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on South East Asia |
| By: | Victor Pontines (Asian Development Bank Institute (ADBI)); Reza Y. Siregar |
| Abstract: | The possible crucial role of international bank lending in transmitting adverse economic disturbance from developed economies to emerging economies in the 2008–2009 global financial crisis has placed capital flows into sharper scrutiny in academic and policy discussions. The authors construct macro-and micro-panel data on international bank lending to six Asian economies—Indonesia, the Republic of Korea, Malaysia, Philippines, Singapore, and Thailand—to analyze a number of objectives. The paper first examines the influence of critical determinants not only to overall international bank lending but also to cross-border bank lending, and obtained one finding that cross-border lending by international banks tend to pull out from host economies during difficult times in source economies, whereas such retrenchments are not evident on an aggregated basis. This suggests that encouraging brick-and-mortar affiliates of international banks to “set up shop†in recipient economies may be the judicious choice for these economies. The paper next examines the differences between subsidiaries and branches of international banks in terms of their ability to shield themselves from the financial difficulties of their global parent banks and thus their ability to continue lending in destination markets. The results show that foreign bank subsidiaries are more capable in this regard. This finding carries with it the attraction of favoring an organizational banking structure that is biased toward subsidiaries. However, national banking regulators should remember that apart from encouraging a host of other domestic and cross-border initiatives, encouraging the entry of brick-and-mortar subsidiaries of international banks should not be viewed as a panacea to financial stability concerns of economies in Asia and in emerging markets in general. |
| Keywords: | international bank lending, Lending Behavior, East Asian Economies, emerging economies, international banks, Emerging Markets |
| JEL: | C23 F34 F36 G15 N25 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:eab:financ:23347&r=sea |
| By: | Budy Resosudarmo (Division of Economics, RSPAS, The AUstralian National University); Arief Anshory Yusuf (Department of Economics, Padjadjaran University); Ditya A. Nurdianto (Division of Economics, RSPAS, The AUstralian National University) |
| Abstract: | Approximately 10 per cent of the world’s tropical forests or around 144 million ha are located in Indonesia, scattered from the westernmost tip of Sumatra to the eastern border of Papua, occupying approximately 70 per cent of the country’s land area (Barbier, 1998). Thus, Indonesia ranks third — after Brazil and Zaire — in its endowment of tropical forests (Forest Watch Indonesia, 2002). Indonesia’s forests have been one of its most important natural assets. Forestry related activities have provided an important source of formal as well as informal employment for many people and have generated large amounts of both government revenue and foreign exchange (Indonesia-UK Tropical Forest Management Program, 2001). Meanwhile, deforestation and forest degradation has been the main source of Indonesia’s Green House Gas (GHG) emission; i.e. 70-80% of Indonesia’s GHG emission. Incentive to reduce the rate of deforestation, through the Reducing Emissions from Deforestation and Forest Degradation (REDD) program, has recently widely discussed. In general, the program allows international communities to transfer a certain amount of funding to Indonesia to compensate its successful efforts to reduce its rate of deforestation. The question is what will the likely impact on the Indonesian economy, if Indonesia commits to be involved in this REDD program. This report illustrates the impacts of reduced deforestation have on the Indonesian economy and demonstrates the complexity in distributing Reducing Emissions from Deforestation and Forest Degradation (REDD) fund to compensate the negative economic impacts of reduced deforestation. |
| Keywords: | REDD, Indonesia |
| JEL: | Q5 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:unp:wpaper:201204&r=sea |
| By: | Hal Hill (Asian Development Bank Institute (ADBI)); Jayant Menon |
