nep-sea New Economics Papers
on South East Asia
Issue of 2015‒09‒05
33 papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Engendering Liveable Low-Carbon Smart Cities in ASEAN as an Inclusive Green Growth Model and Opportunities for Regional Cooperation By S. KUMAR
  2. Impacts of Japan's FTAs on Trade: The cases of FTAs with Malaysia, Thailand, and Indonesia By ANDO Mitsuyo; URATA Shujiro
  3. Services Productivity and Trade Openness: Case of ASEAN By Shandre Mugan THANGAVELU; Lili Yan ING; Shujiro URATA
  4. Financial Education in Asia: Assessment and Recommendations By Yoshino, Naoyuki; Morgan, Peter; Wignaraja, Ganeshan
  5. Southeast Asia's Long Transition By Coxhead, Ian
  6. Drivers of Financial Integration – Implications for Asia By Nasha Ananchotikul; Shi Piao; Edda Zoli
  7. Migration, gender, and farming systems in Asia: Evidence, data, and knowledge gaps: By Mueller, Valerie; Kovarik, Chiara; Sproule, Kathryn; Quisumbing, Agnes R.
  8. Indonesia embraces the Data Science By Situngkir, Hokky
  9. Does Reserve Accumulation Crowd Out Investments? By Reinhart, Carmen; Reinhart, Vincent; Tashiro, Takeshi
  10. Reflections on a Survey of Global Perceptions of International Leaders and World Powers By Saich, Anthony
  11. Corporate environmental management and GHG emissions changes: Empirical study of multinational automobile companies By Rensfeldt, Arvid; Pariyawong, Vorapat; Fujii, Hidemichi
  12. Human Security in Cambodia: Far From OverHuman Security and Development in Myanmar : Issues and Implications By Thuzar, Moe
  13. The Factors Affecting the Household Energy Consumption, Energy Elasticity,and Energy Intensity in Indonesia By NABABAN, TONGAM SIHOL
  14. The Power of Transparency: Information, Identification Cards, and Food Subsidy Programs in Indonesia By Banerjee, Abhijit; Hanna, Rema; Kyle, Jordan C.; Olken, Benjamin A.; Sumarto, Sudarno
  15. Renminbi Internationalization: The Prospects of China’s Yuan as the Next Global Currency By Edwin Lai
  16. Business as an Actor in Regional Governance: The Case of the APEC Business Advisory Council (Abac) in APEC By Elizaveta A. Safonkina
  17. Thailand: Staff Report for the 2015 Article IV Consultation By International Monetary Fund. Asia and Pacific Dept
  18. International Income Poverty Measurement: Which way now? By Stephan Klasen; Tatyana Krivobokova; Friederike Greb; Rahul Lahoti; Syamsul Hidayat Pasaribu; Manuel Wiesenfarth
  19. Macroeconomic impacts of Universal Health Coverage : Synthetic control evidence from Thailand By Rieger, M.; Wagner, N.; Bedi, A.S.
  20. Philippines: Fiscal Transparency Evaluation By International Monetary Fund. Fiscal Affairs Dept.
  21. Trade in Value Added: The Case of Malaysia By THAM Siew Yean; Andrew KAM Jia Yi
  23. The source of real and nominal exchange rate fluctuations in Thailand: Real shock or nominal shock By Le Thanh, Binh
  24. Is Indonesia Trapped in the Middle? By Haryo Aswicahyono; Hal Hill
  25. Human Security in Singapore: Where Entitlement Feeds Insecurity By Chng, Belinda; Jamil, Sofiah
  26. Estimation and out-of-sample Prediction of Sudden Stops: Do Regions of Emerging Markets Behave Differently from Each Other? By Fabio Comelli
  27. LTV and DTI Limits—Going Granular By Luis I. Jacome H.; Srobona Mitra
  28. The Impact of Cash Transfers on Local Economies By Stephanie Levy
  29. The Leap of the Tiger: How Malaysia Can Escape the Middle-Income Trap By Reda Cherif; Fuad Hasanov
  30. Sukuk pricing dynamics - factors influencing yield curve of the Malaysian Sukuk By Awaludin, Fadhlee; Masih, Mansur
  31. Former Foreign Affiliates: Cast Out and Outperformed? By Beata Smarzynska Javorcik; Steven Poelhekke
  32. Industrial Transformation and Quality of Growth By Hosono, Akio
  33. Sunk Cost as a Self-Disciplining Device By Fuhai HONG; Xiaojian ZHAO

  1. By: S. KUMAR (Asian Institute of Technology)
    Abstract: This paper discusses the status, opportunities, and modalities for engendering liveable low-carbon smart cities in ASEAN as an inclusive green growth model and the opportunities for regional cooperation. Rapid economic growth and increases in urban population in the Association of Southeast Asian Nations (ASEAN) cities will require the consumption of a huge amount of resources which will damage the local and global environment and produce an enormous amount of waste if not handled appropriately. Such environmentally unsustainable growth undermines public health and safety, comfort and liveability, and more importantly is a barrier to achieving global targets for emission reduction. Transforming cities to make them liveable through low-carbon green growth will not only increase the comfort for the city dwellers by improving liveability, but also minimise greenhouse gas (GHG) emissions. Already, initiatives have been taking place in ASEAN to encourage cities to promote green growth through practicing environmental sustainability. Such initiatives are often implemented on a project basis, which are short term and lack a sustaining impact in the region. A well-constructed, city-level, and market-driven framework that allows for participation of all stakeholders and that has a built-in monitoring and evaluation system with well-thought-out measurable indicators to track performance would be useful to systematically transform ASEAN cities. Regional cooperation, such as through facilitating knowledge sharing, has a role to play in strengthening low-carbon green growth development in the region. Therefore, during 2015–2025, the ASEAN Socio-Cultural Community (ASCC) will provide an excellent opportunity to spearhead such activities in a systematic and consistent manner, be a model, and show the world the benefits of low-carbon city development.
