaysian economy. This paper argues that Malaysia, being a small open economy with a strong export-dependent manufacturing sector, was particularly vulnerable to the global crisis. The very countries that generate the demand for Malaysian exports have been struck by the crisis, leading to declines in output in Malaysia. These declines have resulted in labor market shocks which have led to retrenchments. The severity of the crisis and its prolonged duration requires an approach that is not unduly dependent on export-led growth. This paper will suggest that Malaysia adopt a rebalancing strategy in response to the current crisis. |
| Keywords: | malaysia financial crisis; export and labor markets; rebalancing strategy |
| JEL: | E21 E60 F10 F40 |
| Date: | 2009–08–26 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0148&r=sea |
| By: | Kim, Soyoung (Asian Development Bank Institute); Yang, Doo Yong (Asian Development Bank Institute) |
| Abstract: | This paper analyzes the impact of United States (US) monetary shocks on the economies of selected East Asian countries using a structural vector autoregression model. We found that the impacts of the US monetary shocks on domestic interest rates and exchange rates contradict conventional wisdom. The conventional exchange rate channel is unlikely to play much role in the transmission of US monetary policy shocks to floating exchange rate regimes in East Asian countries, excluding Japan. In these countries, the domestic interest rate responds strongly to US interest rate changes, largely by authorities giving up monetary autonomy due to fear of floating. On the other hand, the domestic interest rate does not respond much to changes in US rates in the countries with a fixed exchange rate regime and capital account restrictions, such as the People's Republic of China and Malaysia. This may suggest that the countries with a fixed exchange rate regime enjoy a higher degree of monetary autonomy, probably with the help of capital account restrictions. |
| Keywords: | east asian rate regimes; floating vs. non-floating; international monetary transmission |
| JEL: | F32 F33 |
| Date: | 2009–12–18 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0181&r=sea |
| By: | Katada, Saori N. (Asian Development Bank Institute) |
| Abstract: | In the last decade, East Asia has engaged in constructing numerous mechanisms to enhance regional cooperation in the areas of trade and finance. However' the region's economic architecture exhibits certain idiosyncrasies such as an eclectic institutional structure and a limited level of commitment shown by its members. These idiosyncrasies seem to prevent regional cooperation from becoming deeper and more coherent. This paper focuses on the political factors that have thus far shaped the institutional form of East Asian regional trade and financial cooperation' particularly in the three essential aspects of regionalism derived from the theories of regional institution building. The first aspect is the level at which governments are willing to compromise sovereignty and political autonomy for the sake of regional cooperation. The second is the progress in creating mechanisms through which the “losers” and the “weak” within a country or region can be compensated. The third is the clear definition of which members can benefit from such mechanisms. These three elements are useful in furthering regional cooperation and institution building by removing resistance and obstacles that work against functional spillovers. <p>The paper argues that East Asia's economic institutions established through the cooperation efforts of the last ten years exhibit different qualities from those that have emerged in Europe' and thus fall far short of overcoming unexpected political tensions in the region. These deficiencies' however' contrast in two important fields of regional integration. In finance' the clearly defined member governments have difficulty compromising their respective national macroeconomic policy autonomy' while in the field of regional trade cooperation' the challenge is in redistributing the economic gains to those who stand to lose during the process of integration' or to the countries that have a long distance to catch up within a relatively well-defined group. |
| Keywords: | east asian regional integration; asia regional trade cooperation; asia institutional regional cooperation |
| JEL: | F59 |
| Date: | 2009–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0170&r=sea |
| By: | Jitsuchon, Somchai (Asian Development Bank Institute); Sussangkarn, Chalongphob (Asian Development Bank Institute) |
| Abstract: | This paper reviews Thailand's structural changes, the 1997 crisis experience, and recovery and lessons from the crisis. The paper then discusses the impacts of the subprime crisis on the Thai economy and the policy responses to date. The paper ends by discussing strategies to rebalance growth by reducing the dependence on exports as the main growth engine. <p>The recovery from the 1997 crisis left Thailand more dependent than ever on exports as the main engine of growth, with the ratio of exports to gross domestic product (GDP) increasing from a precrisis level of about 38% to about 65% recently. The lessons learned from the 1997 crisis led to a more risk-averse financial system, and this helped Thailand avoid the direct impacts of the subprime crisis. However, being highly dependent on exports, Thailand, along with other export oriented East Asian economies, is now heavily affected by the indirect impacts of the subprime crisis, especially in the export industries. Exports and GDP have dropped sharply over the past two quarters. <p>The government has been using fiscal stimulus and monetary easing measures to try to improve the economy. These measures are mostly short-term in nature, and if the subprime crisis is protracted, then the sustainability of the fiscal stimulus will be called into question. In the medium- to long-term, Thailand needs to move to a more balanced growth path, depending less on exports (although exports will still be important) and more on other, domestic sources of growth. The paper concludes by discussing a number of policy strategies that will contribute to a more balanced growth path. |
| Keywords: | thailand growth rebalancing; exports; trade statistics; financial crises |
| JEL: | E65 F14 F30 F40 O11 |
| Date: | 2009–10–06 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0154&r=sea |
| By: | Warr, Peter; Anshory Yusuf, Arief |
