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on South East Asia |
| By: | Hal Hill |
| Abstract: | This paper examines the experience of Indonesia during two major crisis episodes, the 1997-98 Asian financial crisis and the 2008-09 global economic recession. In the first episode, Indonesia experienced a deep economic and political crisis, while in the second the impacts were very mild. The paper examines various explanations of these large differences, focused in particular on the contrasting hypotheses of 'good management' and 'good luck'. The comparative Southeast Asian experience is also analyzed. |
| Keywords: | Indonesia, Southeast Asia, crises |
| JEL: | E65 N15 O53 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pas:papers:2012-03&r=sea |
| By: | Budy P. Resosudarmo; Ani A Nawir; Ida Aju P. Resosudarmo; Nina L Subiman |
| Abstract: | Alternative land use remains a controversial issue in Indonesia, particularly with regard to regions outside Java. This paper aims to highlight forest land use dynamics in Indonesia, and particularly the difficulties of resolving the conflicts between conservation, the need to preserve local livelihoods, the demands of the logging industry, both legal and illegal, and the pressures to convert land from forest use to other uses, mainly agriculture, plantations and mining. The paper also stresses the importance of more research into who benefits from these competing uses of forest lands, and how these benefits have been distributed within Indonesian society. In conclusion, this paper argues that the underlying causes of deforestation in Indonesia are complex, and cover various aspects of market failure, inappropriate policy implementation in relation to forest management, lack of governance capacity at central and district levels, and other, broader socioeconomic and political issues. |
| Keywords: | forest management, deforestation, plantation, mining, climate change |
| JEL: | Q23 Q54 Q56 Q58 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pas:papers:2012-01&r=sea |
| By: | Kaliappa Kalirajan |
| Abstract: | It is logical to argue that low carbon goods and services (LCGS) led growth is an imperative for the Asia Pacific countries, particularly for the emerging Asian economies, which are heavily dependent on imported energy and resources. Acknowledging this fact, recently, governments in the Asian region individually have been taking effective actions in the form of voluntary targets and policy commitments to improve the production and use of LCGS. While different sectoral policies, such as trade, environment, and investment policies that aim to facilitate private enterprises, households, and government agencies to contribute to green growth through the use of LCGS are being implemented at the national level, fears of competitive disadvantage mean that these need to be driven by global and regional frameworks that encompass all countries and sectors. It is in this context, the objectives of this study are (i) to measure the potential of major emerging Asian economies for exports in LCGS under the grand regional cooperation, partial regional cooperation, and stand alone scenarios; and (ii) to measure the impact of existing 'behind the border' constraints on potential exports in emerging Asian economies. |
| Keywords: | Low carbon goods and services, grand regional cooperation, partial regional cooperation, behind the border, constraints |
| JEL: | Q56 Q58 R11 |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:een:ccepwp:1204&r=sea |
| By: | Ismail, Mohd Adib; Mawar, Murni Yunus |
| Abstract: | This paper investigates the relationship among energy, emissions and economic growth in Malaysia with the presence of trade activities. We employ Johansen’s (1995) approach to investigate the relationship. Using annual data from 1971 to 2007, the empirical results shows that there are long-run causalities among energy, emission and economic growth, and among energy, emissions, export and capital, while the short-run Granger non-causality test shows that there are unidirectional causalities running from energy to economic growth and capital, from economic growth to capital and from emissions to export. The short-run results show that the Malaysian data support the growth hypothesis relationship between energy and economic growth, in which the conservation policies such as reduction measures in energy use will not work to improve the environment. In contrast, in the long-run, the feedback hypothesis is observed. Therefore, we suggest the policy makers in Malaysia to focus on long-run conservation policies. |
| Keywords: | Emissions; Economic growth; Export; VECM; Causality; Impulse-response function; Malaysia |
| JEL: | C32 Q50 Q43 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:38473&r=sea |
| By: | Anderson, Kym; Strutt, Anna |
| Abstract: | Rapid trade-led economic growth in emerging Asia has been shifting the global economic and industrial centres of gravity away from the north Atlantic, raising the importance of Asia in world trade but also altering the commodity composition of trade by Asia and other regions. What began with Japan in the 1950s and Korea and Taiwan from the late 1960s has spread to the much more populous ASEAN region, China and India. This paper examines how that growth and associated structural changes are altering agricultural markets in particular and thereby food security. It does so retrospectively and by projecting a model of the world economy which compares alternative growth strategies, trade policy scenarios and savings behaviours to 2030. Projected impacts on sectoral shares of GDP, ‘openness’ to trade and the composition and direction of trade are drawn out, followed by effects of the boom in non-farm sectors on agricultural self-sufficiency and real food consumption per capita in Asia and elsewhere. The paper concludes by drawing implications for policies that can address more efficiently Asia’s concerns about food security and rural-urban income disparity than the trade policy measures used by earlier-industrializing Northeast Asia. |