    Keywords: : Smart cities, climate change, green growth, ASEAN
    JEL: Q4 Q3 Q28 Q5
    Date: 2015–09
  2. By: ANDO Mitsuyo; URATA Shujiro
    Abstract: This paper examines if Japan's free trade agreements (FTAs) with Malaysia, Thailand, and Indonesia contributed to an expansion of bilateral trade between Japan and its FTA partners, which is the expectation. The results of our analysis do not show significantly positive impacts when the analysis is conducted using aggregate/sectoral trade data. However, expected positive impacts are found for some products, whose tariffs are reduced under FTAs, when the analysis is conducted by using disaggregated trade data at the Harmonized System (HS) 4-digit level. There are also some cases, where expected positive impacts are not found, even where tariff reduction under FTAs was substantial. The authors argue that several factors such as a lack of knowledge of FTAs by traders, high cost of using FTAs, i.e., high cost of obtaining the certificate of origin, and existence of preferential tariff treatment as part of development policies such as investment incentive schemes may be responsible for the lack of positive response of FTAs on trade.
    Date: 2015–08
  3. By: Shandre Mugan THANGAVELU (University of Adelaide); Lili Yan ING (Economic Research Institute for ASEAN and East Asia (ERIA) and University of Indonesia); Shujiro URATA (Waseda University and Economic Research Institute for ASEAN and East Asia (ERIA))
    Abstract: Using fixed effect and Generalised Method of Moments (GMM) estimations, this paper analyses the impacts of trade on the labour productivity of the services sector (at the four key sub-services sector levels: (i) wholesale, retail, and hotel; (ii) transport, storage, and communications; (iii) finance, insurance, and real estate; and (iv) community, social, and personal sectors) for five ASEAN countries—Indonesia, Malaysia, the Philippines, Singapore, and Thailand—from 1990 to 2005. The results show that more exposure to exports will improve labour productivity in the services sector in these countries. Based on input–output relationships, services play an important role as inputs in the manufacturing sector, which is notable in Indonesia, Malaysia, Singapore, and Thailand.
    Keywords: : ASEAN, Services Sector, Labour productivity, Free Trade Agreement, InputOutput
    JEL: F14 F15 F16
    Date: 2015–08
  4. By: Yoshino, Naoyuki (Asian Development Bank Institute); Morgan, Peter (Asian Development Bank Institute); Wignaraja, Ganeshan (Asian Development Bank Institute)
    Abstract: This paper assesses the case for promoting financial education in Asia. It argues that the benefits of investing in financial education can be substantial. Data are limited, but indicate low financial literacy scores for selected Asian countries. As economies develop, access to financial products and services will increase, but households and small and medium-sized enterprises need to be able to use the products and services wisely and effectively. More effective management of savings and investment can contribute to overall economic growth. Moreover, as societies age and fiscal resources become stretched, households will become increasingly responsible for their own retirement planning. Asia’s evolving experience suggests that more national surveys of financial literacy are needed and that coherent, tailored national strategies for financial education are essential for success.
    Keywords: financial education; financial literacy; education investment
    JEL: D14 D18 G21 G28 I25 L26
    Date: 2015–08–24
  5. By: Coxhead, Ian (University of WI)
    Abstract: Southeast Asia's 620m people are experiencing a remarkable transition from widespread poverty to comparative wealth. The region's long-run GDP growth rate is second only to that of East Asia, far ahead of average rates for other developing regions. This rate of economic expansion has been sustained in spite of internal shocks and global market volatility. Tens of millions have been lifted out of poverty as a result. This impressive record contradicts pessimistic predictions from many global growth models. Is Southeast Asia different, and if so in what ways? In the early 21st century the region is undergoing broad and deep regional and global integration with relatively stable macroeconomic conditions. Nevertheless, numerous old problems remain, and new issues have arisen. Sustaining growth and reducing vulnerability to shocks remains a daunting challenge for the future.