| Abstract: | This paper argues that recent increases in international food prices worsened poverty incidence in Indonesia, even though many poor farmers benefited. This conclusion is based on the application of a multi-sectoral, multi-household general equilibrium model of the Indonesian economy. The positive effect on the welfare of poor farmers was exceeded by the negative effect on poor consumers. Indonesiaâs ban on rice imports since 2004 complicates this account. The import ban shielded Indonesiaâs internal rice market from the temporary world price increases from 2007 to 2008, but did so at the expense of permanently increasing both rice prices and poverty incidence. |
| Keywords: | Indonesia, Food Prices, Poverty Incidence, General Equilibrium Modeling, International Development, D58, I32, F14, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare10:59259&r=sea |
| By: | Kawai, Masahiro (Asian Development Bank Institute) |
| Abstract: | The paper attempts to evaluate whether the international financial architecture is adequate for maintaining the financial stability of the East Asian economies by summarizing the lessons learned from the Asian financial crisis of 1997-1998 and the global financial crisis of 2007-2009 and reviewing the progress being made to enhance the effectiveness of the international financial architecture in crisis prevention, management and resolution. The paper finds that the international community had to experience the two crises before seriously starting to work on the reform of the international financial architecture. Facing the global financial crisis, the international community has responded by making the G20 Summit the premier forum for international economic and financial cooperation, creating a potentially more powerful Financial Stability Board, and augmenting the financial resources of the IMF. <p>The paper concludes, however, that the international financial architecture remains inadequate for the needs of many emerging market economies, including in East Asia. International Monetary Fund surveillance—particularly that of systemically important economies (such as the United States, the United Kingdom and the Euro Area)—is ineffective and its governance structure is heavily biased towards Europe and the United States. International liquidity support is insufficient in assisting countries with sound economic and financial management that are hit by externally driven crises. No international agreements exist on external (sovereign) debt restructuring, or on the cross-border resolution of insolvent, internationally active financial firms for fair burden sharing of losses between creditors and debtors, or among different national authorities. <p>The paper emphasizes the importance of a well-functioning regional financial architecture to complement and strengthen the global financial architecture. It offers advice for East Asian authorities to focus on: (i) the establishment of resilient national financial systems, including local-currency bond markets; (ii) integration of national financial markets to facilitate the mobilization of regional savings for regional investment (in infrastructure and small- and medium-sized enterprises); (iii) enhancement of regional liquidity (Chiang Mai Initiative Multilateralization) and economic surveillance mechanisms; and (iv) regional exchange rate policy coordination to achieve sustained economic growth without creating macroeconomic and financial instability. |
| Keywords: | asian financial crisis; global financial crisis; crisis prevention; management and resolution; the imf; the financial stability board; regional financial architecture |
| JEL: | F30 F32 F33 F34 F53 |
| Date: | 2009–11–24 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0167&r=sea |
| By: | Titiheruw, Ira S. (Asian Development Bank Institute); Atje, Raymond (Asian Development Bank Institute) |
| Abstract: | This paper describes the existing payment system in Indonesia, which is comprised of cash and non-cash payment systems. The non-cash payment system has evolved swiftly due to improvements in information technology and the resulting transition from a paper-based to a card-based system. With the development of e-money, it is already moving toward a paperless payment system. As the monetary authority in Indonesia, Bank Indonesia is responsible for regulating and safeguarding the smooth and efficient operation of the national payment system. In 2004, the bank revised the blueprint of the system, which was originally introduced in 1995 in anticipation of efficiency-related challenges and legal implications arising from economic and technological development. Although Bank Indonesia expects to be able to provide equitable access and offer consumer protection, potential benefits arising from technological advances to the payment system, such as access in remote areas, remains an issue for small- and medium-sized enterprises. This paper examines this issue closely, with an eye to making the payment system more inclusive. It also examines the impact of the recent global financial crisis on Indonesia's payment system. The authors found that the system has remained safe, secure, and reliable despite some minor liquidity problems experienced by small banks in the last quarter of 2008 as the effects of the global crisis began to penetrate the country's financial sector. |
| Keywords: | payment system indonesia; bank indonesia payment system; indonesia financial crisis |
| JEL: | E42 |
| Date: | 2009–08–31 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0149&r=sea |
| By: | Pomerleano, Michael (Asian Development Bank Institute) |
| Abstract: | The paper analyzes the risks in the banking systems in East Asia using the standard supervisory framework, which assesses capital adequacy, asset quality, management, earnings, and liquidity (CAMEL), and finds that banking systems in the region are sound, but that the short-term outlook is negative. Second, it reviews the measures introduced in Asian countries to support their banking systems. The main bank support measures—direct capital support, removal and guarantees of bad assets, direct liquidity support, and guarantees for banks' existing or newly issued obligations—might be necessary to ensure stability, but they need to be handled carefully to prevent long-term distortions. It remains to be seen whether Asian policymakers will manage skillfully the lifting of bank support measures. Third, the paper conducts stress tests of the banking systems. The stress tests indicate that the largest banking systems in East Asia have a total of almost US$1.2 trillion in Tier 1 capital and a possible shortfall of US$758 billion. Fourth, it assesses the implications for liquidity of the increase in international banking flows and finds that the banking system in the Republic of Korea appears vulnerable to a reversal of capital flows. Fifth, the paper explores the implications of the crisis for credit formation, assessing whether nonbank financial institutions in the region have the capacity to provide sufficient liquidity. The author concludes that they do not. The paper ends with a brief assessment of the impact of the crisis on the corporate sector, concluding that the effects of the crisis are likely to be significant but manageable. |
