nep-sea New Economics Papers
on South East Asia
Issue of 2010‒07‒31
eleven papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Implications Of The Economic Rise Of The PRC For Asean and India: Trade and Foreign Direct Investment By Sadhana Srivastava; Ramkishen S. Rajan
  2. Regional Responses To The Southeast Asian Economic Crisis: A Case Of Self-Help Or No Help? By Chang Li Lin; Ramkishen S. Rajan
  3. Examining The Case For Reserve Pooling In East Asia: Empirical Analysis By Ramkishen S. Rajan; Graham Bird; Reza Y. Siregar
  4. Does Governance Matter for Enhancing Trade? Empirical Evidence from Asia By Prabir De
  5. The Japanese Economy and Economic Policy in Light of the East Asian Financial Crisis By Ramkishen Rajan
  6. Quantifying the Impact of Chikungunya and Dengue on Tourism Revenues By Dileep V. Mavalankar; S S Vasan; Tapasvi I Puwar; Tiina M Murtola
  7. Radio drug advertisement situation and regulation in Thailand By Tanattha Kittisopee; Puree Anantachoti; Viroj Tangcharoensathien
  8. Sand in the Wheels of International Finance: Revisiting the Debate in Light of the East Asian Mayhem By Ramkishen Rajan
  9. Why Should 5000 Children Die in India Every Day? Major Causes and Managerial Challenges By Ramani K V; Mavalankar Dileep; Tapasvi Puwar; Joshi Sanjay; Kumar Harish; Malek Imran
  10. Exporters' Response to FTA Tariff Preferences: Evidence from Thailand By Archanun KOHPAIBOON
  11. How Words Could End a War By Scott Atran; Jeremy Ginges

  1. By: Sadhana Srivastava; Ramkishen S. Rajan
    Abstract: An important and vigorous policy debate ongoing in Asia concerns the impact of the economic rise of the PRC on the rest of the region. This paper examines the relative performances of the PRC, selected ASEAN countries (Indonesia, Malaysia, the Philippines, Singapore and Thailand), and India over time, as well as the intensity and changing dynamics of their intra-regional economic interactions. Focus is on trends and patterns in merchandise trade, trade in commercial services, and FDI flows the last two decades and potential impact of the PRC’s continued economic emergence on ASEAN and India. [Working Paper No. 14]
    Keywords: vigorous policy, debate, Asia, Economic Rise, ASEAN, Indonesia, Malaysia, Philippines, Singapore, Thailand, intra-regional, economic interactions, commercial services, potential impact,
    Date: 2010
  2. By: Chang Li Lin; Ramkishen S. Rajan
    Abstract: The currency crises of the 1990s, particularly the one that hit Southeast Asia since the devaluation of the Thai baht on July 2, 1997, are suggestive of the relevance and pervasiveness of contagion or negative spillover effects that are largely regional in scope. As such, one of the mantras since the onset of the Southeast Asian economic crisis has been the need for “regional solutions to regional problemsâ€. Given that the two focal institutions in Southeast Asia, viz. the Association of Southeast Asian Nations (ASEAN) and the Asia-Pacific Economic Cooperation (APEC) were perceived as being successful in their past attempts in problem-solving, there were high expectations that such regionalism would be key in finding solutions to the Southeast Asian economic crisis and mitigating the after-shocks. Accordingly, this paper evaluates the regional responses to the crisis, taking stock of both preventive and curative initiatives of significance. While the focus is on ASEAN and APEC, consistent with the concept of ‘loose’ or ‘non-institutionalised’ regionalism in Southeast Asia and the larger Asia-Pacific region, other ad hoc unilateral or bilateral initiatives of significance by other Asian member countries in APEC are also examined, particularly those by the region’s dominant economic power, Japan. [Working Paper No. 8]
    Keywords: Southeast Asia, Association of Southeast Asian Nations (ASEAN), Asia-Pacific Economic Cooperation (APEC), problem-solving, economic power, Japan
    Date: 2010
  3. By: Ramkishen S. Rajan; Graham Bird; Reza Y. Siregar
    Abstract: Two features of East Asia’s recovery from the financial turmoil of 1997- 98 appear to be rather paradoxical. First, the regional economies (except Hong Kong, China and Malaysia) have allowed a relatively greater albeit modest degree of variability of their currencies according to market conditions. Second, the regional monetary authorities have simultaneously appeared keen on bolstering reserves to historically high levels. This paper examines the subject of reserve management in the broader context of monetary cooperation in East Asia. The paper briefly reviews the factors that go into the determination of “optimal reserves†in general, and specifically in the case of East Asia. It then goes on to investigate the gains, if any, to be reaped if the East Asian economies were to pool their reserves. [Working Paper No. 15]
    Keywords: East Asia, Financial turmoil, Hong Kong, China, Malaysia, Optimal Reserves, monetary authorities
    Date: 2010
  4. By: Prabir De (Research and Information System for Developing Countries)
    Abstract: The primary objective of this paper is to find whether or not the governance and institutions matter for enhancing Asia’s trade. In this study, we have performed a comprehensive empirical analysis of the linkages between governance and trade at the Asian subregional level. Our results indicate that all individual governance indicators except regulatory quality have significant impact on trade in Asia, of which government effectiveness is the most crucial for Asia’s trade promotion. One of the conclusions of this paper is that soft infrastructure such as the institutions and governance are important for enhancing Asia’s trade. In other words, good governance and institutions help unlock trade potential of a region (or a nation). Improved governance, particularly at the sectoral level, can carry huge payoffs at a time when Asia is planning to pursue a free trade for the entire region. Ignoring “governance weaknesses” can stultify economic returns to free trade. Therefore, more effective policy approaches toward improved governance are needed to complement the regional trade policy in Asia and beyond.