| Keywords: | Asian economic growth and structural change; booming sector economics; food security; global economy-wide model projections; South-South trade |
| JEL: | D58 F13 F15 Q17 |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8950&r=sea |
| By: | Erik Olbrei (Development Policy Centre, Crawford School of Public Policy, The Australian National University); Stephen Howes (Development Policy Centre, Crawford School of Public Policy, The Australian National University) |
| Abstract: | On 9 September 2007, Australian Ministers and the Indonesian President announced a $100 million Kalimantan Forests and Climate Partnership (KFCP). This would involve protecting 70,000 hectares of peat forests, re-flooding 200,000 hectares of dried peatland, and planting 100 million trees in Central Kalimantan, Indonesia. Since then, the ambitions of KFCP have been quietly but drastically scaled back. The area expected to be re-flooded by the project is now just over 10 per cent of the original target. And little progress has been made on the ground. Four years on, blocking of the large canals required for re-flooding has yet to commence, and only 50,000 trees have been planted against the initial target of 100 million. What has happened to what was labelled at its launch as 'a very real and very practical contribution', one which would yield 'immediate and tangible results'? We analyze KFCP both as an aid 'announceable' and as a REDD (Reducing Emissions from Deforestation and Degradation) demonstration project, and reach two main conclusions. First, KFCP illustrates the damage that an emphasis on announcing new projects and a lack of attention to reporting on project progress can cause aid. Not enough has been done to publicly reposition KFCP as a much smaller, demonstration project. Second, slow progress made in implementing KFCP (and other REDD projects), when juxtaposed against the continued rapid rate of land conversion in Indonesia, suggests that the current approach is not working. There is no easy solution. Reducing deforestation in Indonesia is a difficult task because the drivers of deforestation – which range from weak governance to a strong industry lobby and the attractive economics of palm oil – are strong and difficult to tackle. If it is worth continuing, then the focus on pilots and processes which has characterized Australia's engagement in Indonesia's forestry sector in recent years should be re-oriented towards a more ambitious engagement. This should be supported by a vigorous high-level policy dialogue and at least the realistic prospect of a large amount of public funds. |
| Keywords: | deforestation, Indonesia, Australian aid, climate change, REDD |
| JEL: | F35 N55 Q23 |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:een:devpol:1216&r=sea |
| By: | Robert Sparrow; Ellen Van de Poel; Gracia Hadiwidjaja; Athia Yumna; Nila Warda; Asep Suryahadi |
| Abstract: | We assess the financial risk of ill health for households in Indonesia, the role of informal coping strategies, and the effectiveness of these strategies in smoothing consumption. Based on household panel data, we find evidence of financial risk from illness through medical expenses, while income from informal wage labour is exposed to risk for the poor and income from self-employed business activities for the non-poor. However, this lead to imperfect consumption smoothing only for the rural population and the poorest quartile; the non-poor seem to be able to maintain current spending. Borrowing and drawing on buffers, such as savings and assets, seem to be key informal coping strategies for the poor, which infers potential negative long term effects. While these results suggest scope for public intervention, the financial risk from income loss for the rural poor is beyond public health care financing reforms. Rather, formal sector employment, which reduces income risks, seems to be a key instrument for financial protection from illness. |
| Keywords: | Illness, income, consumption smoothing, coping strategies, Indonesia |
| JEL: | O15 I15 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pas:papers:2012-07&r=sea |
| By: | Cairns, Alexander; Meilke, Karl D. |
| Abstract: | In the mid-2000’s, Goldman Sachs identified two groups of emerging economies known as the BRICs and the Next-11. Primarily selected on the basis of having large populations, these countries were heralded as the growth centres of the future with the potential to stimulate increased demand for a wide range of commodities, including food. This study uses an import demand model to estimate how income influences per capita expenditure on agrifood imports in 63 countries. The findings suggest that as groups the BRICs and N-11 do not di↵er from other low, middle, or high income countries with respect to their import behaviour. However, disaggregation of the two groups reveals significantly larger expenditure elasticities for China, India, South Korea and Vietnam. A forecasting exercise reveals the capacity of income and population growth in China, India, Indonesia, Russia, South Korea and Vietnam to substantially increase their expenditure on imported agrifood products. |
