nep-sea New Economics Papers
on South East Asia
Issue of 2015‒01‒19
seventeen papers chosen by
Kavita Iyengar
Asian Development Bank

  1. India's Emerging Connectivity with Southeast Asia: Progress and Prospects By De, Prabir
  2. Economic implications of ASEAN integration for Malaysia's labour market By Rasiah, Rajah
  3. Political Change and the Business Elite in Indonesia By Johansson, Anders
  4. Impact Evaluation of Development Programmes and Policies: Experiences from Viet Nam By Nguyen Viet, Cuong
  5. Indonesia Economic Quarterly, July 2014 : Hard Choices By World Bank
  6. Lao PDR Market Access Guide: Trading with ASEAN Dialogue Partners – People’s Republic of China By Lord, Montague J.
  7. International rice trade and security stocks: Prospects for an expanded Asian international rice reserve: By Dorosh, Paul A.; Childs, Abigail
  8. Improving Vietnam's Sustainability : Rural Road Pavement and Surfacing Design Options By World Bank
  9. Household Entrepreneurship and Social Networks: Panel Data Evidence from Vietnam By Nguyen, Huu Chi; Nordman, Christophe Jalil
  10. Logistics Performance Measurements - Issues and Reviews By Abu Bakar, Mohd Azlan; Jaafar, Harlina Suzana; Faisol, Nasruddin; Muhammad, Azlina
  11. Coverage of Trade in Services under ASEAN+1FTAs By Hikari ISHIDO
  12. Cambodia Services Trade : Performance and Regulatory Framework Assessment By World Bank Group
  13. Farmland and peri-urban livelihoods in Hanoi, Vietnam: evidence from household survey data By Tuyen, Tran Quang
  14. Be rich or don’t be sick: Estimating Vietnamese patients’ risk of falling into destitution By Quan Hoang Vuong
  15. Making Toilets More Affordable for Cambodia's Poor through Microfinance By World Bank Group
  17. On Bias in the Estimation of Structural Break Points By Liang Jiang; Xiaohu Wang; Jun Yu

  1. By: De, Prabir (Asian Development Bank Institute)
    Abstract: Connectivity is the key building block of convergence and cohesion in any regional integration initiative. Development of connectivity across any region—especially of transportation linkages, energy pipelines, and information and communication technology— contributes to integration by reducing transaction costs and facilitating intraregional trade and investment. The potential gains from closer connectivity between South Asia and Southeast Asia are no doubt large. India's regional integration with Southeast Asia has been advancing well and several projects are being implemented at present. India's regional connectivity with Southeast Asia has been evolving on two pillars: northeast India for multimodal and intermodal operations, and southern India for multimodal operations. This paper presents India's broad proposals on connectivity projects with Southeast Asia and policy recommendations to strengthen connectivity throughout Asia, in particular between India and the Association of Southeast Asian Nations. Enhancing connectivity between South and Southeast Asia is a multifaceted task that will require the implementation of strong policy initiatives. Development of connectivity in Southeast Asia and South Asia will bring significant opportunities for industrial development in India and trade potential with South and East Asian countries.
    Keywords: connectivity; transport; trade; south asia; southeast asia; regional integration; Governance; India
    JEL: F15 O24
    Date: 2014–12–24
  2. By: Rasiah, Rajah
    Abstract: This paper examines the implications of the formation of the Association of Southeast Asian Nations (ASEAN) Economic Community (AEC) in 2015 on Malaysia’s labour market. The discussion centres on the nature of the structural change that Malaysia has experienced, especially since the 1980s, and how that has impacted on its labour market. Integration into ASEAN markets has obviously helped Malaysia enjoy the synergies of regional coordination. Although Malaysia’s economic growth has been steady, the onset of deindustrialization before a shift to higher value-added activities has impacted somewhat negatively on per capita income growth rates since 2000. Although it is typically part of structural change for manufacturing’s share of gross domestic product to rise and fall, evidence reveals that Malaysia is facing premature deindustrialization, with a slowdown in labour productivity. In particular, trade performance since 2000 has impacted somewhat negatively on the labour market. Not only has the trade performance of manufacturing been falling, manufacturing labour productivity has slowed, with key sectors, such as electric–electronics, textiles and transport equipment, showing either negative or low productivity growth since 2000. Foreign low-wage labour has largely helped Malaysia maintain its trade competitiveness in low value-added activities. Despite the introduction of minimum wages in 2012, real wages have grown little in the manufacturing sector, which is the largest employer of low- skilled foreign workers. Weak trade unions have not helped. Although unemployment and inflation have remained low, the preoccupation with low-end activities has restricted per capita income growth.