| Keywords: | east asian bank capital; global financial crisis; government bank support policies |
| JEL: | F37 G15 G20 |
| Date: | 2009–08–19 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0146&r=sea |
| By: | Gupta, Souvik (Asian Development Bank Institute); Miniane, Jacques (Asian Development Bank Institute) |
| Abstract: | With the global economy still in recession, two important questions arise for Asia: how soon will the recession end, and how vigorous will the region's recovery be? The purpose of this paper is to look at past recessions and recoveries in Asia in order to shed light on these issues. Several important stylized facts emerge from this study: (i) recessions accompanied by financial stress—notably, stress in domestic banking sectors—have been substantially longer and deeper than the norm, suggesting that the current recession could have been even costlier and more drawn out had Asia's banks not entered the downturn in such strong shape; (ii) recoveries in Asia have been weak because they were typically driven by a single engine: exports. In contrast, other emerging economies have tended to experience more vigorous recoveries because of a stronger contribution from domestic demand, notably investment; (iii) in Asia, deep recessions have resulted in substantial declines in potential output growth, meaning that their effects are not just cyclical but permanent. A clear lesson emerges from past experience: given the expected weak recovery in the eurozone and the United States, Asia should not count on exports to rebound strongly as it did in previous upturns. Rather, a fundamental rebalancing towards domestic demand is needed if Asia wants to preserve the high growth rates that have characterized its recent past. Finally, it remains to be seen whether potential output will fully recover from pre-crisis levels in the countries most affected by the crisis. |
| Keywords: | asian economic recession recovery; past recessions future recovery |
| JEL: | E32 E65 |
| Date: | 2009–09–02 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0150&r=sea |
| By: | Spiegel, Mark M. (Asian Development Bank Institute) |
| Abstract: | This paper examines the motivation for, and the success of, regional efforts in Asia to promote local currency bond markets. The analysis demonstrates that Asian local currency bond markets made substantial gains as a region going into the current global financial crisis. However, we argue that the current financial crisis requires a reassessment of the merits of promoting local currency bond markets and the gains that have been made to date. While most of the initial motivations for encouraging the development of domestic local currency bond markets appear to remain valid, there are some exceptions. However, the degree to which success in the development of these markets will be sustained remains unknown until global financial markets regain tranquility and official interventions into these markets are removed. |
| Keywords: | global rating agencies; local ratings agencies; local currency bond markets |
| JEL: | F36 G15 G20 G28 |
| Date: | 2009–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0182&r=sea |
| By: | Basir, Amir Akmar (Asian Development Bank Institute) |
| Abstract: | Payment systems in Malaysia have been undergoing changes in recent years. Among the notable changes is the emergence of electronic-based payment systems. The central bank has been playing an active role in shaping the development of payment systems, particularly in the gradual introduction of electronic-based payment schemes, in the belief that these have the potential to increase efficiency in the economy as whole. The active introduction of e-payment instruments has increased both the value and volume of transactions per capita use of e-payment instruments in recent years. Checks continue to be the major payment instrument, however. Small- and medium-sized enterprises could benefit tremendously from the use of e-payment schemes through more efficient business operations, cost reductions, enhanced security and wider payment channel choice. Noted improvements have also resulted from the introduction of large-value payment systems, such as the payment versus payment infrastructure for the settlement of Malaysian ringgit (RM)-United States (US) dollar (US$) foreign exchange trades and the delivery versus payment settlement for US dollar securities that are issued, deposited and traded in Malaysia. The development of the domestic payment system is becoming more important in the development of a deep and active domestic financial market that promotes financial market stability and the reinvestment of savings in the country. Closer financial market integration in the region and closer cooperation and policy coordination among the monetary authorities in the region is becoming increasingly important. Eight years after implementation in Malaysia, the e-payment schemes should be studied to assess any economic benefits they may have provided. |
| Keywords: | malaysian payment systems; information and communication technology; asian payment systems study |
| JEL: | D49 G28 L98 |
| Date: | 2009–09–16 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0151&r=sea |
| By: | Almeida, Rita K. |
| Abstract: | This paper examines whether the increased openness and technological innovation in East Asia have contributed to an increased demand for skills in the region. The author explores a unique firm level data set across eight countries in Asia and the Pacific region. The results strongly support the idea that greater openness and technological innovation have increased the demand for skills, especially in middle-income countries. In particular, while the presence in international markets has been skill enhancing for most middle-income countries, this is not the case for manufacturing firms operating in China and in low-income countries. The author interprets this to support the premise that if international integration in the region continues to intensify and technology continues to be skilled biased, policies aimed at mitigating the skills shortages should produce continual and persistent increase in skills. |
| Keywords: | Labor Markets,Labor Policies,E-Business,Emerging Markets,Technology Industry |
| Date: | 2010–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5272&r=sea |
| By: | Cramb, R.A; Ferraro, Deanna |