    Date: 2014–07
  6. By: Nasha Ananchotikul; Shi Piao; Edda Zoli
    Abstract: Deeper intraregional financial integration is prominent on Asian policymakers’ agenda. This paper takes stock of Asia’s progress toward that objective, analyzing recent trends in cross-border portfolio investment and bank claims. Then, it investigates the drivers of financial integration by estimating a gravity model of bilateral financial asset holdings on a large sample of source and destination countries worldwide, focusing in particular on the role of regulation and institutions. The paper concludes that financial integration in Asia could be enhanced through policies that lower informational frictions, continue to buttress trade integration and capital market development, remove restrictions to foreign flows and bank penetration, and promote a common regulatory framework.
    Keywords: Bangladesh;Bhutan;India;Maldives;Mongolia;Nepal;Philippines;Singapore;Sri Lanka;Thailand;Vietnam;Macao Special Administrative Region of China;Korea, Republic of;Financial integration;regulation, portfolio, investment, portfolio investment, market, bond, Financial Aspects of Economic Integration, General, regulation.,
    Date: 2015–07–17
  7. By: Mueller, Valerie; Kovarik, Chiara; Sproule, Kathryn; Quisumbing, Agnes R.
    Abstract: This paper reviews the literature on migration in Asia, with specific attention given to how gendered migration may influence future agricultural productivity. The first section examines the current body of evidence on the state of international and internal migration, using large-scale datasets that cover several Asian countries. The second section summarizes the findings of an extensive literature review on gendered determinants of migration, employment, and remittances. The third section lays out the gains and losses of migration and discusses the evidence on possible changes in gender roles owing to migration.
    Keywords: gender, women, agriculture, migration, productivity, wages, income, remittances,
    Date: 2015
  8. By: Situngkir, Hokky
    Abstract: The information era is the time when information is not only largely generated, but also vastly processed in order to extract and generated more information. The complex nature of modern living is represented by the various kind of data. Data can be in the forms of signals, images, texts, or manifolds resembling the horizon of observation. The task of the emerging data sciences are to extract information from the data, for people gain new insights of the complex world. The insights may come from the new way of the data representation (function of R(x) over data x), be it a visualizations, mapping, or other. The insights may also come from the implementation of mathematical analysis and/or computational processing (function A(x) over data x) giving new insights of what the states of the nature represented by the data. Both ways implement the methodologies reducing the dimensionality of the data. The relations between the two functions, R(x) and A(x) are the heart of how information in data is transformed mathematically and computationally into new information. The paper discusses some practices, along with various data coming from the social life in Indonesia becoming the variables within R(x) and A(x) to gain new insights about Indonesia in the emerging data sciences. The data sciences in Indonesia has made Indonesian Data Cartograms, Indonesian Celebrity Sentiment Mapping, Ethno-Clustering Maps, social media community detection, and a lot more to come, become possible. All of these are depicted as the exemplifications on how “data science” has become integral part of the technology bringing data closer to people.
    Keywords: data science, complexity, big data, indonesia, network, cartogram, social media, econophysics
    JEL: B4 C02 C15 C4 C5 C54 C6 C8 G0 I2 M0 Z1
    Date: 2015–08–18
  9. By: Reinhart, Carmen (Harvard University); Reinhart, Vincent (American Enterprise Institute); Tashiro, Takeshi (Japanese Ministry of Economy Trade and Industry and RIETI, Tokyo)
    Abstract: It is understood that investment serves as a shock absorber in times of crisis. The duration of the drag on investment, however, is perplexing. For the Asian economies we study, average investment/GDP is about 6 percentage points lower during 1998-2014 than its average level in the decade before the Asian crisis; the decline is greater if China is excluded. We document how in the wake of crisis home bias in finance increases markedly as public and private sectors look inward when external financing becomes prohibitively costly or undesirable from a financial stability perspective. Reserve accumulation involves an official institution (i.e., the central bank) funneling domestic saving abroad and thus competing with domestic borrowers in the market for loanable funds. We suggest a broader definition of crowding out and leakages, driven importantly by rising home bias in finance and by official capital outflows. We present evidence from Asia and advanced European economies with managed currencies to support this interpretation.