| Keywords: | Next-11, BRICs, trade, agrifood, imports, Agricultural and Food Policy, Demand and Price Analysis, International Relations/Trade, |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:catpwp:122737&r=sea |
| By: | Jesus Felipe; Arnelyn Abdon; Utsav Kumar |
| Abstract: | This paper provides a working definition of what the middle-income trap is. We start by defining four income groups of GDP per capita in 1990 PPP dollars: low-income below $2,000; lower-middle-income between $2,000 and $7,250; upper-middle-income between $7,250 and $11,750; and high-income above $11,750. We then classify 124 countries for which we have consistent data for 1950–2010. In 2010, there were 40 low-income countries in the world, 38 lower-middle-income, 14 upper-middle-income, and 32 high-income countries. Then we calculate the threshold number of years for a country to be in the middle-income trap: a country that becomes lower-middle-income (i.e., that reaches $2,000 per capita income) has to attain an average growth rate of per capita income of at least 4.7 percent per annum to avoid falling into the lower-middle-income trap (i.e., to reach $7,250, the upper-middle-income threshold); and a country that becomes upper-middle-income (i.e., that reaches $7,250 per capita income) has to attain an average growth rate of per capita income of at least 3.5 percent per annum to avoid falling into the upper-middle-income trap (i.e., to reach $11,750, the high-income level threshold). Avoiding the middle-income trap is, therefore, a question of how to grow fast enough so as to cross the lower-middle-income segment in at most 28 years, and the upper-middle-income segment in at most 14 years. Finally, the paper proposes and analyzes one possible reason why some countries get stuck in the middle-income trap: the role played by the changing structure of the economy (from low-productivity activities into high-productivity activities), the types of products exported (not all products have the same consequences for growth and development), and the diversification of the economy. We compare the exports of countries in the middle-income trap with those of countries that graduated from it, across eight dimensions that capture different aspects of a country’s capabilities to undergo structural transformation, and test whether they are different. Results indicate that, in general, they are different. We also compare Korea, Malaysia, and the Philippines according to the number of products that each exports with revealed comparative advantage. We find that while Korea was able to gain comparative advantage in a significant number of sophisticated products and was well connected, Malaysia and the Philippines were able to gain comparative advantage in electronics only. |
| Keywords: | Middle-income Trap |
| JEL: | C33 O40 O54 |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_715&r=sea |
| By: | Kornkarun Cheewatrakoolpong; Somprawin Manprasert (Chulalongkorn University) |
| Abstract: | In this paper, the authors attempt to measure the importance of total trade concentration, which includes the effects through indirect linkages, and its connection to the transmission of external shocks experienced by the Thai economy. |
| Keywords: | trade concentration, crisis transmission, export diversification, backward linkages, and financial crisis |
| JEL: | F14 F41 F42 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:esc:wpaper:11212&r=sea |
| By: | Yilmaz Akyüz (The South Centre) |
| Abstract: | This paper argues that the unprecedented acceleration of growth in the developing world in the new millennium in comparison with advanced economies is due not so much to improvements in underlying fundamentals as to exceptionally favourable global economic conditions, shaped mainly by unsustainable policies in advanced economies. The only developing economy which has had a major impact on global conditions, notably on commodity prices, is China. However, growth in China has been driven first by a rapid expansion of exports to advanced economies and more recently, after the global crisis, by an investment boom, neither of which is replicable or sustainable over the longer term. To maintain a rapid growth, export-led Asian economies need to reduce their dependence on foreign markets. For Latin American and African commodity exporters, gaining greater autonomy and achieving rapid and stable growth depend on their success in reducing reliance on capital flows and commodity earnings – the two key determinants of their growth which are largely beyond national control. |
| Keywords: | global growth, decoupling, developing and emerging economies, advanced economies |
| JEL: | F43 N10 O57 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:tek:wpaper:2012/3&r=sea |
| By: | Michael McAleer (Erasmus University Rotterdam,Tinbergen Institute,Kyoto University,Complutense University of Madrid); Chia-Lin Chang (Department of Applied Economics Department of Finance, National Chung Hsing University Taichung, Taiwan); Roengchai Tansuchat (Faculty of Economics Maejo University Chiang Mai, Thailand) |