| Abstract: | Financial safety nets in Asia have come a long way since the Asian Financial Crisis (AFC) of 1997–98. Not wanting to rely solely on the International Monetary Fund (IMF) again, the Chiang Mai Initiative (CMI) was created in 2000. When the CMI also proved inadequate following the Global Financial Crisis (GFC), it was first multilateralized (CMIM), and then doubled in size to $240 billion, while the IMF de-linked portion was increased to 30%. A surveillance unit, the Association for Southeast Asian Nations (ASEAN)+3 Macroeconomic Research Office (AMRO), was set-up in 2011. These are impressive developments, but are they enough to make the CMIM workable? Without clear and rapid-response procedures to handle a fast-developing financial emergency, it is unlikely that the CMIM will be used even as a complement to the IMF. To serve as a stand-alone option however, its size or the IMF de-linked portion of funds needs to be further increased, as does its membership to add diversity. But if AMRO could develop into an independent and credible surveillance authority, then it could lead the next rescue. |
| Keywords: | Financial Safety Nets, Asia, global financial crisis, CMIM, IMF, AMRO, surveillance authority |
| JEL: | F32 F33 F34 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:eab:financ:23355&r=sea |
| By: | ICHIJO Kazuo |
| Abstract: | Rapid economic growth and globalization in Asia are driving new investment opportunities and intensifying competition. To sustain competitive advantage in this new business environment, which is marked by both fierce competition and unprecedented opportunities for collaboration, business leaders must expand their vision beyond their local markets and industries to the rest of Asia and the world.<br />As Japan's population declines and ages and the yen continues to appreciate rapidly, attention is being drawn to the rapid growth of emerging markets, especially in Asia. Confronted with these new circumstances, many Japanese companies have adopted the "expansion of business overseas" as their growth strategy, but this is a very steep path to climb. However, successful cases of growing business in Asian countries are emerging.<br />In this RIETI discussion paper, we will introduce successful cases of business growth by Japanese companies in Asia, especially in China and India. Key lessons from these cases are as follows: allowing globalization to drive a new business model; hybridization of the new business model and the existing business model, and effective human resource management. |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:12074&r=sea |
| By: | E. J. Wilson (Asian Development Bank Institute (ADBI)); K. Jayanthakumaran; R. Verma |
| Abstract: | This paper considers two major issues that need to be treated as matters of urgency. First, internal (within country) migrations in the Asian (ACI) region are mostly undocumented and large. It is shown there are significant differences in wages and human development measures to which migrants will respond. Our first (of two) recommendation(s) is the need to collect better information on migration and for wage premiums and discounts to be estimated across sectors and countries. The second major issue is the emerging demographic imbalances in the form of aging, which will give dependency ratios that have never been experienced in all of recorded human existence. This needs urgent attention and the development of appropriate migration policies. Whilst it is possible to share the burdens of ageing and dependency through migration, this will not happen under present arrangements. Migration cannot continue to be treated differently to trade and finance. A framework needs to be developed to provide a coherent set of policies relating to migration and social welfare, within and across countries in the Asian region. Our second recommendation is for the East Asia Summit (ASEAN+10) to set up a high level working group to consider possible future harmonized migration based policies, bringing together relevant economic, political, social and legal issues. This should encompass the recent ASEAN leadership on the rights of migrant workers and labor work programs. It complements the Summit’s focus on education and human resource development and heeds the World Economic Forum’s call for Asian leadership in enhancing regional connectivity (expanded to include human resources). As we have argued many times in this paper, increasing the mobility of humans is the best way to not only promote economic efficiency, but to provide freedom and significant improvements in their wellbeing and quality of life. |
| Keywords: | Demographics, Labor Mobility, productivity, human development measures, East Asia Summit, appropriate migration policies |
| JEL: | F22 J31 J61 O15 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:23348&r=sea |
| By: | Barry Eichengreen (Asian Development Bank Institute (ADBI)) |