    Keywords: governance, institutions, trade, Asia
    JEL: F10 F13 F53
    Date: 2010
  5. By: Ramkishen Rajan
    Abstract: The depth and breadth of the East Asian financial crisis has added a sense of acute urgency for some concrete and credible measures by policy-makers to revitalise the Japanese economy. While steps to be taken for the long-run competitiveness and economic revitalisation of the Japanese economy are clear (with the only doubt being about whether and how effectively they will be implemented), those needed to boost aggregate demand in the short run are far less obvious. Given the near-zero nominal interest rates in Japan, most observers argue that an expansionary monetary policy would be ineffective. However, as with Krugman (1998a,b), we argue that once a distinction is made between real and nominal interest rates, it is logically possible for monetary policy to be effective in raising demand if it is able to create inflationary expectations. This could probably be effected through explicit announcements by the Bank of Japan of the intention to target a certain inflation rate in the future. [Working Paper No. 2]
    Keywords: East Asian, financial crisis, policy-makers, revitalise,Japanese economy, nominal interest rates, expansionary monetary policy, inflationary expectations, inflation rate
    Date: 2010
  6. By: Dileep V. Mavalankar; S S Vasan; Tapasvi I Puwar; Tiina M Murtola
    Abstract: 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. [Working Paper No. 2009-02-03]
    Keywords: Chikungunya; Cost of illness; Cost of intervention programmes; Dengue; Disease burden; Epidemic outbreak; Gujarat; Malaysia; Thailand; Tourism revenues
    Date: 2010
  7. By: Tanattha Kittisopee; Puree Anantachoti; Viroj Tangcharoensathien
    Abstract: Drug consumption in Thailand is high in comparison with other countries. A key factor influencing this over consumption is advertising. Radio is the media that can easily reach a lot of people, in both urban and rural areas. Thai people typically practice self-care by purchasing drugs from a local pharmacy. They are often stimulated by drug advertisements. Past data have shown that there were many illegal drug advertisements. Consumer protection of this aspect seems to be poor. Better regulation or regulatory mechanisms are needed; therefore, this study reviews the current regulations and practices of drug advertising via radio in Thailand. [HEFP working paper 02/05]
    Keywords: Drug consumption, Radio, urban, rural areas, purchasing drugs, local pharmacy, advertising, radio, Thailand
    Date: 2010
  8. By: Ramkishen Rajan
    Abstract: The turmoil that has characterised the global financial markets since the 1990s, and particularly the crisis in East Asia, has generated a great deal of support for proposals to add some frictions to the wheels of international finance, as part of overall reforms to the global financial architecture. With this in view, this paper explores the economic effects of and rationale for imposing levies on capital flows in general, and a Tobin tax in particular. It is argued that the primary aim of such a levy ought to be to act as a measure to prevent for a crisis from building up (i.e. a domestic boom fuelled by short-term capital inflows), rather than as a means of countering or providing breathing space for necessary adjustments once a crisis erupts (or threatens to do so). The Tobin tax needs to be fairly universal in its coverage, failing which there would be a migration of foreign exchange flows to tax havens. Admittedly, the political will to arrive at an international agreement on such a levy is far from assured. However, to the extent that developing economies are most impacted by the vagaries of the financial markets, each may find it in its best interest to unilaterally examine the efficacy of imposing Chilean-type measures of restraining capital flows, as appropriate and aggressive steps are taken to enhance the soundness and transparency of the banking and financial systems. [Working Paper No. 7]
    Keywords: global, financial markets, international finance, architecture, capital inflows, soundness, transparency, banking, financial systems
    Date: 2010
  9. By: Ramani K V; Mavalankar Dileep; Tapasvi Puwar; Joshi Sanjay; Kumar Harish; Malek Imran