| Abstract: | The oil palm boom in Southeast Asia has increased demand for institutional arrangements facilitating large-scale plantation development on customary lands. A financial model of an oil palm plantation in Sarawak, Malaysia, is used to explore six project types, including managed smallholders, three different joint-venture arrangements, renting, and (for comparison) a private plantation on state land. Benefit-cost analysis is used as basis for project, private (shareholder), and stakeholder analyses. There is a trade-off between the efficiency and equity outcomes of the alternative arrangements. While joint venture projects provide higher aggregate net benefits, managed smallholder projects provide more benefits to landholders. When the actual performance of the alternative schemes is taken into account, the managed smallholder approach is superior on both efficiency and equity grounds. The joint venture approach could be improved by combining a fixed rent with a share of dividends to reduce the income risk faced by landholders. In all cases, improved management is needed for the schemes to achieve their developmental potential. |
| Keywords: | Malaysia, oil palm, plantation development, customary tenure, managed smallholders, joint ventures, benefit-cost analysis., International Development, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare10:59072&r=sea |
| By: | Rustam, Rizal |
| Abstract: | This research is intent to determining: (a) the effect of welfare distribution with applied import tariff of the government revenue, consumer expenditures, producer revenues, and efficiency losses (in production, in consumption and net effect), and (b) the level of competitiveness of cane sugar in Indonesia by calculating the Domestic Resource Cost (DRC). The research using libraries research method, that is collecting data from the related preceding researches and other references such as magazines, journals, bulletins and the like. The research result showed that : (a) the government revenue, change of consumer surplus, producer surplus, economic net loss in production and consumption and exchange gain economization, are influenced by the import tariff and elasticity price toward supply and demand, so that the welfare distribution value will be bigger; (b) sugar product competitiveness in Indonesia by knowing cane field calculation in East Java both wet and dry field is higher than the same product from other countries as it is shown by the value of DRC<1. |
| Keywords: | Sugar, Welfare Distribution, Domestic Resource Cost (DRC), and Import tariff, Agribusiness, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare10:59154&r=sea |
| By: | Ma, Alyson (Asian Development Bank Institute); Assche, Ari Van (Asian Development Bank Institute); Hong, Chang (Asian Development Bank Institute) |
| Abstract: | This paper unveils a systematic pattern in the People's Republic of China's (PRC) processing trade. In a cross-section of the PRC's provinces, the average distance traveled by processing imports (import distance) is negatively correlated with the average distance traveled by processing exports (export distance). To explain this pattern, we set up a three-country industry-equilibrium model in which heterogeneous firms from two advanced economies, East and West, sell their products in each other's markets. Each firm can use two modes to serve the foreign market. A firm can directly export its products from its home country. Alternatively, it can indirectly export to the foreign market by assembling its product in a third low-cost economy, PRC, which is located in the vicinity of East. Our model established two theoretical predictions relating the PRC's geographical location to its processing trade patterns. First, the PRC's processing exports are negatively affected by both an increase in import distance and an increase in export distance. Second, the PRC's processing exports to East Asian economies are more sensitive to export distance and less sensitive to import distance than its processing exports to non-Asian economies. We found empirical support for both predictions. |
| Keywords: | location trade costs prc; processing trade export platform prc; fdi prc |
| JEL: | F12 F14 F23 |
| Date: | 2009–12–10 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0175&r=sea |
| By: | Batten, Jonathan A. (Asian Development Bank Institute); Hogan, Warren P. (Asian Development Bank Institute); Szilagyi, Peter G. (Asian Development Bank Institute) |
| Abstract: | The domestic bond markets of the Asia and Pacific region have grown considerably since the Asian financial crisis of 1997, although they remain undeveloped relative to the region's weight in the world economy. This paper proposes that in order to encourage further development of these markets, regulators should make them more accessible to foreign borrowers. <p>To that end we offer insights into the nature and mechanics of foreign bond issuance by investigating the key characteristics of 3,132 foreign bonds issued in 14 countries (other than the United States) between July 1928 and June 2009. We found that the foreign borrowers that tap domestic markets are overwhelmingly of high credit quality and comprise sovereigns, supranationals, and major financial institutions. There is a preference for simple fixed-rate payment structures, which can then be swapped into the currency and coupon type of choice using currency and interest rate derivatives. On the whole, the long-term viability of foreign bond markets appears linked to the presence of highly liquid foreign exchange and derivatives markets that facilitate risk management and transformation, enabling regulation that facilitates cooperation with market participants, the presence of benchmark issues, and competitive pricing between alternate market segments. |
| Keywords: | bond markets; financial market development; foreign bonds |
| JEL: | F34 G18 O57 |
| Date: | 2009–12–08 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0173&r=sea |
| By: | Gutierrez, Catalina; Paci, Pierella; Park, Beom S. |
