nep-sea New Economics Papers
on South East Asia
Issue of 2019‒01‒07
thirty-two papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Systems Dynamics Economic Modelling of the Fiscal Impacts from the Indonesia’s 1st Nationally Determined Contribution (NDC) By Kindy R. Sjahrir
  2. Dynamic Stochastic General Equilibrium With Financial Accelerator: The Case Of Indonesia By Kindy R. Sjahrir
  3. Formulating Regional Competitiveness Fiscal Policy based upon Leverage Factors for Indonesian Data By Kindy R. Sjahrir
  4. Dairy markets and child nutrition in the developing world By Headey, Derek; Martin, William J.; Laborde, David
  5. An Overview of Islamic Banking and Finance in Asia By Komijani, Akbar; Taghizadeh-Hesary, Farhad
  6. A country comparative study of spectrum re-farming: Implication for Thailand By Srinuan, Chalita; Bohlin, Erik
  7. Education and the livelihood of households in the Northwest Region, Vietnam By Quang Tran, Tuyen; Anh Tran, Tai; The Tran, Nu; Thi Nguyen, Hai
  8. Dynamic Website of Gresik City'S Halal Life Style as the Implementation of Online Branding in a Smart City By Nastiti, Tyas Ajeng; Alfina, Alfina; Sisprasojo, Nova Ridho
  9. Fiscal Policy and Development; Human, Social, and Physical Investments for the SDGs By Vitor Gaspar; David Amaglobeli; Mercedes Garcia-Escribano; Delphine Prady; Mauricio Soto
  10. The Social Capability Index and Income Convergence By Palacio, Andrés
  11. Talent Management in Asia-Pacific Region: How Not to Lose Global Competition for Talents By Veselova, A.; Latukha, M.; Veselova, L.
  12. Policy Reforms on Poultry Industry in Indonesia By Ferlito, Carmelo
  13. Sharia hotels in Indonesia: Concept and potential analysis By Mujahidin, Muhamad
  14. Aerial Bombardment and Educational Attainment By Le, Kien; Nguyen, My
  15. PEMBIAYAAN BANK SYARIAH By Naendhy Sunaendy, Lilla Fadhilah
  16. "Geo-Political Economy" and Ecosystem in Asian I&CT Markets By Kawamata, Takahiro
  17. Influence of High-Speed Railway System on Inter-city Travel Behavior in Vietnam By Tho V. Le; Junyi Zhang; Makoto Chikaraishi; Akimasa Fujiwara
  18. Linked in by foreign direct investment: The role of firm-level relationships in knowledge transfers in Africa and Asia By Carol Newman; John Page; John Rand; Abebe Shimeles; Måns Söderbom; Finn Tarp
  19. Mild-explosive and Local-to-mild-explosive Autoregressions with Serially Correlated Errors By Lui, Yiu Lim; Xiao, Weilin; Yu, Jun
  20. The Impact of Public Governance on Household Income: A Quantile Panel Analysis By Quang Tran, Tuyen; Doan, Tinh; Vu, Huong; Nguyen, Hien
  21. Employment Creation in Non-Agricultural Sectors By Isabelle Tsakok
  22. Using Deep Neural Network to Analyze Travel Mode Choice With Interpretable Economic Information: An Empirical Example By Shenhao Wang; Jinhua Zhao
  23. Changing male perceptions of gender equality: Evidence from an experimental study By Cuong Nguyen; Finn Tarp
  24. Husbands’ and wives’ diverging perceptions on who decides By Panu Poutvaara; Maximilian Schwefer
  25. Multitask Learning Deep Neural Network to Combine Revealed and Stated Preference Data By Shenhao Wang; Jinhua Zhao
  26. Will the Emerging Market Turmoil be Contained By Uri Dadush; Hamza Saoudi
  27. The Economics of Fertilizer Subsidies By Holden, Stein T.
  28. Regulating for Telecommunications Competition in Developing Countries: the case of Papua New Guinea By Howell, Bronwyn E.; Potgieter, Petrus H.; Sofe, Ronald
  29. Financial Inclusion and Macroeconomic Stability in Emerging and Frontier Markets By Vo, A.T.; Van, L. T.-H.; Vo, D.H.; McAleer, M.J.