    Keywords: labour market, economic implication, economic integration, regional cooperation, interindustry shift, Malaysia, ASEAN countries, marché du travail, conséquences économiques, intégration économique, coopération régionale, mutation interindustrielle, Malaisie, pays de l'ANASE, mercado de trabajo, consecuencias económicas, integración económica, cooperación regional, desplazamiento industrial, Malasia, países del ASEAN
    Date: 2014
  3. By: Johansson, Anders (Stockholm China Economic Research Institute)
    Abstract: As Suharto’s authoritarian regime came to an end in 1998, the country’s business elite faced new challenges. While rent seeking had previously primarily taken place through direct relationships with and concessions from Suharto, the business elite in contemporary Indonesia operates in a setting with a higher degree of fluidity and uncertainty. This study sheds light on how the changes to the political landscape in Indonesia have affected the business elite. This is done by tracing the relationship between business and politics throughout history from the colonial period up to contemporary Indonesia. It also discusses how these changes have made the analysis of political connections and the value of political capital more complicated and highlights some of the factors believed to be important when analyzing the economics behind business-political relationships in Indonesia.
    Keywords: Indonesia; political change; rent seeking; political connections; patronage; patrimonialism; elite; oligarchy
    JEL: D72 G30 G38
    Date: 2014–12–17
  4. By: Nguyen Viet, Cuong
    Abstract: Poverty reduction is one of major goals of development policy of most countries, especially developing ones. To reduce poverty, numerous development programmes have been implemented throughout the world. In recent decades, researchers as well as policy makers have been increasingly interested in impact evaluation of development programmes to improve the effectiveness of the programmes. Vietnam has been very successful in poverty reduction since the economic reform in 1986. The Government of Viet Nam, as well as international and domestic organisations, has implemented numerous targeted programmes to increase people’s welfare. Although increasing attention is paid to impact evaluation of programmes, well-designed impact evaluation of development projects remains very limited. This paper discusses experiences and difficulties in impact evaluation of development programmes in Viet Nam. The findings are expected to be relevant for not only Vietnam but also other developing countries, especially those with a similar socio-economic context as Vietnam.
    Keywords: Impact evaluation, impact evaluation experiences, development programs, Vietnam.
    JEL: H4 H43
    Date: 2014–05–20
  5. By: World Bank
    Keywords: Finance and Financial Sector Development - Access to Finance Finance and Financial Sector Development - Currencies and Exchange Rates Economic Theory and Research Private Sector Development - Emerging Markets Finance and Financial Sector Development - Debt Markets Macroeconomics and Economic Growth
    Date: 2014–07
  6. By: Lord, Montague J.
    Abstract: China is the second most important export destination of Laos, and export growth to that market has far outpaced exports to Thailand, the leading export destination. One of the major drivers of this growth is the comprehensive ASEAN-China Free Trade Agreement (ACFTA) under which Lao benefits in trade of goods and services and in investment measures. How Lao Producers and Exporters Benefit from ACFTA: - ACFTA’s Trade in Goods Agreement has already eliminated tariffs on 90% of its products imported by China. Tariffs on the remaining 10% of imports, classified as sensitive products, are being reduced at a slower pace. - Without preferential market access, other foreign suppliers to China are subject to an average tariff of over 8%. This high level of protection gives Lao businesses a large competitive advantage over competitors who are not ACFTA members. - For agricultural products, China’s average tariff is 65% for non-ACFTA member countries. Lao businesses therefore have a huge competitive advantage in agricultural exports over countries that are not part of the Agreement. - Laos’ proximity to China makes it easier to transport goods to that country than from other ACFTA member countries, especially with the planned development of transport infrastructure between the two countries. Moreover, China’s logistics environment is relatively favorable to trading. - China is one of the fastest growing markets in Asia. Two-way trade between China and ASEAN increased by nearly 30% in 2011 and is targeted to expand by another 20% by 2015. In the case of the Lao PDR, the trade expansion has been much higher. In the last five years, Lao exports to China have grown by an average of 80% a year and that rapid expansion is expected to continue in the coming years. This study covers the operation of the Agreement and its parts related to rules of origin, opportunities of Lao businesses, how to gain access to the market, and useful contacts and resources.