| Abstract: | The rise of regional monetary arrangements poses a challenge for the International Monetary Fund (IMF)'s global surveillance efforts. This paper reviews how the IMF has responded to earlier regional initiatives, from the European Payments Union of the 1950s and the Gold Pool of the 1960s to the CFA franc zone and the European Monetary System. The penultimate section draws out the implications for monetary regionalism in East Asia. |
| Keywords: | Regional monetary arrangements, IMF, global surveillance, East Asia |
| JEL: | F30 F53 F55 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:eab:financ:23354&r=sea |
| By: | Vikram Nehru (Asian Development Bank Institute (ADBI)) |
| Abstract: | This paper examines the complementary and competitive roles of the World Bank and the Asian Development Bank (ADB) in Asia given the backdrop of a changing world in which development priorities and challenges are changing rapidly and the rapid expansion of financial flows to developing countries is challenging the influence of these organizations. The paper highlights changes to the international aid architecture, its increasing fragmentation, the rise of non-traditional donors, and recent efforts at improving aid coordination. With this background, the paper examines the roles of the World Bank and ADB in Asia, provides some comparisons of their performance, notes their overlapping responsibilities, and explains current approaches to coordination and cooperation between them. After examining alternative approaches toward improving the division of labor between the two organizations, the author concludes that the most likely scenario will be one of “muddling through†in which stakeholders are likely to tinker at the margins at sharpening the specialization of each institution rather than push through any radical reallocation of financial and knowledge management responsibilities. |
| Keywords: | the World Bank, ADB, aid coordination |
| JEL: | F34 O1 O19 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:eab:financ:23346&r=sea |
| By: | Dooyeon Cho (Korea Institute for International Economic Policy); Antonio Doblas-Madrid (Michigan State University) |
| Abstract: | Technical appendix for the Review of Economic Dynamics article |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:red:append:10-51&r=sea |
| By: | Michael G. Plummer (Asian Development Bank Institute (ADBI)) |
| Abstract: | This paper considers emerging commercial policy challenges facing the Asia-Pacific region in light of the impasse reached at the Eighth World Trade Organization (WTO) Ministerial Meeting in December 2011. It underscores that, while marginal liberalization of trade barriers under the Doha Development Agenda may not be forthcoming in the short- or even medium-term, the WTO has been successful in erecting a rules-based system of global governance and continues to be extremely important to the future health of the international trading system. Nevertheless, one can expect the current trend toward bilateral and regional free-trade areas (FTAs) will continue, particularly since it is easier to make progress toward “deep integration†in a smaller group of like-minded countries than in the context of the general WTO membership. This paper considers how the FTA trend is developing in the Asia-Pacific region and what its prospects are in the future. It stresses that regional—as opposed to bilateral—arrangements will be essential to the region for economic (e.g., supporting regional production networks) as well as diplomatic-political goals. This “new regionalism,†which has been supported by Asia-Pacific Economic Cooperation (APEC), will lead to significant reductions in the costs associated with bilateral FTAs (e.g., lower costs associated with rules of origin, improved utilization rates) and has many advantages over “noodle-bowl†bilateralism. |
| Keywords: | Post-Doha Agenda, New Regionalism, the Asia-Pacific, commercial policy, FTA trend, APEC, “noodle-bowl†bilateralism |
| JEL: | F13 F15 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:eab:tradew:23345&r=sea |
| By: | Tarisa Watanagase (Asian Development Bank Institute (ADBI)) |
| Abstract: | This paper discusses the relevance of Basel III to Asian emerging markets. It reviews some of the proposed regulations of Basel III in order to evaluate their likely implications for, and their ability to enhance, the stability of the banking and financial system. This is followed by a discussion on the challenges faced by the regulators of Asian emerging markets in effectively managing their financial regulations, given their capacity and institutional constraints. The paper concludes with policy recommendations for Asian emerging markets to strengthen and enhance the stability of their banking and financial systems. |
| Keywords: | Global Financial Regulatory Landscape, Asian Emerging Markets, Basel, banking and financial systems |