| Abstract: | In this paper the authors use a search and matching model of multi-sector labor markets, to understand the channels through which economic shocks affect labor market outcomes in developing countries. In the model workers can be employed in agriculture, formal or informal urban jobs, or unemployed. Economic shocks are manifested as either increased turbulence in the formal/informal sectors or a decrease in overall sectoral productivity. By calibrating the model to Indonesia and Mexico, the authors are able to understand how the 1998 Indonesian crisis and the 2001 Mexican recession translated into labor market outcomes. They then venture to simulate how the current financial crisis might affect the allocation of labor and earnings across sectors, in these countries. The results suggest that in both countries past crises have increased the degree of turbulence of the formal sector, increasing job destruction. However, while in Indonesia the crisis affected the overall formal sector productivity, this was not the case in Mexico. This explains the larger blow to formal wages -- relative to the size of the shock- witnessed by Indonesian workers. The response of the informal sector was also different: In both countries the informal sector was able to act as a buffer, as relative earnings increased. However, while in Mexico it became much harder to find informal sector opportunities and easier to keep the job once found; in Indonesia turbulence in the informal sector increased substantially increasing the job destruction rate of informal jobs andlimiting the cushioning role that the informal sector might have played. The agricultural sector was spared from the shock in both countries. In Indonesia, it actually benefited from an unusual exogenous increase in the price of rise. The simulations show that if either the informal or agricultural sectors are spared from the shocks, large reallocations of labor might occur, and the overall effect of the shock is smaller. Instead, if these sectors can’t buffer the shock, the reallocation of labor is much smaller, but earnings in the formal sector drop substantially. The authors also explore the impact of alternative policies. They find that in relatively flexible markets where informality can be seen more as a choice rather than as queuing, unemployment benefits and informal employment subsidies may have paradoxical effects, by discouraging formal search. Instead, policies targeted at creating informal employment and boosting formal TFP growth have the desired effects. |
| Keywords: | Labor Markets,Labor Policies,Markets and Market Access,Banks&Banking Reform,Economic Theory&Research |
| Date: | 2010–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5283&r=sea |
| By: | Morgan, Peter (Asian Development Bank Institute) |
| Abstract: | This paper reviews the effectiveness of unconventional monetary policies and their relevance for emerging markets. Such policies may be useful either when interbank rates fall to zero, or when a credit crunch or rise in risk premium impairs the normal transmission mechanism of monetary policy. Unconventional monetary policy measures encompass three broad categories: (i) commitment effect, i.e., verbal commitments to maintain very low interest rates for a certain period, either conditionally or unconditionally; (ii) quantitative easing, i.e., targeting the level of current account balances of the central bank; and (iii) qualitative or credit easing, which involves purchases of targeted assets to lower rates and/or increase liquidity in the target market. It also examines issues related to the exit strategy from unconventional policy, and assesses the applicability of unconventional policies for Asian economies other than Japan. <p>Most studies of the commitment effect (or duration effect) suggest that statements by a central bank regarding the duration of a policy of very low or zero interest rates also affect market expectations of interest rates, but the impact is mainly limited to shorter-term rates. The literature on the effects of quantitative easing monetary policy is less conclusive, especially when one accounts for other announcements by the central bank. Regarding qualitative easing (credit easing) policy, the effect of expanding outright purchases of government bonds on bond yields looks limited. However, other kinds of asset purchase interventions do seem to have been more successful in relieving market stresses. <p>For Asian countries aside from Japan, unconventional policies look most attractive as a way to relieve funding blockages in specific markets rather than to stimulate overall growth. Only India; Republic of Korea; Singapore; and Taipei,China adopted unconventional measures, and those of the middle two were chiefly related to their use of the Fed's swap line for United States dollars to ease dollar shortages in the region. However, if growth of United States consumption slows structurally, this may force Asian economies to rely more on unconventional monetary policy measures during future downturns. |
| Keywords: | unconventional monetary policy; monetary policy emerging markets |
| JEL: | E50 E52 E58 F41 F42 |
| Date: | 2009–11–11 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0163&r=sea |
| By: | Oktaviani, Rina; Rakjman Setyoko, Nur; Vanzetti, David |
| Abstract: | Following the global spike in food prices in 2008, there is renewed interest in Indonesia in self-sufficiency as a means of achieving food security. Restrictive trade policies, including specific tariffs on rice and sugar, and quantitative restrictions on imports and exports, have been used in an attempt to meet conflicting objectives of assisting both producers and consumers. Meanwhile, palm oil exports to the European Union are constrained by the importer's concerns about deforestation and its contribution to climate change. Similar constraints may be applied to other commodities as production moves into pristine areas in an attempt to maintain self-sufficiency. On the other hand, more open trade may offer better options to address any agricultural-related costs associated with climate change. A computable general equilibrium model is used to analyze the efficiency and distributional impacts of these agricultural trade policies. The results suggest that removing or reducing tariffs on rice and sugar would increase imports substantially in relative terms but have only a small impact on domestic prices and production. A ban on palm oil exports to the European Union would have a significant impact, although offset somewhat by increased exports elsewhere. In each case the major effects are distributional, involving transfers between producers and consumers. Multiple instruments are necessary to achieve conflicting objectives. For example, social safety nets rather than trade bans should be used to support poor consumers. Support for the agricultural sector should focus on the provision of rural infrastructure, research and development, and the encouragement of private sector investment. |
| Keywords: | agriculture, trade, Indonesia, International Relations/Trade, F13, Q17., |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare10:59109&r=sea |
| By: | Somporn Isvilanonda; Isriya Bunyasiri (Department of Agricultural and Resource Economics, Kasetsart University) |
