nep-sea New Economics Papers
on South East Asia
Issue of 2017‒07‒23
sixteen papers chosen by
Kavita Iyengar
Asian Development Bank

  1. How Does Monetary Policy Affect Economic Vulnerability to Oil Price Shock as against US Economy Shock? By Razmi, Fatemeh; M., Azali; Chin, Lee; Habibullah, Muzafar Shah
  2. A Spatial Regression Approach to FDI in Vietnam: Province-Level Evidence By Esiyok, Bulent; Ugur, Mehmet
  3. Inequality of opportunities among ethnic groups in the Philippines By Celia M. Reyes; Christian D. Mina; Ronina D. Asis
  4. Spatial dependence in the growth process and implications for convergence rate: Evidence on Vietnamese provinces By Esiyok, Bulent; Ugur, Mehmet
  5. Two scenarios for carbon capture and storage in Vietnam By Minh Ha-Duong; Hoang Anh Nguyen Trinh
  6. Vietnam; Selected Issues By International Monetary Fund
  7. Indigenous knowledge for sustainable livelihoods: Lessons from ecological pest control and post-harvest techniques of Baduy (West Java) and Nguni (Southern Africa) By Korina, Leeja C.; Habiyaremye, Alexis
  8. Foreign Workers, Foreign Multinationals, and Wages after Controlling for Occupation and Sex in Malaysia’s Manufacturing Plants during the mid-1990s By Ramstetter, Eric D.
  9. Vietnam; 2017 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Vietnam By International Monetary Fund
  10. The Rising Cost of Ambient Air Pollution thus far in the 21st Century: Results from the BRIICS and the OECD Countries By Rana Roy; Nils Axel Braathen
  11. Multi-Country Report; Building Fiscal Capacity in Fragile States-Case Studies-Press Release; Staff Report By International Monetary Fund
  12. Evaluation of Recent Development of the AIIB: The 2nd Annual Meeting of the AIIB Held in Korea and its Implications By Lee, Hyuntai; Kim, Junyoung; Oh, Yunmi
  13. The clash of rural-urban migrants and real estate investors on Phnom Penh's housing market: Prospects for garment workers By Buttmann, Vera
  14. What Are the Benefit of Living in Urban Compared to Rural Area (Cases in Great Bandung Area of West Java, Indonesia) By Afni Afiyani, Siti
  15. Anatomy of the Trade Collapse, Recovery, and Slowdown: Evidence from Korea By Lee, Sooyoung
  16. Guyana; 2017 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Guyana By International Monetary Fund

  1. By: Razmi, Fatemeh; M., Azali; Chin, Lee; Habibullah, Muzafar Shah
    Abstract: This paper investigates the role of the monetary policy in protecting the economy against the external shocks of US output and oil price during the 2007-2009 fnancial crisis. It also considers economic vulnerability caused by these external shocks after the crisis abated. The application of the structural vector auto regression model using monthly data from 2002:M1 to 2013:M4 for Indonesia, Malaysia, and Thailand shows that poor influence of monetary policies on monetary policy transmission channels (namely, interest rate, exchange rate, domestic credit, and stock price) in the pre-crisis period could not shield these economies from shocks of oil price and US output. The results of post-crisis period indicate a signifcant increase in the positive impact of monetary policy on channels of monetary transmission channels compared to the pre-crisis period. However, these economies continue to remain vulnerable to oil price shocks.
    Keywords: Monetary Transmission, Global Financial Crisis, Monetary Policy, Domestic Credit, Stock Price, Exchange Rate, Interest Rate, Oil Price Shock, US Economy
    JEL: E00 E4 E44 E49 Z0
    Date: 2017
  2. By: Esiyok, Bulent; Ugur, Mehmet
    Abstract: Foreign direct investment (FDI) flows into Vietnam have increased significantly in recent years and are distributed unequally between provinces. This paper aims to investigate the locational determinants of FDI in 62 Vietnamese provinces and whether spatial dependence is a significant factor that both researchers and policy-makers should take into account. We report that province-specific percapita income, secondary education enrolment, labor costs, openness to trade, and domestic investment affect FDI directly within the province itself and have indirect effects on FDI in neighboring provinces. The direct and indirect effects coexist with spill-over effects and spatial dependence between provinces. Our findings indicate that FDI in Vietnam reflects a combination of complex vertical and export platform motivations on the part of foreign investors; and an agglomeration dynamics that may perpetuate the existing regional disparities in the distribution of FDI capital between provinces.