| Abstract: | This paper estimates a long memory volatility model for 16 agricultural commodity futures returns from different futures markets, namely corn, oats, soybeans, soybean meal, soybean oil, wheat, live cattle, cattle feeder, pork, cocoa, coffee, cotton, orange juice, Kansas City wheat, rubber, and palm oil. The class of fractional GARCH models, namely the FIGARCH model of Baillie et al. (1996), FIEGARCH model of Bollerslev and Mikkelsen (1996), and FIAPARCH model of Tse (1998), are modelled and compared with the GARCH model of Bollerslev (1986), EGARCH model of Nelson (1991), and APARCH model of Ding et al. (1993). The estimated d parameters, indicating long-term dependence, suggest that fractional integration is found in most of agricultural commodity futures returns series. In addition, the FIGARCH (1,d,1) and FIEGARCH(1,d,1) models are found to outperform their GARCH(1,1) and EGARCH(1,1) counterparts. |
| Keywords: | Long memory, agricultural commodity futures, fractional integration, asymmetric, conditional volatility. |
| JEL: | Q14 Q11 C22 C51 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:kyo:wpaper:817&r=sea |
| By: | Sunanda Sen |
| Abstract: | The narrative as well as the analysis of global imbalances in the existing literature are incomplete without the part of the story that relates to the surge in capital flows experienced by the emerging economies. Such analysis disregards the implications of capital flows on their domestic economies, especially in terms of the "impossibility" of following a monetary policy that benefits domestic growth. It also fails to recognize the significance of uncertainty and changes in expectation as factors in the (precautionary) buildup of large official reserves. The consequences are many, and affect the fabric of growth and distribution in these economies. The recent experiences of China and India, with their deregulated financial sectors, bear this out. Financial integration and free capital mobility, which are supposed to generate growth with stability (according to the "efficient markets" hypothesis), have not only failed to achieve their promises (especially in the advanced economies) but also forced the high-growth developing economies like India and China into a state of compliance, where domestic goals of stability and development are sacrificed in order to attain the globally sanctioned norm of free capital flows. With the global financial crisis and the specter of recession haunting most advanced economies, the high-growth economies in Asia have drawn much less attention than they deserve. This oversight leaves the analysis incomplete, not only by missing an important link in the prevailing network of global trade and finance, but also by ignoring the structural changes in these developing economies--many of which are related to the pattern of financialization and turbulence in the advanced economies. |
| Keywords: | Global Current Account Imbalances; Impossible Trinity; Capital Mobility; Official Reserves; Monetary Policy; National Autonomy; Efficient Market |
| JEL: | E31 E52 F42 O16 O53 |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_714&r=sea |
| By: | Frankel, Jeffrey A. (Harvard University) |
| Abstract: | The large economies have each, in sequence, offered "models" that once seemed attractive to others but that eventually gave way to disillusionment. Small countries may have some answers. They are often better able to experiment with innovative policies and institutions and some of the results are worthy of emulation. This article gives an array of examples. Some of them come from small advanced countries: New Zealand's Inflation Targeting, Estonia's flat tax, Switzerland's debt brake, Ireland's FDI policy, Canada's banking structure, Sweden's Nordic model, and the Netherlands' labor market reforms. Some examples come from countries that were considered "developing" 40 years ago, but have since industrialized. Korea stands for education; among Singapore's innovative polices were forced saving and traffic congestion pricing; Costa Rica and Mauritius outperformed their respective regions by, among other policies, foreswearing standing armies; and Mexico experimented successfully with the original Conditional Cash Transfers. A final set of examples come from countries that export mineral and agricultural commodities, historically vulnerable to the "resource curse," but that have learned how to avoid the pitfalls: Chile's structural budget rules, Mexico's oil option hedging, and Botswana's "Pula Fund." |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp12-013&r=sea |
| By: | Ben-David, Itzhak (OH State University); Agarwal, Sumit (National University Singapore and Federal Reserve Bank of Chicago) |
| Abstract: | To understand better the role of loan officers' incentives in the origins of the financial crisis, we study a controlled field experiment conducted by a large bank. In the experiment, the incentive structure of a subset of small business loan officers was altered from fixed salary to volume-based pay. We use a diff-in-diff design to show that while the characteristics of loan applications did not change, incentive-paid loan officers book 19% loans with dollar amounts larger by 19%. We show that treated loan officers use their discretion more in the booking decision. Although loans booked by incentive-paid loan officers have better observable credit quality, they are 28% more likely to default. The increase in default is concentrated in loans that wouldn't have been booked in the absence of commission-based compensation, and in loans with excessive dollar amount. Our results support the idea that the explosion in mortgage volume during the housing bubble and the deterioration of underwriting standards can be partly attributed to the incentives of loan officers. |
| JEL: | G01 G21 |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:ohidic:2012-07&r=sea |