    JEL: E20 F30 F40 F50 G15 H60
    Date: 2015–07
  10. By: Saich, Anthony (Harvard University)
    Abstract: A recent survey asks citizens from 30 countries for their views on 10 influential national leaders who have a global impact. There are many rich findings among the data. However, two general trends stand out. The first is that the responses are influenced by geopolitics. Differences between nations and national leaders are clearly reflected in the attitudes of their own citizens. Thus, it is plain that the tensions between China and Japan result in very poor evaluations of China and its leader by Japanese citizens and vice versa. Second, there is a correlation in responses between the nature of the political system and citizen opinions of their own nation's leader. On the whole, in multiparty systems or genuine two-party systems such as in Europe and the US, citizens are more critical of their national leaders and policies than is the case in those nations where politics is less contested. Not surprisingly, given the role that the US plays in global politics, President Obama enjoys the greatest awareness among respondents, receiving the highest percentage in 23 of the 30 countries (see Figure One). With the exception of only three countries, awareness of him exceeds 90%. For the other leaders, awareness tends to be regionally based. Thus, Chancellor Merkel is well known in Europe and Russia but far less so in Africa, Australasia, and Asia. President Xi Jinping is well known in Asia but, perhaps surprisingly, only 48.8% of Russian respondents and 59.8% of Vietnamese respondents were aware of him. This is despite the attempts to build a close relationship between China and Russia and the tensions that have existed between China and Vietnam. Prime Minister Abe is most clearly known in Korea and China but is not well recognized across much of the rest of the world. However, recognition does not mean approval, as opinions about Abe in China and Korea are extremely negative, as we shall see below. The same holds for President Putin who is well known across Europe but viewed poorly. He is less well-known in Africa but citizens of China, Japan, and Korea are well aware of him.
    Date: 2014–12
  11. By: Rensfeldt, Arvid; Pariyawong, Vorapat; Fujii, Hidemichi
    Abstract: This study investigates and compares the financial and environmental performance development of two major car manufacturing companies, Volvo Car Corporation and Hondo Motor Corporation, over the last decade. These two companies consist of one with close historical ties and most of its business in Asia and one mainly located in Europe but that is in the process of expanding production in the Asian region. Using data mainly from corporate reports to perform a decomposition analysis, it is shown that these companies have both undertaken measures to decrease their environmental impacts but in different manners and that Volvo Car Corporation has been more successful in lowering its emissions of greenhouse gas (GHG) over the studied period. The difference in the strategies chosen to reduce environmental impact and the results from the measures taken are believed to have been caused mainly by the innate differences between the European and Asian energy markets, as well as the more stringent demands of stakeholders and legislation in Europe.
    Keywords: greenhouse gas emission decomposition analysis automotive corporation corporate environmental management carbon leakage
    JEL: M14 Q54 Q57
    Date: 2015–08–25
  12. By: Thuzar, Moe
    Abstract: The nexus between human security and development as a workable approach towards inclusive development is gaining prominence. In present-day Myanmar, which is currently undergoing transition and reform, human security needs and challenges are acute, particularly in striving for inclusive and equitable social and economic development in tandem with political stability and national reconciliation. Trust among the different interest groups is a crucial element for moving forward with human security issues. There is a role for inclusive and participatory practices to be instituted in Myanmar’s pursuit of human security in the national development plans. The human security and development approach to assistance programs in Myanmar is thus worth consideration. ASEAN and development partners can leverage on ASEAN’s constructive engagement mechanisms in pursuing this approach in Myanmar.
    Date: 2015–03–27
    Abstract: The purpose of the study is to explore and analyze the factors influencing the consumption, elasticity , and intensity of household energy sector in Indonesia. The estimated variables in this research based on energy and economic indicators in the period of 2000 - 2013. To get the better result, the estimation used a model of a logarithm natural in forms of doublelog and linearlog. The estimation of household energy consumption used doublelog model and the estimation of intensity of final energy per capita used linearlog model . The results based on the simple regression analysis show that variables individually : gross domestic product , the number of population, the number of households , and the final energy consumption per capita has positive and significant effect (α = 1 % ) on the energy consumption of households. The number of population and the number of household are the most dominant variables affect the energy consumption of households. It means the more the number of population and households the higher energy consumption of households. Then individually, variables of gross domestic product , the number of population, the number of households, the final energy consumption per capita has positive and significant effect ( α = 1 % ) on the intensity of final energy per capita . The intensity of final energy per capita in the period of 2000 - 2013 continues to rise, which implies that the price or the cost of energy conversion to gross domestic product to be higher and inefficient . During the period of 2000-2013 the value of elasticity of household energy consumption is less than one (e < 1). It means that household sector has been making use of energy with more efficient .Then during the period of 2000 - 2013 the value of intensity of households energy tends to decrease, it shows that the use of energy households to be more efficient .