  30. Public Safe Assets Determination By Hung Ly-Dai
  31. International Capital Flows in Club of Convergence By Hung Ly-Dai
  32. Non-Linear Pattern of International Capital Flows By Hung Ly-Dai

  1. By: Kindy R. Sjahrir (Fiscal Policy Office, Ministry of Finance. Republic of Indonesia)
    Abstract: The Indonesian commitment has been declared in negotiations in the Conference on climate change (COP24) in Katowice, Poland, December 2-14, 2018. It is estimated that around 45,000 delegates from 197 countries attended the United Nations Session discussing status and efforts to control the impact of climate change in the world. The Indonesian delegation is ready not only for negotiation but also for "soft diplomacy" that Indonesia has made much progress in the implementation of the Paris Agreement on climate change. The Paris Agreement is implemented in Indonesia through cooperation of all concerned. The Indonesian Government is consistent with its commitment to bring down the greenhouse gas emission and the program of adaptation to climate change as mentioned in the document of Nationally Determined Contribution (NDC) as a product of the Paris Agreement. Indonesia also has ratified the Paris Agreement. Through NDC, Indonesia is committed by itself to reducing Green House gas emission by 29 percent in 2030 and with international cooperation by 41 percent. Data in 2016, Indonesia succeeded in reducing gas emission by 8.7 percent through various sectors. In 2017, the reduction already reached 16 percent – according Ministry of Forestry and Environment. In reaching the 29 percent target Indonesia has good modality in fulfilling NDC commitment, this paper reports the fiscal capacity in achieving Indonesia’s NDC. The important role of budgetary finance in providing funding according scenarios related to climate change and the development of a green economy is nonetheless crucial to consider the stability of the state's financial condition in order to remain in a prudent condition sustaining drive for other sectors of economic growth and equity. This study developed a system dynamics economic model to explore impacts of implementing National Determined Contribution (NDC) to fiscal space using Indonesian data. The exploration includes (1) finding the financial capacity of the country at the baseline; (2) finding the state of the fiscal balance in applying funding policies for climate change-based activities; (3) finding the most effective climate change scenarios to be financed by the state. Simulation results show that climate change financing does not significantly impact state finance. Indonesia's revenue growth can still overcome the influx of financing needs for climate change. Thus, through this model, it can be concluded that the national budget is still in capacity to finance the needs for climate change’s 1st NDC.
    Keywords: Fiscal Policy, Systems Dynamic, Indonesian Data
    JEL: G28
    Date: 2018–12
  2. By: Kindy R. Sjahrir (Fiscal Policy Office, Ministry of Finance. Republic of Indonesia)
    Abstract: In the last two decades shows that the Indonesian macroeconomic instability has found its roots from the financial sector's (banking's) pro-cyclicality. A number of economic and financial crisis preceded pro-cyclicality level of the financial sector in Indonesia is quite high. Indicators of real credit growth faster than GDP in the period of expansion, and the decline is far greater than the decline in GDP in the period of contraction is indicative of the high pro- cyclicality. This paper manuscript look neutrality or differences in response to the impact of fiscal and monetary policy mix as a result of the calculation of the non-conformance of the business cycle, both of which exist in the prior period as a result of the policy or the policy itself as a research problem. Neutrality impact of the response of fiscal and monetary policy mix in Indonesia in 2013 is a strategic issue of management of economic stability. With the high pro-cyclicality, then the policy is not precisely calibrated to the updated business cycle in the period may have the effect of turbulence. Fiscal policy has the potential to affect the business cycle. Monetary policy has the potential to support the stability of the financial system through its ability to affect the financial condition and behavior of financial markets, through the transmission company and the bank's balance sheet and risk-taking behavior. However, the condition of the financial system also has the potential to influence monetary stability. This paper research aims to (1) identify, analyze, and explain the phenomenon of complications response of fiscal and monetary policy mix in Indonesia; and (2) assess the methods applied to modeling the business cycle of macroeconomic stabilization policy mix that is more suitable for Indonesia as a small-open-economy in the condition (state) of stochastic uncertainty of the external economy. Finally, the results of this study recommends a systematic policy of intervention in the foreign exchange market through the feedback rule is a policy that is superior to every framework of the monetary policy rule. This is an appropriate reason for the stylized facts governance of the exchange rate as a basis for modeling framework of a small open economy with the data Indonesia. Results of this research with the data Indonesia would be generalized for the modeling framework of small open economy, provided that endogenous risk premium depends on the level of debt.