    Keywords: Foreign direct investment, spatial dependence, agglomeration, Vietnam
    JEL: C31 F23 R11
    Date: 2015–11–23
  3. By: Celia M. Reyes; Christian D. Mina; Ronina D. Asis
    Abstract: This paper contributes to the scant body of literature on inequalities among and within ethnic groups in the Philippines by examining both the vertical and horizontal measures in terms of opportunities in accessing basic services such as education, electricity, safe water, and sanitation. The study also provides a glimpse of the patterns of inequality in Mindanao. The results show that there are significant inequalities in opportunities in accessing basic services within and among ethnic groups in the Philippines. Muslims (particularly indigenous people) are the worst-off ethnic groups while the non-indigenous/non-Muslim groups are the better-off groups. Disparities in terms of literacy rate and access to electricity and sanitation between ethnic groups, however, appear to be narrowing between 2000 and 2010.
    Date: 2017
  4. By: Esiyok, Bulent; Ugur, Mehmet
    Abstract: Existing studies on Vietnamese provinces (e.g., Anwar and Nguyen, 2010) tend to assume that province-specific growth is independent of that in its neighbours. However, many studies analysing regional economic growth in China, Brazil and Mexico report the existence of spatial spill-over effects. This paper investigates whether this is the case for 60 Vietnamese provinces for the time-period 1999-2010, using a system-GMM estimator and a Solow growth model augmented with human and physical capital and spatial lag covariates. We report that spatial dependence is a significant determinant of growth and conditional convergence in Vietnamese provinces. We also demonstrate that the rate of convergence decreases as the distance between neighbouring provinces increases. Given these findings, we recommend testing for spatial dependence in growth models for Vietnam and beyond to avoid omitted variable bias and inform evidence-based regional policies that take account of spatial externalities.
    Keywords: Economic growth; spatial dependence; regional convergence, GMM
    JEL: C1 C18 C5 C51 O4 O47
    Date: 2017–06–15
  5. By: Minh Ha-Duong (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique); Hoang Anh Nguyen Trinh (CleanED - Clean Energy and Sustainable Development Lab - USTH - University of sciences and technologies of hanoi)
    Abstract: Vietnam plans to develop dozens of new coal-fired power generation units over the next 20 years. In order to reduce emissions, it may appear necessary to dispose of these plants' CO2 by burying it in deep underground geological formations instead of releasing it into the atmosphere, using Carbon Capture and Storage (CCS) technology. We show that CCS has a technical potential in Vietnam. To discuss under which economics conditions this potential could actualize, we examine two scenarios for 2050. In the first scenario, CO2 is used in Enhanced Oil Recovery (EOR) only. The second scenario considers CCS deployment in coal-based power plants, on top of using it for EOR. In both scenarios, a few gas-fired CCS power plants are build, reaching 1GW in 2030, supported by Enhanced Oil Recovery and international carbon finance. The decision point where the two scenarios diverge is in 2030. A scenario to switch all currently existing or planned power plants to low-carbon by 2050 is to retrofit 3.2 GW of coal-fired capacity and install 1.2 GW of gas-fired capacity with CCS every year, starting in 2035 for 15 years. Capture readiness would lower the costs of using CCS in Vietnam, but is not mandatory today.
    Keywords: vietnam, energy, scenarios, carbon capture and storage
    Date: 2017–05–24
  6. By: International Monetary Fund
    Abstract: Vietnam: Selected Issues
    Date: 2017–07–05
  7. By: Korina, Leeja C. (Universitas Padjadjaran); Habiyaremye, Alexis (Human Sciences Research Council, South Africa)
    Abstract: With the impending threat of global climate change, the last decades have witnessed an increasing recognition of the potential contribution of indigenous knowledge to tackling global challenges of environmental sustainability. The sources and wisdom of indigenous knowledge have however much more to contribute to global knowledge, well beyond environment conservation and traditional medicine. This paper uses the examples of swidden cultivation, pest control and rice preservation techniques of the Baduy in West Java (Indonesia) and comparable grain pits utilisation by Nguni tribes in Southern Africa to discuss how indigenous sources of knowledge can be an inspiration for greater social cohesion and sustainable livelihoods. It also draws lessons showing that combining indigenous knowledge systems with modern scientific methods can make it possible to achieve results that neither system can do alone.