    Keywords: ASEAN-China Free Trade Area, ACFTA, ASEAN, FTA, free trade area, Laos, Lao PDR, ASEAN Dialogue Partners
    JEL: F13 F53 F55
    Date: 2013–03–01
  7. By: Dorosh, Paul A.; Childs, Abigail
    Abstract: This paper examines the recent experience with international rice reserves in Asia and re-examines the roles of national stocks and international trade in stabilizing domestic rice prices and availability in importing countries.
    Keywords: rice, Food prices, trade, food stocks,
    Date: 2014
  8. By: World Bank
    Keywords: Industry - Construction Industry Rural Roads and Transport Roads and Highways Rural Transport Transport Economics Policy and Planning Rural Development Transport
    Date: 2014
  9. By: Nguyen, Huu Chi; Nordman, Christophe Jalil
    Abstract: Using a unique panel of household businesses for Vietnam, this paper sheds light on the links between households’ and entrepreneurs’ social networks and business performance. We address two related questions. One first question asks if we can find evidence of a differentiated effect of employment of members of the family versus hired workers on the business performance. A second question tackles the respective effects of various dimensions of social networks on the business technical efficiency. The assumption is that, beyond the channel of labour productivity, entrepreneurs that are confronted with an unfavourable social environment may produce less efficiently and realize a lower output than what could be possible with the same amount of resources. We find evidence of a productivity differential between family and hired labour and highlight results consistent with the presence of adverse social network effects faced by households running a business, in particular ethnic minorities. We stress the importance of professional networks for successful entrepreneurship.
    Keywords: Family labour; Kinship and ethnic ties; Sharing norms; Social network capital; Informality; Household business; Travail familial; Liens ethniques et de parenté; Normes de partage; Capital du réseau social; Informalité; Microentreprises familiales; Panel; Vietnam;
    JEL: D13 D61 O12
    Date: 2013–11
  10. By: Abu Bakar, Mohd Azlan; Jaafar, Harlina Suzana; Faisol, Nasruddin; Muhammad, Azlina
    Abstract: Logistics is a backbone for the global supply chains. In Malaysia, logistics are now recognized as strategic industry that positively contribute to gross domestic product (GDP) and performance of logistics is foremost significant. Whereas most of the logistics performance has focused on investigating operational and trade facilitation contexts. Thus, the purpose of this paper is to examine the issues and reviews by practitioners and found 7 key components that translated it into operations performance objectives. It, thus, provided a base for future research to examine the relationships of this context empirically.
    Keywords: Logistics Performance, Exploratory, Malaysia
    JEL: L90 M19 Z0
    Date: 2014–03–01
  11. By: Hikari ISHIDO (Faculty of Law, Politics and Economics, Chiba University)
    Abstract: This paper examines how ASEAN-centered free trade agreements (FTAs) or so-called ASEAN+1 FTAs are correlated among themselves and thus have the potential to be merged into one single commitment toward the establishment of a Regional Comprehensive Economic Partnership (RCEP). The "Coverage Index" defined in this paper highlights similarities and differences among the ASEAN+1 FTAs (i.e., ASEAN Framework Agreement on Services 8th package [AFAS-8], ASEAN-China Free Trade Area 2nd package [ACFTA-2], ASEAN-Australia-New Zealand Free Trade Agreement [AANZFTA], and ASEAN-Korea Free Trade Agreement [AKFTA]). It has been found that the degree of liberalization in terms of the Coverage Index is highest under AFAS-8, which could serve as the focal point for the convergence of the ASEAN+1 FTAs which are positively correlated with AFAS-8. Also, the ASEAN priority integration sectors are making progress (with the exception of transport-related sectors). While the Coverage Index shows rather low levels of commitment by the member countries, a feasible policy suggestion is to further prioritize the priority integration sectors, including transport-related sectors, for a seamless ASEAN Economic Community as well as for a well-connected RCEP.