| Abstract: | Agricultural development policy in Thailand over the past few decades has been geared not only to the nation’s food security, but also to export earnings. Thailand is a food surplus country at the macro level but food accessibility at the household level remains a problem, particularly in remote rural areas. The recent increase in food price and production cost has impacted on the rural poor. With a declining purchasing power, the poor households face the risk of food insecurity as they may reduce their intake of more nutritious food. The impact of rising food prices on agricultural households depends on whether they are net buyers of food commodities whose prices have increased. In rice farming households, the share of net buyer households was higher among households with smaller land holding. Also, the poor rice farmers in Thailand were severely affected by the higher production cost and input prices since the reduction in their net profits was larger. While nearly two-thirds of their operating cost was cash expense, they received only one-tenth from the rice sold. In order for the rural poor to cope with future impacts of high food price and rising production cost, a provision of off-farm employment and micro-credit with technical assistance and proper farm management plans should be targeted to small farmers and rural poor. In the longer-run, it is suggested that small-scale farmer capacity building and empowerment based on the sufficiency economy concept is necessary. This should be complemented by enhancing farm productivity through agricultural research and improvement in village-pool water resources including on-farm water resource management and investment. |
| Keywords: | Thailand, food security, agricultural policy, rural poor vulnerability, policy options |
| JEL: | O53 Q18 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:kau:wpaper:200901&r=sea |
| By: | Kramol, Prathanthip; Villano, Renato; Fleming, Euan; Kristiansen, Paul |
| Abstract: | "Clean and safe" agricultural products are an important issue among consumers, farmers and governments. Many developing countries develop their produce at various points along the âcleanâ continuum based on production practices related to use of synthetic chemicals. Organic farming is applied to technologies with no chemicals or synthetic fertilisers used during production or processing. It was initially developed by farmers and non-government organisations in Thailand, and subsequently implemented by the Thai government through a series of policies on clean produce to meet international standards. Safe-use and pesticide-free practices lie between organic and conventional practices, and are possible steps when converting conventional farms to organic farms. We compare the technical efficiencies and technology gaps of the four farming systems in northern Thailand of which three - organic, pesticide-free and safe-use - are designated âclean and safeâ. Farm-level data on vegetable production were collected from random samples of farms using these technologies. A metafrontier model was estimated, enabling the estimation of technical efficiencies and technology gap ratios (TGRs) for vegetable farms operating under the different production systems. Conventional farms were expected to have the highest mean TGR (smallest distance from the metafrontier) as they are least constrained in the way they farm, and results bear out this expectation. The mean TGR for conventional farms is 0.80, significantly higher than that for organic farms at 0.45. But all production systems have farms lying on the metafrontier. In contrast to the TGR results, conventional farms have the lowest mean technical efficiency relative to their group frontier (0.33) and pesticide-free vegetable farms the highest (0.47), most likely reflecting the different degrees of technical assistance provided to farmers in these groups. Organic farming is that farmers in this group did not perform markedly worse than farmers in other groups in terms of productivity. There are numerous organisations and projects providing assistance for âclean and safeâ vegetable farming in northern Thailand. Scope exists to improve the performance of farmers in all groups as technical efficiencies and TGRs of farms vary widely in all groups. Improvements are needed for agronomic technology, supply chains, farmer capacity in production and marketing, and effectiveness of technology transfer strategies. |
| Keywords: | organic, technical efficiency, stochastic frontier, metafrontier, northern Thailand, Agribusiness, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare10:59092&r=sea |
| By: | Wei Chen; J L Ford |
| Abstract: | This paper is an original study of the volatility in China’s oil fuel spot and futures markets, and in the spot market of Singapore one of China’s main source of imports. GARCH(1,1), TGARCH(1,1) and a constant variance model are estimated using 500 daily observations from 25 August 2005. The optimum hedge ratios derived from the competing models are evaluated in terms of the variance and semi-variance (downside) risk that they promise compared with a no-hedge portfolio: and also in terms of their expected utility. This is also accomplished for hedging in the Singapore market. Out-of-sample observations (54) are used to up-date, day-by-day, the variance-covariance matrices from the estimation period. The findings are used to compare the competing models, and the two hedging strategies, over that extended period. They showed the stability of the original estimates and of the ranking of the models under any given criterion. Hedging in China’s market is more effective in terms of reducing downside risk and maximising expected utility than is hedging in Singapore’s market. The latter dominates in terms of variance reduction. |
| Keywords: | China's fuel oil spot and futures returns, Singapore's spot market, volatility, bivariate GARCH and TGARCH, hedged portfolio returns, variance reduction, downside risk, expected utility |
| JEL: | G10 C53 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:bir:birmec:10-15&r=sea |
| By: | Kawai, Masahiro (Asian Development Bank Institute); Petri, Peter (Asian Development Bank Institute); Sisli-Ciamarra, Elif (Asian Development Bank Institute) |
| Abstract: | The global economic crisis refocused attention on the governance of international economic institutions (IEIs). This study uses the analytical framework of club theory to highlight structural obstacles to reform in international macroeconomic management, development finance, trade, and financial stability. The authors argue that reforms currently being discussed—for example, in voting power in the International Monetary Fund and the World Bank—are important, but not sufficient to make IEIs adaptable to the demands of a rapidly changing world economy. The authors propose transforming IEIs by shifting more decisions from the global to sub-global level. Partially decentralized decision making already exists in some policy areas (for example in regional development banks) and could expand and improve the provision of international public goods. |
| Keywords: | global governance decentralized institutions; decentralizing international economic institutions; international institution reform |