    Keywords: indigenous knowledge systems, sustainable livelihoods, Baduy community, Nguni tribes grain pits
    JEL: O13 F64 Q15 Q57
    Date: 2017–06–07
  8. By: Ramstetter, Eric D.
    Abstract: This paper investigates the effects of foreign worker shares and MNE ownership on wages after controlling for worker sex and occupation in Malaysian manufacturing plants during 1994-1996, an important period during which use of foreign workers began to increase substantially. In a previous paper, I estimated similar wage equations separately for five occupation groups of both sexes in large heterogeneous samples of plants in many industries and more homogeneous samples of plants in seven industries. Results indicated that use of foreign workers generally had insignificant effects on plant wages for most occupation-sex-(and industry) combinations and that that MNE-local differentials were almost always insignificant in three industries and consistently significant in only one. Although separate estimation by sex and occupation has the strong advantage of accounting for worker characteristics relatively well, it has the disadvantages of complexity (10 results per sample) and being difficult to compare to more common approaches, which use sex and occupation as controls. The primary purpose of this paper is thus to see if using sex and occupation as independent variables generates results that differ from estimating wage equations separately for each sex-occupation cohort. Results suggest that the effects of foreign worker shares differ substantially among foreign worker occupations and among industries. Plants that have relatively large foreign manager shares tend to pay relatively high wages in most industries, but the effects of other foreign worker occupations are usually insignificant or inconsistent. Results that assume all foreign workers impart the same effects thus appear misleading, as do results assuming identical slope coefficients among industries. Similar to previous estimates, MNE-local wage differentials were consistently positive and significant in only two relatively small industries, chemicals and food, in marked contrast to previous results for 2000-2004, which did not account for the effects of foreign worker shares.
    Keywords: foreign workers, multinational enterprise, wages, manufacturing, Malaysia, F22, F23, F66, J61, L60, O24, O53
    Date: 2017–07
  9. By: International Monetary Fund
    Abstract: Vietnam’s dynamic economy continues on a solid growth path, driven by robust domestic demand and export-oriented manufacturing. The new government is pushing ahead with reforms along a broad front, keenly aware of the limited fiscal space, the need to upgrade the growth model at home, and rising risks of economic fragmentation abroad.
    Date: 2017–07–05
  10. By: Rana Roy; Nils Axel Braathen
    Abstract: This paper presents updated results for the cost of ambient air pollution in 41 countries: the 6 major emerging economies known as the BRIICS – Brazil, Russia, India, Indonesia, China and South Africa – and the 35 member-countries of the OECD. It draws on the epidemiological evidence base assembled in the Global Burden of Disease Study 2015, in order to detail results for mortalities from ambient air pollution (AAP) – ambient particulate matter pollution (APMP) and ambient ozone pollution (AOP) – in each of these 41 countries, at successive five-year intervals from 2000 to 2015.
    Keywords: Air pollution, Cost-Benefit Analysis, Mortality, Value of Statistical Life
    JEL: D61 Q51 Q53
    Date: 2017–07–19
  11. By: International Monetary Fund
    Abstract: This paper provides background information for the IMF Board paper on “Building Fiscal Capacity in Fragile States (FS).” It presents case studies on IMF technical assistance (TA) and capacity development in the fiscal area, provided by its Fiscal Affairs Department (FAD), in collaboration with the Legal Department, in the following countries: Afghanistan, Haiti, Kosovo, Liberia, Mali, Myanmar, South Sudan, and Timor-Leste.
    Keywords: Asia and Pacific;Europe;Haiti;Kosovo;Liberia;Mali;Middle East;Myanmar;South Sudan;Sub-Saharan Africa;Timor-Leste;Western Hemisphere;Afghanistan, Islamic Republic of;
    Date: 2017–06–14
  12. By: Lee, Hyuntai (Korea Institute for International Economic Policy); Kim, Junyoung (Korea Institute for International Economic Policy); Oh, Yunmi (Korea Institute for International Economic Policy)
    Abstract: The 2nd AIIB Annual Meeting was held in the Republic of Korea as an international forum to evaluate the operations of the AIIB and discuss short and long-term strategies and challenges. At the Meeting, the AIIB emphasized the keyword "Lean (efficient)" in its business operations, presenting the core principles of its short- to long-term strategy as "Lean (efficient), Clean (ethical) and Green (environment-friendly)" operations. The AIIB is expected to respond to new global challenges by constructing infrastructures, while aligning its operations with the core principles of a lean, clean and green organization, thus aiming to develop into a new type of MDB appropriate for the 21st century. However, in order to develop into such a 21st century MDB model, the AIIB will have to overcome many difficulties. First, the AIIB needs to handle the internal capability problem. Second, the AIIB should overcome the profitability problem. Third, there are the institutional limitations. Fourth, it will be important to control the potential conflict breaking out between member states. Fifth, there is the issue of China's influence. The question of how China exercises its influence will be a measure of AIIB's progress toward a truly international cooperation body. The AIIB is also expected to hold discussions on how to upgrade the existing Bretton Woods system as China-led international financial institutions such as the AIIB, NDB and Silk Road Fund continue to grow. In line with the development of the AIIB, Korea should develop a new infrastructure model that incorporates new global issues such as the 4th industrial revolution, climate change, the digital economy, and sustainable development, proactively present this to the AIIB and encourage the participation of Korean companies in these business projects. In addition, based on its experience with successfully leading infrastructure investments in the past, Korea needs to actively develop infrastructure development projects that contribute to inclusive growth, such as projects that contribute to regional balanced growth, high-quality job creation, and social integration in Asian developing countries. It would also be possible for Korean local governments to utilize their networks of exchange and cooperation with cities and regions in Asian developing countries to jointly develop local infrastructures in these countries.