    Keywords: Dynamic Stochastic General Equilibrium, New Keynesian Macroeconomics, Monetary Policy, Fiscal Policy, Financial Sector Accelerator, Macroeconomic Policy Mix, New Keynesian Macroeconomic, Dynamic Stochastic General Equilibrium, Financial Friction, Macroeconomic Policy Mix,, Macroprudential
    JEL: G28
    Date: 2018–12
  3. By: Kindy R. Sjahrir (Fiscal Policy Office, Ministry of Finance. Republic of Indonesia)
    Abstract: Given Indonesia's competitiveness version of the Global Competitiveness Index (GCI) released by the World Economic Forum (WEF) has dropped from 38 in 2013-2014 to 41 in 2015-2016, the right strategy is needed so that competitiveness is not continues to decline. Indonesia's geographical condition consisting of 13,000 islands requires increased regional competitiveness to improve national competitiveness. The Regional Economic Governance Index i.e. Tata Kelola Ekonomi Daerah (TKED) as an indicator of economic management in the area of the Regional Autonomy Monitoring Committee (KPPOD) is an example of a proxy option for measures of regional competitiveness. The LEG index compilation methodology is similar to the World Bank's GCI index and Ease of Doing Business (EoDB), so this paper forms the premise that increasing and correcting the LEG index imbalance through the Regional Incentive Fund (DID) will boost regional competitiveness and also lift power Indonesia's global competitiveness. Fiscally, regional competitiveness is also marked by the expansion and deepening of the tax base. The framework of changes in this text is to transform the Macroeconomic Policy - Principal of Fiscal Policy (KEM-PPKF) which originally only targeted high economic growth and equitable distribution of income at the national level with an output orientation to change competitiveness-quality economic growth to the regional level with outcome orientation. To target increasing regional competitiveness, synchronization of central and regional budgeting will be carried out to transform the regional competitiveness criteria in the Regional Incentive Fund and encourage more efficient and accountable regional spending by synchronizing central and regional budgeting data through DID allocations and the synergy of centralized data exchanges. This paper was carried out with the approach of (1) robust study of regional leveraging factors, (2) sharpening of fiscal policy reforms and central-regional budgeting synergies, and (3) the conventions of all stakeholders in the Ministry of Finance's bureaucratic reform. This paper considers Sims (2008) 's argument that strong policy making requires that policy models be treated as "robust models" which include features (1) based on a standard theory or law, (2) can be supported by valid data, and (3) consistently giving the same results. Based on the results of data processing and regression using panel model, some conclusions are obtained. Provincial TKED affects productivity (measured using TPF). In general, the increase in provincial TKED will increase productivity, namely in Management with regard to (1). Land Access (Access); (2). PPUS; and (3) Infrastructure. This proves that good management or local governance will increase productivity. Most of the increase in the TKED index will increase economic productivity. It was confirmed that the outcomes that region with good TKED, yet currently incurring TFP gap have a great potential to boost its GRDP growth should it be assisted thru additional DID (Dana Insentif Daerah) within budgetary allocation processes.