| JEL: | F02 F13 F33 F42 |
| Date: | 2009–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0157&r=sea |
| By: | Cheong, Inkyo (Asian Development Bank Institute); Cho, Jungran (Asian Development Bank Institute) |
| Abstract: | The Republic of Korea (hereafter Korea) continues to promote an open-trade system via the conclusion of free trade agreements (FTAs), arguing that Korean enterprises will obtain considerable business opportunities under the FTAs the government has implemented. However, the FTAs that are currently being implemented in Korea are said to be beneficial only to some enterprises. This study presents new evidence from a survey conducted from July–August 2008 on 120 Korean firms. The paper explores critical questions regarding the utilization of FTAs, their perceived costs and benefits, perceptions of multiple rules of origin (ROOs), and policy and institutional support mechanisms for FTAs. <p>One of the key findings is that most of the currently implemented FTAs in Korea were concluded with small- and medium-sized developing countries. Moreover, within these FTAs, the range of preferential tariffs is not very broad in scope; as such, only one out of five enterprises was found to be utilizing them. However, since the conclusion of FTAs with the United States and the European Union, Korean businesses have become very interested in utilizing those respective FTAs. The government should make efforts for early implementation of these FTAs. In the FTAs concluded by Korea, ROOs are strict and complicated. In future FTAs, a more neutral and lenient form of ROOs should be adopted. |
| Keywords: | free trade agreement korea; korea fta impact; korea fta trade business |
| JEL: | F13 F15 |
| Date: | 2009–10–15 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0156&r=sea |
| By: | Lagerkvist, Carl Johan; Johansson, Helena; Birol, Ekin; Roy, Devesh; Narrod, Clare |
| Abstract: | Irrigation with raw or diluted wastewater is a widespread phenomenon, occurring on 20 million hectares across the developing world, especially in Asian countries, but also in peri-urban areas around almost every city of sub-Saharan Africa and in many Latin American cities. Growing urban populations and consequent increases in demand for food and water has spurred the use of sewage to water crops as this is, in many cases, the only form of irrigation for farmers who either lack clean water or for whom clean water is too expensive. Wastewater has high nutrient value and constitutes a reliable source (Scott et al., 2004). It is mostly used to produce cash crops (e.g. vegetables and cereals). For example, it has been estimated that in most parts of Sub- Saharan Africa, urban and peri-urban farms irrigated with polluted water resources contribute 60-100 percent of the vegetables needed in most cities (IFPRI, 2008). Production of these cash crops is found to generate significant livelihood opportunities, not only for urban and peri-urban farmers but also for traders, input suppliers and other service providers (Scott et al., 2004; Water Policy Briefing, 2006). |
| Keywords: | Agribusiness, Agricultural and Food Policy, Farm Management, Food Consumption/Nutrition/Food Safety, Research and Development/Tech Change/Emerging Technologies, Risk and Uncertainty, |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iefi09:59115&r=sea |
| By: | Terrakul, Nuttamon; Villano, Renato; Wood, Fiona; Mounter, Stuart |
| Abstract: | Poverty alleviation remains a challenge for Thailandâs socio-economic development. A key strategy of the Thai government to help meet this challenge at the âgrass rootsâ level has been the promotion of Community-Based Enterprises (CBEs). And national statistics and descriptive studies have shown that CBEs have led to both income improvement and employment creation. However, poverty is a multi-dimensional concept and also some groups are more adversely affected (such a women) than others. By investigating poverty from a number of different angles, this research aims to assess whether CBES are a genuine tool for poverty reduction at the individual household level. This paper provides an outline of the framework developed for assessing CBE impact on poverty reduction at the micro level. This approach is a multi-disciplinary approach drawing particularly on three main fields of knowledge: business performance measurement, impact assessment of development projects, and poverty measurement. The approach is divided into two main steps: (1) identification of poverty groups and poverty components, and (2) impact assessment of CBEs and other factors on household poverty. By using this approach, it is expected that not only the impact of CBEs on household poverty can be measured, but also the role and contribution of women in CBEs and possible related benefits can be assessed. The focus of this research is on investigating the actual impact of CBEs on poverty reduction in northern Thailand. At this stage, no empirical results will be provided, but outcomes of the initial phase of the implementation are discussed. The empirical application is based on a survey conducted using 14 CBEs, 343 households and 12 villages. |
| Keywords: | impact assessment, community-based enterprise, poverty reduction, gender empowerment, northern Thailand, International Development, Research Methods/ Statistical Methods, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare10:59165&r=sea |
| By: | Chi Chung, Kit; Fleming, Euan; Fleming, Pauline |
| Abstract: | The global food marketing network is being constantly reshaped, providing opportunities and challenges to the use of information and communication technology (ICT) to develop international trade in food products. ICT is likely to be especially important for food products such as fresh fruit and vegetables that are differentiated and sensitive to timeliness in supply, possess varied quality dimensions, and involve considerable supply accumulation and assortment. Digital ICT (Internet and mobile phones), in particular, is expected to facilitate international trade and encourage efficiency in the fruit and vegetables marketing system in two main ways. First, it reduces communication and search costs through cheaper and more effective media. Second, it improves market information and corrects information externalities along the supply chain, by promoting greater price transparency and enabling consumer preferences and tastes to be more precisely met. We employed a gravity model of international trade to test the hypothesis that ICT positively affects bilateral international trade in fruit and vegetables between member Asia-Pacific Economic Cooperation (APEC) economies in the period from 1997 to 2006. Explanatory variables include the usage of the Internet, mobile telephones and fixed telephone lines, and a broad range of factors that might determine the value of bilateral trade such as income per capita, population, distance between trading partners and common language. A Poisson pseudo-maximum likelihood model was estimated in order to handle zero trade observations and reduce biases caused by heteroskedasticity. Empirical results were not quite as expected, with relatively minor impact of digital ICT. They suggest that using digital ICT has significant positive effects on trade in fruit and vegetables between APEC countries only for the Internet in exporting countries. A stronger positive impact was discerned for the traditional form of ICT, fixed telephone lines in exporting importing countries. Nevertheless, fostering the development of digital ICT infrastructure and its diffusion should make exporters in APEC countries more competitive in the fruit and vegetables supply chain through the Internet effect, and boost their trade values in these products. |