    Abstract: Globally, more than 10 million children under 5 years of age, die every year (20 children per minute), most from preventable causes, and almost all in poor countries. Major causes of child death include neonatal disorders (death within 28 days of birth), diarrhea, pneumonia, and measles. Malnutrition accounts for almost 35 % of childhood diseases. India alone accounts for almost 5000 child deaths under 5 years old (U5) every day. India.s child heath indicators are poor even compared with our Asian neighbors, namely Malaysia, Sri Lanka, Thailand, Vietnam, China, Nepal and Bangladesh. Within India, the states of Bihar, Madhya Pradesh, Orissa, Rajasthan and Uttar Pradesh account for almost 60 % of all child deaths India.s neonatal mortality, which accounts for almost 50 % of U5 deaths, is one of the highest in the world. India launched the Universal Immunization Program in 1985, but the status of full immunization in India has reached only 43.5 % by 2005-06. India started the Integrated Child Development Scheme (ICDS) in 1975 to provide supplementary nutrition to children, but 50 % of our children are still malnourished; nearly double that of Sub-Saharan Africa. The WHO/UNICEF training program on Integrated Management of Neonatal and Childhood Illnesses, known as IMNCI, started in India a few years ago, but the progress is very slow. What is unfortunate is the fact that most of these deaths are preventable through proven interventions: preventive interventions and/or treatment interventions, but the management of childhood illnesses is very poor. In this working paper, we bring out the nature and magnitude of child deaths in India (Chapter 1) and then share with you in Chapters 2, 3 and 4 our observations on the management of some of national programs of the government of India such as The Universal Immunization Program (UIP) The Integrated Child Development Scheme (ICDS) The Integrated Management of Neonatal and Child Illnesses (IMNCI) In the final chapter (Chapter 5), we highlight certain managerial challenges to satisfactorily address the child mortality and morbidity in our country.
    Date: 2010–02–02
  10. By: Archanun KOHPAIBOON
    Abstract: This paper examines how the private sector responds to export opportunities induced by FTAs, using evidence from the Thai manufacturing sector during the period 2003-08. The core methodology is to undertake an inter-product panel-data econometric analysis to gain a better understanding of FTA utilization across products. Different from previous studies, it makes an explicit distinction between actual and preferential trade in which the latter is measured by the administrative records of FTA implementation. Our findings suggest that the product coverage is limited. Products that have benefited from FTA tariff preferences so far are highly concentrated. Our key finding from the econometric analysis is that as rules of origin (ROO) constraints are binding empirically, the ability to comply with ROO as well as tariff margin does matter in firmsf decisions to use FTAs. The estimated cost in compiling ROO is equivalent to a tariff in the range of 2% to 10%. Besides, the FTA impact on exports is conditioned by trade volume during the pre-signing FTA period. The key policy inference is that it is unlikely to be able to promote exports by maximizing the number of FTAs, while ignoring the nature of FTA partners. The nature of the FTA partner does matter in establishing whether the signed FTA would be useful. In addition, for Japan and countries which are enthusiastic about FTAs as a mode for further liberalization, FTA negotiation on tariff cuts schedules must be undertaken in a more comprehensive way in which ROO and trade facilitation issues must be incorporated in the negotiation.
    Date: 2010–07
  11. By: Scott Atran (IJN - Institut Jean-Nicod - CNRS : UMR8129 - Ecole Normale Supérieure de Paris - ENS Paris - Ecole des Hautes Etudes en Sciences Sociales (EHESS)); Jeremy Ginges (Dept Psychology - New School for Social Research)
    Abstract: AS diplomats stitch together a cease-fire between Hamas and Israel, the most depressing feature of the conflict is the sense that future fighting is inevitable. Rational calculation suggests that neither side can win these wars. The thousands of lives and billions of dollars sacrificed in fighting demonstrate the advantages of peace and coexistence; yet still both sides opt to fight. This small territory is the world's great symbolic knot. “Palestine is the mother of all problems” is a common refrain among people we have interviewed across the Muslim world: from Middle Eastern leaders to fighters in the remote island jungles of Indonesia; from Islamist senators in Pakistan to volunteers for martyrdom on the move from Morocco to Iraq. Some analysts see this as a testament to the essentially religious nature of the conflict. But research we recently undertook suggests a way to go beyond that. For there is a moral logic to seemingly intractable religious and cultural disputes. These conflicts cannot be reduced to secular calculations of interest but must be dealt with on their own terms, a logic very different from the marketplace or realpolitik.
    Date: 2009–12–26

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