    Keywords: Fiscal Policy, Indonesian Data
    JEL: G28
    Date: 2018–12
  4. By: Headey, Derek; Martin, William J.; Laborde, David
    Abstract: Dairy is an exceptionally nutrient-dense food of immense importance to healthy growth in early childhood. However, dairy consumption among young children is strikingly low in many parts of Africa and Asia. This paper attempts to explain this puzzle, focusing on the obvious roles of income/wealth and prices, and the less well understood roles of lactose intolerance, cattle ownership, nutritional knowledge, water quality, and refrigeration. We find evidence suggesting that all of these factors might account for differences in dairy consumption across countries, although the disparity in dairy prices between low and high consumption countries is particularly large and puzzling, given the tradability and relative affordability of powdered milk. We therefore develop a novel trade analysis to understand why dairy prices are so high, especially relative to staple cereals, and illustrate how comparative (dis)advantage in dairy is often poorly aligned with pricing policies. We conclude the paper by highlighting unresolved research questions in this complex puzzle, including the need to learn from countries that have been able to drastically improve dairy consumption, including those with little tradition of dairy consumption such as Thailand and Vietnam.
    Keywords: Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, Food Security and Poverty
    Date: 2018–12–20
  5. By: Komijani, Akbar (Asian Development Bank Institute); Taghizadeh-Hesary, Farhad (Asian Development Bank Institute)
    Abstract: The Islamic finance industry has grown substantially in Asia over the last 2 decades. The Muslim populations in different Asian countries, especially in Southeast Asia, are increasing. Rapid Muslim population growth and improving living standards may enhance the popularity of Islamic finance as a keen alternative to conventional financing mechanisms. In addition, investors from the Middle East and Asia are increasingly seeking to invest in products that are in line with their religious beliefs. The governments and financial authorities in several Asian countries have played active roles in promoting the development of Islamic financial markets in line with the efforts to boost investments and achieve sustainable funding to enhance economic growth by tapping the huge liquidity from oil- and commodity-producing countries. The ethical character and financial stability of Islamic financial products may increase their attraction. Islamic financial products have an ethical focus (notably excluding investment in alcohol and gambling) with a risk profile that appeals to wider ethically conscious investors. Given that in Islamic banking returns on investments are based on underlying economic activities and/or assets that structure the contractual relationship between transacting parties, it is possible to use the asset-based nature and risk-sharing aspects of Islamic finance for greater integration with the real economy and to improve the overall economic balance between the real and the finance sector.
    Keywords: islamic banking; Islamic finance; Muslim finance; Muslim banking; sukuk; mudarabah
    JEL: F30 G02
    Date: 2018–07–26
  6. By: Srinuan, Chalita; Bohlin, Erik
    Abstract: With the latest advances in mobile broadband brought by UMTS, HSDPA, and LTE, all radio communications make use of a highly regulated resource. Specific portions of that spectrum are allocated for use by competing uses, and it is a scarce and expensive resource. To deal with this scarcity, some countries have changed legislation so that other services can use portions of the spectrum initially allocated to a different service/technology. This is called re-farming: repurposing a frequency that was initially allocated to one technology for another one. Re-farming is a cost-effective way to increase capacity for mobile use without the need for market players to apply for new spectrum. This issue is becoming crucial and important for the national regulatory body in every country including Thailand to manage their scare resource with fair and clear rule. With the exponential growth in mobile broadband (MBB) services in Thailand, it places enormous demand on the need to expand the capacity of the MBB sites with the available spectrum resources. Most often, there is a dire need to acquire additional spectrum to fulfill the demand in capacity growth. Spectrum auction prices are very expensive in principle; hence operators need to maximize the available spectrum resources for better utilization. To accelerate the 3G&4G network, spectrum re-farming is needed in Thailand. This study aims to explore the similarity and difference of the objective, spectrum target and approach of spectrum re-farming in the selected countries from each region which are USA, Germany, France and Australia. Public consultation documents and related literature were used for data collection in the selected country. Additional qualitative method which was focus group was employed for data analysis in Thailand. Experience of re-farming from selected countries is expected to provide lessons for the Thai national regulatory authority (NRA) in terms of improving quality of service and coverage and create a fair competition environment among service provider.