    Keywords: final energy, household sector, elasticity, intensity, gross domestic product
    JEL: D1 D12
    Date: 2015–08–13
  14. By: Banerjee, Abhijit (MIT); Hanna, Rema (Harvard University); Kyle, Jordan C. (Columbia University); Olken, Benjamin A. (MIT); Sumarto, Sudarno (SMERU Research Institute)
    Abstract: Can governments improve aid programs by providing information to beneficiaries? In our model, information can change how much aid citizens receive as they bargain with local officials who implement national programs. In a large-scale field experiment, we test whether mailing cards with program information to beneficiaries increases their subsidy from a subsidized rice program. Beneficiaries received 26 percent more subsidy in card villages. Ineligible households received no less, so this represents lower leakage. The evidence suggests that this effect is driven by citizen bargaining with local officials. Experimentally adding the official price to the cards increased the subsidy by 21 percent compared to cards without price information. Additional public information increased higher-order knowledge about eligibility, leading to a 16 percent increase in subsidy compared to just distributing cards. In short, increased transparency empowered citizens to reduce leakages and improve program functioning.
    Date: 2015–03
  15. By: Edwin Lai (Department of Economics, Hong Kong University of Science and Technology; Institute for Emerging Market Studies, Hong Kong University of Science and Technology)
    Abstract: Edwin Lai, Professor of Economics at HKUST and IEMS Faculty Associate, analyzes the current and potential use of the renminbi (RMB) as an international currency, and measures that need to be taken before further internationalization can take place. By exploring the determinants of various invoicing currencies around the Asia-Pacific region and beyond, Prof. Lai projects the potential of the RMB to be used for inter-regional trade invoicing in the Asia-Pacific, and compared this to the actual amount of RMB used for invoicing. His most surprising finding is that, as of the most recent trade invoicing data available (2012), only RMB 84 billion is actually used in trade invoicing, whereas conservative estimates of the RMB’s potential indicate that RMB 760 billion should be used for such invoicing. This represents an 89% gap between actual usage and potential usage. Prof. Lai goes on to provide policy recommendations to assuage the large discrepancy between actual and potential RMB usage, and points to a relaxing of state capital controls, allow more convertibility of the RMB, and reform its financial sector much more deeply, amongst other suggestions.
    Keywords: RMB internationalization, Renminbi Internationalization, Yuan Internationalization, Global Currencies, IMF SDR, Inter-regional trade invoicing
    JEL: F31 F33 F36
    Date: 2015–06
  16. By: Elizaveta A. Safonkina (National Research University Higher School of Economics)
    Abstract: In the modern globalized world new actors, in particular business, exert increasing influence on the international decision-making processes. The business is generally important and influential actor in the regional governance promoting the group`s common interests. The article aims to test this hypothesis drawing on the findings from study of the APEC Business Advisory Council (ABAC). The author analyses the Asia-Pacific business priorities promoted by the ABAC, actions implemented to make other regional actors acting in line with these priorities and ABAC achievements in that process. The official ABAC and APEC documents constituted the evidence base for the analysis. The research methods used in the article include qualitative content analysis and comparative historical analysis. The author comes to conclusion that business is an influential actor in the Asia-Pacific regional governance due to its capability to promote business priorities implementation at the state level.
    Keywords: APEC Business Advisory Council (ABAC), Asia-Pacific Economic Cooperation (APEC), regional governance, actorness, non-state actor.
    JEL: F59
    Date: 2015
  17. By: International Monetary Fund. Asia and Pacific Dept
    Abstract: This 2015 Article IV Consultation highlights that after a sharp contraction in the first quarter of 2014, Thailand’s economy experienced a modest recovery in subsequent quarters, to expand by 0.7 percent in the year as a whole. Inflation decelerated toward the end of 2014 and became negative in January 2015 owing to a sharp decline in oil prices. The recovery is expected to continue in 2015 with growth projected at 3.7 percent on account of some rebound in consumption, including from lower fuel prices, and in private investment as backlogs of project approvals have been largely cleared by various government agencies.
    Keywords: Debt sustainability analysis;Bank supervision;Article IV consultation reports;Energy prices;Economic indicators;Press releases;Staff Reports;Monetary policy;Fiscal policy;Fiscal reforms;Thailand;Subsidies;inflation, debt, investment, monetary fund, exchange
    Date: 2015–05–07
  18. By: Stephan Klasen (Georg-August-University Göttingen); Tatyana Krivobokova (Georg-August-University Göttingen); Friederike Greb (Food and Agricultural Organization, Rome); Rahul Lahoti (Georg-August-University Göttingen); Syamsul Hidayat Pasaribu (Bogor Agricultural University); Manuel Wiesenfarth (German Cancer Research Center, Heidelberg)
    Abstract: In this paper, we critically review conceptual and empirical issues surrounding the derivation of the international poverty line, expressed in PPP-adjusted dollars and linked to various rounds of the International Comparison of Prices (ICP). We find that there are some limitations in the current estimation of these lines, but show that statistically superior methods lead to lines that are relatively robust and confirm the $1.25 using 2005PPPs and suggest $1.67-1.71 using 2011PPPs; they also roughly confirm the current shape of the proposed 'weakly relative' poverty line. Using the new absolute line using 2011 PPPs would lead to substantially lower poverty in our estimation. The extent of the decline depends on whether and how one treats China, India, and Indonesia differently from other countries in the 2005 and 2011 PPPs. More seriously, we note that the dependence on the conceptual and empirical problems associated with the link to successive ICP rounds creates problems that have gotten worse over time so that we suggest that it would be best to consider alternatives to the current reliance on ICP rounds and the resulting PPPs. As a quick fix we propose to fix the international poverty line in national currencies using either the 2005 or 2011 level; in the medium term, we argue for global poverty measurement based on internationally coordinated national poverty measurement.