| JEL: | E52 G21 G28 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:eab:financ:23351&r=sea |
| By: | Marie Coiffard (CREG - Centre de recherche en économie de Grenoble - Université Pierre Mendès-France - Grenoble II : EA4625); Laëtitia Guilhot (CREG - Centre de recherche en économie de Grenoble - Université Pierre Mendès-France - Grenoble II : EA4625) |
| Abstract: | Le processus d'intégration régionale en Asie Orientale se renforce au fil des années tant dans sa dimension économique que dans sa dimension institutionnelle. De multiples déterminants peuvent expliquer ce phénomène : les accords entre les pays, la proximité géographique, culturelle, linguistique, l'essor du niveau de vie des pays,... Les migrations entre les pays peuvent être aussi un de ces facteurs. L'objectif de ce papier est d'estimer l'impact des flux migratoires intra‐régionaux sur l'intégration commerciale est‐asiatique. En mobilisant un modèle de gravité en données de panel sur cinq décennies (1970 à 2010), ce papier met ainsi en évidence que la mobilité régionale du facteur de production, travail, permet de renforcer la régionalisation commerciale est‐asiatique, notamment la régionalisation des biens intermédiaires et des biens d'équipement. Une intégration régionale par l'offre est ancrée en Asie. |
| Keywords: | intégration régionale ; migration internationale ; régionalisation ; échange commercial ; modèle de gravité ; Asie orientale |
| Date: | 2012–06–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00755102&r=sea |
| By: | Mun-Heng Toh (Asian Development Bank Institute (ADBI)) |
| Abstract: | This paper traces the development of the education sector from its nascent stage of serving economic development needs to the internationalization stage of fulfilling Singapore’s aspiration to be a global education hub. The state plays an important role in guiding and fostering development of the education sector in the creation and production of human capital for domestic production as well as cross-border trading to generate income and employment, and attract talent to the economy. Regional trading agreements can play a facilitating role for internationalization of higher education services, especially when commitments under the General Agreement on Trade in Services (GATS) are weak. Private education enterprises need no less regulatory measures than other economic sectors to function properly in the market economy—to add value, assure quality services, and yield benefits for education services purchasers. |
| Keywords: | Tertiary Education Services, Singapore, GATS, education sector, Human Capital, Private education, Regional trading agreements |
| JEL: | F16 I23 J24 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:eab:tradew:23349&r=sea |
| By: | Udaibir S. Das (Asian Development Bank Institute (ADBI)); Maria A. Oliva; Takahiro Tsuda |
| Abstract: | We examine some of the macro-financial dimensions of sovereign risk and propose a conceptual framework that captures risks other than just the default risk. Morphed under a multi-dimensional notion of sovereign risk, we argue that the existing empirical methodologies to measure sovereign risk cover only partial aspects of sovereign risk and fail to capture its macro-financial dimensions. We highlight a menu of tools that could be used to tackle the broader notion of sovereign risk, and suggest that authorities should actively use them to manage the macro-financial dimensions of sovereign risk before those risks feed into the real economy. |
| Keywords: | sovereign risk, macro-financial dimensions, default risk |
| JEL: | F30 F34 E43 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:eab:macroe:23344&r=sea |
| By: | Hiro Ito (Asian Development Bank Institute (ADBI)); Ulrich Volz |
| Abstract: | This paper examines the impact of sectorial reforms on current account imbalances, with a special focus on the People’s Republic of China (PRC). In particular, we investigate to what extent reforms pertaining to the financial sector, social protection, and healthcare may contribute to a rebalancing of the PRC’s persistent current account imbalances. Our forecasting results suggest that reforming the financial sector would be a significant contributor to the country’s rebalancing with an effect much larger than that of capital account liberalization. Strengthened provisions of social protection and publicly-funded healthcare are also found to contribute to a rebalancing of the PRC economy. |
| Keywords: | the PRC and Global Imbalances, financial sector, current account imbalances, Capital account liberalization, social protection, rebalancing |
| JEL: | F32 F41 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:eab:macroe:23353&r=sea |