    Keywords: Trade in services, RCEP, liberalization
    JEL: F13 F15
    Date: 2014–12
  12. By: World Bank Group
    Keywords: Public Sector Corruption and Anticorruption Measures Banks and Banking Reform Governance - Governance Indicators Information and Communication Technologies - ICT Policy and Strategies Macroeconomics and Economic Growth - Knowledge Economy Finance and Financial Sector Development Public Sector Development
    Date: 2014–07
  13. By: Tuyen, Tran Quang
    Abstract: Using data from our own household survey (n=477) in Hanoi's peri-urban areas, this paper attempts to answer (i) what livelihood strategies are pursued by peri-urban households, (ii) which strategies are lucrative and which are not, and (iii) whether access to farmland is the potential barrier to enter remunerative strategies. The paper uses cluster analysis techniques, based on identification of household income shares by source, to provide the first classification of five livelihood strategies pursued by households in Hanoi's peri-urban areas. Income sources and total income are compared across livelihood strategies using Bonferroni pairwise tests and first-order stochastic dominant analysis. The findings of the study show that non-farm income sources mainly contribute to total household income, strategies based on formal wage work and non-farm household businesses are the most remunerative ones and strategies based on farming and informal wage work are the most inferior ones. Factors associated with households' livelihood strategy choice are examined using a multinomial logit model. The findings reveal that farmland is negatively associated with the choice of both high and low return non-farm-based strategies. This suggests that access to farmland is not a potential barrier to enter lucrative strategies. In addition, education of working members has a positive impact on the pursuit of remunerative strategies, implying that better education might shift households away from farming activities. Age of household working members has a negative effect on the choice of wage work-based strategies, suggesting that emerging non-farm opportunities make young workers less interested in farm work. Finally, this paper proposes some policy implications that may help households obtain better livelihood outcomes.
    Keywords: Farmland; cluster analysis; informal wage income; formal wage income; household livelihood strategies
    JEL: I31 Q12
    Date: 2013–11–19
  14. By: Quan Hoang Vuong
    Abstract: This paper represents the first research attempt to estimate the probabilities for Vietnamese patients to fall into destitution facing financial burdens occurring during their curative stay in hospital. The study models the risk against such factors as level of insurance coverage, location of patient, costliness of treatment, among others. The results show that very high probabilities of destitution, approximately 70%, apply to a large group of patients, who are nonresident, poor and ineligible for significant insurance coverage. There is also a probability of 58% that low-income patients who are seriously ill and face higher health care costs would quit their treatment. These facts will put Vietnamese government’s ambitious plan of increasing both universal coverage (UC) to 100% of expenditure and rate of UC beneficiaries to 100% at a serious test. The study also raises issues of asymmetric information and alternative financing options for the poor, who are most exposed to risk of destitution, following market-based health care reforms.
    Keywords: Health insurance; Government policy on health care; Risk of destitution
    JEL: I18 I19
    Date: 2014–12–18
  15. By: World Bank Group
    Keywords: Finance and Financial Sector Development - Microfinance Poverty Reduction - Rural Poverty Reduction Water Supply and Sanitation - Urban Water Supply and Sanitation Finance and Financial Sector Development - Bankruptcy and Resolution of Financial Distress Finance and Financial Sector Development - Debt Markets
    Date: 2014–09
  16. By: Asadul Islam; Chandarany Ouch; Russell Smyth; Liang Choon Wang
    Abstract: This paper examines the long-term effects of exposure to civil war and genocide on the educational attainment and labor productivity of individuals in Cambodia. Given the well-documented causal links between schooling and labor productivity, it is surprising that past studies show that civil conflicts reduce educational attainment, but generally not earnings of individuals. Using variation in the degree of Cambodians’ exposure to civil conflicts during primary school age, we find that disruption to primary education during civil conflicts decreases educational attainment and earnings, increases fertility and has negligible effects on health of individuals several decades later. Our findings suggest that the effect of conflict on schooling disruption has adverse consequences on long-term labour productivity and economic development.
    Keywords: Civil Conflict, Khmer Rouge, Education, Wage, Fertility, Returns to schooling.
    JEL: I21 J24 O12 N35
    Date: 2014–09
  17. By: Liang Jiang (Singapore Management University); Xiaohu Wang (The Chinese University of Hong Kong); Jun Yu (Singapore Management University)
    Abstract: Based on the Girsanov theorem, this paper obtains the exact finite sample distribution of the maximum likelihood estimator of structural break points in a continuous time model. The exact finite sample theory suggests that, in empirically realistic situations, there is a strong finite sample bias in the estimator of structural break points. This property is shared by least squares estimator of both the absolute structural break point and the fractional structural break point in discrete time models. A simulation-based method based on the indirect estimation approach is proposed to reduce the bias both in continuous time and discrete time models. Monte Carlo studies show that the indirect estimation method achieves substantial bias reductions. However, since the binding function has a slope less than one, the variance of the indirect estimator is larger than that of the original estimator.
    Keywords: Structural change, Bias reduction, Indirect estimation, Break point
    JEL: C11 C46
    Date: 2014–12

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