    Keywords: poverty; World Bank; dollar-a-day; weakly relative poverty
    JEL: I32
    Date: 2015–08–28
  19. By: Rieger, M.; Wagner, N.; Bedi, A.S.
    Abstract: We study the impact of Universal Health Coverage (UHC) on various macroeconomic outcomes in Thailand using synthetic control methods. Thailand is compared to a weighted average of control countries in terms of aggregate health and economic performance over the period 1995 to 2012. Our results suggest that financial protection in Thailand has improved relative to its synthetic counterfactual. While out-of-pocket payments as a percentage of overall health expenditures decreased by 16.9 percentage points, annual government per capita health spending increased by $78. However, we detect no impact on total health spending per capita nor the share of the government budget allocated to health. We find positive health impacts as captured by reductions in infant and child mortality. The introduction of UHC has had no discernible impact on GDP per capita. Our results complement micro evidence based on within country variation. The counterfactual design implemented here may be used to inform other countries on the causal repercussions and benefits of UHC at the macroeconomic level.
    Keywords: macroeconomic impacts, synthetic control approach, Thailand
    Date: 2015–07–27
  20. By: International Monetary Fund. Fiscal Affairs Dept.
    Abstract: This paper discusses the findings of Fiscal Transparency Evaluation on Philippines. Improving fiscal transparency has been a priority in the Philippines over recent years. The government’s public financial management reform strategy has helped initiate a wide variety of reforms, which are beginning to bear fruit. Fiscal reporting is relatively comprehensive, frequent, and timely, with many areas of good and advanced practices. Fiscal risk analysis and management is relatively strong in the Philippines compared with other countries. However, improvements are needed in a few areas, especially to capture of risks from guarantees and public–private partnership, assess the scope of tax expenditures, and introduce a longer-term perspective in the fiscal sustainability analysis.
    Keywords: Philippines;transparency, budget, fiscal transparency, public sector, expenditure
    Date: 2015–06–30
  21. By: THAM Siew Yean (Institute of Malaysian and International Studies (IKMAS), Universiti Kebangsaan Malaysia); Andrew KAM Jia Yi (Institute of Malaysian and International Studies (IKMAS), Universiti Kebangsaan Malaysia)
    Abstract: The paper examines the imported content of Malaysia’s manufacturing sector by using Hummel’s vertical specialisation method and ICT manufacturing as a case study. The main findings indicate an increase in the domestic value added content of Malaysia from 2000 to 2010. When disaggregated within manufacturing, some sub-sectors within the ICT showed a decrease in their imported content whilst others showed an increase. The compressed input–output table showed a decrease in the ICT sector’s use of imported inputs. Using a more detailed classification of the electronics sector, two main shifts can be observed in electronics exports from 2000–2013. First, there was a shift towards finished goods in terms of number of products, but not in terms of export values. Second, there was a shift from Electronics Manufacturing Service (EMS) into Semiconductor Manufacturing Service (SMS) activities. The contraction in the ICT and electronics sector has led to a greater focus on semiconductor manufacturing.
    Keywords: : Vertical specialization, Input-Output table, ICT, Malaysia, Trade in Value Added
    JEL: C67 D57 F1 F14 L63
    Date: 2015–09
  22. By: Pukkanut Peuaksakon; Penporn Janekarnkij Author-Email : (Department of Agricultural and Resource Economics,Faculty of Economics,Kasetsart University,Thailand)
    Abstract: Over the past 20 years, flood and drought in Thailand have impacted up to 2.58 million farming households and caused damages about 6,000 million Baht each year. Various studies have examined natural hazard impacts on the Thai economy and particularly on agricultural sector. Moving towards sustainable development, economic vulnerability to natural hazards should be improved which could be linked to disaster mitigation policies and development. This study aims to explore the Kuznets relationship between economic growth and damages from flood and drought in the Thai agricultural sector using annual data at the provincial levels during 1989-2012. It is hypothesized that as the country becomes wealthier, appropriate development and investment in disaster mitigation could lead to disaster reduction in agricultural sector. Results from the random effect regression support the Kuznets hypothesis in the models for both flood and drought. Precipitation variation increases agricultural damages due to flood and drought significantly. Agricultural damages reduce with rising provincial incomes, increased flood retention area and increased areas for perennial crops.