    Keywords: AIIB; The 2nd Annual Meeting; Sustainable Infrastructure
    Date: 2017–06–30
  13. By: Buttmann, Vera
    Abstract: Housing markets of large cities around the world, particularly in so-called developing and emerging countries, are currently experiencing a clash: On the one hand, large numbers of labour migrants arrive from rural areas and need cheap rental housing. On the other hand, international real estate investment, particularly in the upper market segment, is strong. The resulting mismatch of housing demand and supply increases segregation, marginalises the vulnerable and leads to massive urban development problems. Phnom Penh illustrates this particularly well: Along with Cambodia's rapid globalisation in the last decades, hundreds of thousands of migrants, particularly garment workers, have moved to the capital. Housing for them is insufficient both in terms of supply and quality, though, because Phnom Penh's entrepreneurial mode of governance also attracts many investors, who focus on more profitable and prestigious real estate projects, often linked to speculation. These push land values up and push cheap rental housing further and further outside the city. This study carries out an indepth analysis of the prospects for rural-urban migrant workers on Phnom Penh's investor-driven housing market by firstly outlining both migration and real estate investment trends and by secondly examining the case of garment workers' housing. To complement the scarce literature on the topic, field research and expert interviews have been conducted. From these, an assessment of the status quo, of stakeholders' approaches to it and finally, proposals for action are derived.
    Keywords: housing,real estate investment,entrepreneurial city,urbanisation,ruralurban migration,migrant workers,garment industry
    JEL: F63 F66 L67 R21 R23 R28 R31 R38
    Date: 2017
  14. By: Afni Afiyani, Siti
    Abstract: The mayor of a city will, of course, include in the planning the development of all sectors representing the prime services to citizen. Development programs planned in an urban area are easily fulfilled because they are supported with the budget. Revenue from tax, and others revenues, the government executes the planning. Public facilities are built or maintained as to properly function to serve and to facilitate the citizens.All public facilities areavailable for public in urban. Health facility as hospitals, health centers, Sport centers, education facility consisting of from kinder garden, elementary, high school till higher education are provided and maintained. Some but not many, people who feel unsafe live in rural area due to security ration. This kind of people who have a belief not the same with the belief of the majority in the rural. Primordial belief in rural is sensitive case, some cases is prove the security officer (police) and rural figure person is difficult to control this case. While in city life or urban area, people is rather indifferent in the primordial cases. In rural agricultural life may feel peace and safer.
    Keywords: Agriculture, garden, officer, rural, urban
    JEL: R2
    Date: 2017–07
  15. By: Lee, Sooyoung (Korea Institute for International Economic Policy)
    Abstract: The last decade of the world trade has been marked by an unprecedented collapse, quick recovery, slowdown, another drop, and recovery. To study cyclical and structural aspects of the recent trend of trade, I use both aggregate and disaggregated trade statistics of a small open economy, South Korea, whose economic success and growth have been heavily dependent on exports. The aggregate trend of the country is surprisingly similar to that of the world, which is why the trend of Korea's export is called a proxy for the world. I show that while the last drop of trade after 2015 has cyclical aspects, there is evidence that the continued slowdown from 2012 is structural: (1) the so-called 'China factor' is found in the analysis of trade-income elasticity of the world and China for imports from Korea. (2) The bilateral trade barriers between Korea and its important trading partners are universally tightening. I also show that the firm sizes, destination countries, and the mode of transactions affect disaggregated trade flows during the slowdown periods. It is advisable to diversify main export products to lower the effect of oil prices on export prices and to strengthen the cooperation with ASEAN countries, whose trade barriers have exceptionally diminished throughout the last decade.
    Keywords: The Great Trade Collapse; Trade Slowdown; Trade Elasticity; Trade Barriers; Korea
    Date: 2017–06–15
  16. By: International Monetary Fund
    Abstract: Economic activity continued to expand but growth was uneven. In 2016, subdued agricultural commodity prices, adverse weather conditions and delays in public investment led to a contraction in non-mining sectors. Nevertheless, GDP increased by 3.3 percent buoyed by very large increases in gold output. Increased exports of gold and improved terms of trade helped the current account achieve a surplus of 0.4 percent of GDP from a 5.7 percent deficit in 2015. Guyana is expected to become an oil producer by mid-2020.
    Keywords: Guyana;Western Hemisphere;
    Date: 2017–06–28

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