| Keywords: | International Relations/Trade, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare10:59077&r=sea |
| By: | Eichengreen, Barry (Asian Development Bank Institute) |
| Abstract: | This paper attempts to draw out the implication of the financial crisis for emerging markets. The most important implications will center on financial markets, where there will be less reliance on portfolio capital flows to finance investment and some deglobalization of banking so that the domain of bank operations more closely coincides with the domain of regulation. By contrast, the implications for other dimensions of globalization and for the structure of the international monetary system will be more limited. |
| Keywords: | global financial crisis; lessons; exchange rate policy; financial architecture |
| JEL: | F00 F30 |
| Date: | 2009–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0179&r=sea |
| By: | Hooi Hooi Lean (School of Social Sciences, Universiti Sains Malaysia); Michael McAleer (Erasmus School of Economics, Erasmus University Rotterdam, Tinbergen Institute and Department of Economics and Finance, University of Canterbury); Wing-Keung Wong (Department of Economics, Hong Kong Baptist University) |
| Abstract: | This paper examines investor preferences for oil spot and futures based on mean-variance (MV) and stochastic dominance (SD). The mean-variance criterion cannot distinct the preferences of spot and market whereas SD tests leads to the conclusion that spot dominates futures in the downside risk while futures dominate spot in the upside profit. It is also found that risk-averse investors prefer investing in the spot index, whereas risk seekers are attracted to the futures index to maximize their expected utilities. In addition, the SD results suggest that there is no arbitrage opportunity between these two markets. Market efficiency and market rationality are likely to hold in the oil spot and futures markets. |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:tky:fseres:2010cf744&r=sea |
| By: | Begg, Michael; Santos, Paulo |
| Abstract: | The literature analysing the impacts of livestock banks is limited to a small number of papers, mostly of a qualitative nature. This paper contributes to the knowledge on the impacts of this type of intervention on short- term household food security through the analysis of original data form 112 households that participated in a pig bank in Laos. Taking advantage of the staggered implementation of the program, we use propensity score matching the show that receiving pigs reduces household rice production by approximately 34 percent in the first harvest after participation commenced. However, the effects are differentiated across initial wealth status of the beneficiary: if the houshold was classified as being poor before the start of the program, participation has no meaningful impact on rice production. The policy implications of the analysis are examined. |
| Keywords: | Laos, Livestock banks, Rice production, Propensity score matching, International Development, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare10:58883&r=sea |
| By: | Briones, Roehlano M. |
| Abstract: | <p>Sustaining and accelerating agricultural growth remains a development imperative in view of persistent rural poverty and emerging threats to food security. While growth can be achieved by expansion of agricultural area and input intensification, growth through improvement in productivity is a promising option. However, productivity growth appears to be a relatively low priority for policy. Rather, the agricultural strategy is oriented toward domestic protection to achieve self-sufficiency and to support production by generous subsidies. In contrast, an alternative strategy may be one that is competition-oriented and productivity-based, i.e., one that favors integration with the international economy through trade, as well as making domestic investments targeted at productivity growth.</p> <p>Scenarios for Philippine agriculture under these policy options are evaluated using a new supply and demand model (Agricultural Multimarket Model for Policy Evaluation or AMPLE). Model simulations suggest that: rapid productivity growth, even when combined with trade liberalization, is generally favorable for farmers and consumers based on improved outlook on production, exports, and food consumption. In contrast, trade liberalization alone has a contractionary effect on agriculture; and production support is a costly instrument for promoting agricultural growth. The model experiments suggest that a back-to-basics strategy for agriculture, incorporating various productivity-based instruments such as investments in R&D, extension, rural infrastructure, protection of the resource base of agriculture, and even human capital formation and institutional reforms, are key to long-term agricultural growth.</p> |
| Keywords: | agriculture, productivity growth, scenario analysis, supply and demand, technological change |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:phd:dpaper:dp_2010-05&r=sea |
| By: | Dubois, Pierre; Ligon, Ethan |
| Abstract: | Using data on individual consumption from farm households in the Philippines, we construct a direct test of risk-sharing within the household. We contrast the efficient outcomes predicted by the unitary household model with the outcomes we might expect if food consumption delivers not only utils, but also nutrients affecting future productivity. The efficiency conditions which characterize the within household allocation of food under the unitary model are violated, as consumption responds to earnings shocks. If productivity depends on nutrition, this explains some but not all of the response, as earnings “surprises” have some effect on the cost and composition of diet. |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:21967&r=sea |