    Keywords: Flood, Drought, Thai agricultural sector, Environmental Kuznets curve
    JEL: Q54 O44
    Date: 2015–07
  23. By: Le Thanh, Binh
    Abstract: This paper examines the source of exchange rate fluctuations in Thailand. We employed a structural vector auto-regression (SVAR) model with the long-run neutrality restriction of Blanchard and Quah (1989) to investigate the changes in real and nominal exchange rates from 1994 to 2015. In this paper, we assume that there are two types of shocks which related to exchange rate movements: real shocks and nominal shocks. The empirical analysis indicates that real shocks are the fundamental component in driving real and nominal exchange rate fluctuations.
    Keywords: Thailand, real and nominal exchange rates, long run restriction, SVAR
    JEL: F3 F31
    Date: 2015–08–15
  24. By: Haryo Aswicahyono; Hal Hill (Centre for Strategic and International Studies, Jakarta / Australian National University)
    Keywords: Indonesia, Southeast Asia, regional economic integration
    Date: 2015–08
  25. By: Chng, Belinda; Jamil, Sofiah
    Abstract: This paper examines the paradoxical development of Human Security in Singapore. Despite achieving a high level of human security nationwide, the heavy top-down approach has not sufficiently empowered the Singaporean society to independently cope with risks at the community level. The study covers the following areas. First, a brief background on Singapore’s efforts to achieve high levels of human security is presented. Second, we discuss that the downside risks or inadvertent policy implications for human security are the result of uneven access to, or provision of, protection by the state and a lack of empowerment (i.e., actions that enable people to cope with risks). Third, we give a snapshot of the Singapore government’s recent efforts in mitigating the downside risks, particularly after the watershed 2011 general elections. Fourth, the study discusses Singapore’s policies in mitigating transnational human security risks. Given Singapore’s small size and proximity to other states, the city state is aware of its vulnerability and hence needs to take steps to mitigate transnational risks that would have a spillover effect into Singapore.
    Date: 2015–03–30
  26. By: Fabio Comelli
    Abstract: We identify episodes of sudden stops in emerging economies and estimate the probability to observe them. Sudden stops are more likely when global growth falters, risk aversion in financial markets rises, and vulnerabilities in the external and financial sectors increase. However, the significance of the explanatory variables vary across regions. In Latin America and Eastern Europe, gross capital inflows are more responsive to changes in global growth than in Asia. Trade linkages tend to be more important than financial linkages in Eastern Europe, while in Asia and Latin America the opposite is true. The model captures only a third of sudden stops outside the estimation sample, but issues reliable sudden stop signals.
    Keywords: Capital flows;Cross country analysis;Emerging markets;International finance;Parameter estimation;Regional economics;Sensitivity analysis;Sudden stops;gross capital inflows, emerging market economies, emerging market, market, market economies, Models with Panel Data, emerging market economies.,
    Date: 2015–06–25
  27. By: Luis I. Jacome H.; Srobona Mitra
    Abstract: There is increasing interest in loan-to-value (LTV) and debt-service-to-income (DTI) limits as many countries face a new round of rising house prices. Yet, very little is known on how these regulatory instruments work in practice. This paper contributes to fill this gap by looking closely at their use and effectiveness in six economies—Brazil, Hong Kong SAR, Korea, Malaysia, Poland, and Romania. Insights include: rapid growth in high-LTV loans with long maturities or in the number of borrowers with multiple mortgages can be signs of build up in systemic risk; monitoring nonperforming loans by loan characteristics can help in calibrating changes in the LTV and DTI limits; as leakages are almost inevitable, countries strive to address them at an early stage; and, in most cases, LTVs and DTIs were effective in reducing loan-growth and improving debt-servicing performances of borrowers, but not always in curbing house price growth.
    Keywords: Housing;Financial stability;Macroprudential Policy;Central banks and their policies;loan-to-value ratios, debt-service-to income ratios, house price growth, credit growth, credit, loans, loan, mortgage, debt, Financial Markets and the Macroeconomy, Government Policy and Regulation, credit growth.,
    Date: 2015–07–15
  28. By: Stephanie Levy (IPC-IG)
    Abstract: In this special edition of Policy in Focus, leading authors and practitioners present their research on how cash transfers can impact the local economy when implemented in a developing country. The aim is to gather and review research results and evidence, obtained from various methodologies ranging from randomised control trials (RCTs) to village economy models and general equilibrium analysis, applied on small-scale programmes to larger-scale policies in Latin America, Africa and South-East Asia. The economic impact of social transfers is analysed here through their effects on investment, productivity, prices, employment and trade and through more general equilibrium effects of redistributive policies. (…)
    Keywords: Impact, Cash Transfers, Local Economies
    Date: 2015–05
  29. By: Reda Cherif; Fuad Hasanov
    Abstract: Only a few European economies and Korea and Taiwan Province of China reached high-income status during 1970-2010. Malaysia’s real income per capita increased to 26 percent of the U.S. level in 2010 from 20 percent in 1970. Despite relatively strong growth and a substantial improvement in export sophistication, Malaysia’s total factor productivity lagged behind that of Korea and Taiwan Province of China. We argue that what characterizes their experience in contrast to Malaysia’s is the creation of technologies by domestic firms and a push to leapfrog to the technological frontier at an early stage of development.
    Keywords: Industrial policy;Malaysia;Productivity;growth, middle-income trap, innovation, technology, electronics, it, at, technologies, Government Policy, General, Asia including Middle East,
    Date: 2015–06–23
  30. By: Awaludin, Fadhlee; Masih, Mansur
    Abstract: The greater financial integration particularly over the past decade has led to more synchronized movements of financial markets across the globe. As the domestic debt capital market, particularly the Malaysian Government Securities (MGS) and Government Investment Issue (GII or Government Sukuk), shariah compliant Malaysian sovereign papers deepen, the movements of the domestic yield curve are expected to be increasingly influenced by movements in foreign bond yields as both domestic and foreign investors respond to global developments and sentiments. Based on standard time series techniques, our findings tend to indicate that GII as well as MGS are weakly endogenous subject to changes in US Treasury which are most probably transmitted through changing their investment preference and expectation of liquidity and risk premium that they are willing to pay by holding local currency bonds and sukuk. This may create shifting in yield curve and significant capital outflows or inflows that may destabilize financial condition that requires policy changes. Finally, the findings also reaffirmed that the sukuk is still priced based on the conventional way of pricing bonds.
    Keywords: Sukuk, Yield curve; Malaysian Government Securities (MGS), Government Investment Issue (GII); time series techniques
    JEL: C22 C58 E43
    Date: 2015–08–26
  31. By: Beata Smarzynska Javorcik; Steven Poelhekke
    Abstract: The literature has documented a positive effect of foreign ownership on firm performance. But is this effect due to a one-time knowledge transfer or does it rely on continuous injections of knowledge? To shed light on this question we focus on divestments, that is, foreign affiliates that are sold to local owners. To establish a causal effect of the ownership change we combine a difference-in-differences approach with propensity score matching. We use plant-level panel data from the Indonesian Census of Manufacturing covering the period 1990-2009. We consider 157 cases of divestment, where a large set of plant characteristics is available two years before and three years after the ownership change and for which observationally similar control plants exist. The results indicate that divestment is associated with a drop in total factor productivity accompanied by a decline in output, markups as well as export and import intensity. The findings are consistent with the benefits of foreign ownership being driven by continuous supply of headquarter services from the foreign parent.
    Keywords: divestment, foreign direct investment, Indonesia and productivity
    JEL: F23
    Date: 2014
  32. By: Hosono, Akio
    Abstract: This paper aims to gain insights into the interrelationship between transformation and quality of growth with attributes such as being inclusive, sustainable, innovative, secure, and balanced. It draws on case studies regarding four outstanding cases of industrial transformation. This analysis found that quality of growth needs to be discussed in the context of transformation because it features basically in the driving forces of growth, and that the interrelationship between transformation and quality of growth needs to be considered in a holistic manner as a comprehensive target to be achieved. As such, it might be more realistic to design measures to attain the desired attributes of quality of growth alongside the development of specific industries, within which structural transformation is taking place. On the other hand, as the interrelationship between attributes of quality growth and industrial transformation is complex, a comprehensive approach is needed, which pays due attention to macro-economic balance and stability, fiscal balance, synergy, trade-offs, and so on.
    Keywords: quality of growth , transformation , inclusiveness , sustainability , Cerrado , aquaculture , garment , automobile , Brazil , Chile , Bangladesh , Thailand
    Date: 2015–03–27
  33. By: Fuhai HONG (Division of Economics, School of Humanities and Social Sciences, Nanyang Technological University, 14 Nanyang Drive, Singapore 637332); Xiaojian ZHAO (Department of Economics, Hong Kong University of Science and Technology, Hong Kong)
    Abstract: Building on an intra-personal self-signaling game, the paper pro- vides an economic model to show that the sunk cost effect may stem from an attempt to overcome the under-investment problem associ- ated with present bias. The current self may take a costly action (which is a sunk cost for the future self) to signal the individual's ability that motivates his future self-disciplining behaviors. In equi- librium, a higher level of sunk cost gives rise to a higher probability for the individual to continue the project.
    Keywords: Present bias, signaling, sunk cost fallacy, limited memory.
    JEL: D03 D83 Z13
    Date: 2014–11

This nep-sea issue is ©2015 by Kavita Iyengar. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.