    Keywords: Spectrum re-farming,Comparative study,Thailand
    Date: 2018
  7. By: Quang Tran, Tuyen; Anh Tran, Tai; The Tran, Nu; Thi Nguyen, Hai
    Abstract: Using the updated data from the 2016 Vietnam Household Living Standard Survey, this study examines the role of education in the livelihood of households in the Northwest Region, the poorest region in Vietnam. Our micro-econometric analysis shows that education has a positive effect on choosing better livelihoods, on household income and poverty reduction, even after controlling for all other factors in the models. However, our quantile regression analysis reveals that the returns on education are substantially heterogeneous across percentiles of income distribution and tend to be higher for better-off households. This implies that education has an increasing effect on within-level income inequality. The finding suggests that a conventional approach employing only mean regression to study the effect of education on income could miss heterogeneity of interest to policymakers.
    Keywords: education; heterogeneous; inequality; rural livelihoods; quantile regression
    JEL: I2 I25 I28
    Date: 2018–04–09
  8. By: Nastiti, Tyas Ajeng; Alfina, Alfina; Sisprasojo, Nova Ridho
    Abstract: Understanding potential of a city can be defined by some indicators. One of them is by identifying six indicators that well known as Nation Brand Hexagon. Nation Brand Hexagon are: People, Tourism, Exports, Governance, Investment and Immigration, and Culture and Heritage. By understanding and identifying those six indicators, a city can be more understand about its potential and developing it into City Branding activity. City Branding is the use of marketing techniques to give a City a unique identity in the minds of citizens, visitors, companies and investors. The needs of City Branding for a certain city or area is currently being a marketing strategy that often work effectively. The result of an effective City Branding is particularly giving a profit and a significant increase of economy value. Gresik City (older spelling: Grissee); (Javanese: Nggersik) is a regency within East Java Province of Indonesia. It includes the offshore Bawean Island, some 125 km to the north of Java and Madura. The regency's administrative center is the town of Gresik, about 25 km to the northwest of Surabaya City. Gresik City is known as a city which having a charm of Moslem religion tourism. A lot of activities based on Moslem religion in the city. The total population of 1,2 million people made Gresik City as plural cultures and also producing some products that contain high spiritual value. Beside, Gresik City is also being a city who has many industrial activities. In 2010, Gresik City's income is being the most higher in East Java. Even, the average labour's income in Gresik City is also most higher than other cities in East Java. In 2017, have been done the identification of Nation Brand Hexagon against GresikCity. As for the method that been done is through the Observations, Focus Group Discussion, as well as In-depth Interviews. Through the method of Focus Group Discussion that bring representatives of businessmen/Artists, Government, Academia, and Communities; formulated a mapping of Halal Activity in Gresik as Halal Activity octagon or 8 activities of Halal in Gresik which include : Culinary, Religion Tourism, Art, Fashion, Product and Service, Movement, Education, and Culture. As the continuity of City Branding activity in Gresik, Halal Activity octagon is being core of communication that aimed at outlining potential of Gresik City. City Branding strategy nowadays is not only a forming of City's identity but also representing the identity of digital media that contain a lot of human interaction. By using the technology and internet access, it is possible to build an dynamic website that contain Halal Activity Octagon's information, including: research, text, documentation, people who involve, etc. Dynamic website is a platform that make a possibility of two way interaction between both website's maker and user; or user and user. The function of the website is not only as the center of information about the City, but also as the promotional tools and media, marketing tools and media, and digital data of the City. By having a dynamic website, it will be easier to do some measurement about the city, such as: about satisfying, suggestion, and also the value of economy by numbers and data. In this particular research, will be done some analysis about the effectivity of mapping's projection of Gresik City's Halal Activity based on dynamic Website according to answer: the society's need and want, effective marketing, and access. The result of research is an integrated system about City Branding activity based on dynamic website that can be mapped from upstream to downstream. Moreover, this research also wished to create an innovation regarding of center of information about City's potential that can be the open bank data and can be accessed by anyone without any time and distance limitation.
    Keywords: Branding,Gresik,Dynamic Website,Smart City
    Date: 2018
  9. By: Vitor Gaspar; David Amaglobeli; Mercedes Garcia-Escribano; Delphine Prady; Mauricio Soto
    Abstract: The goal of this paper is to estimate the additional annual spending required for meaningful progress on the SDGs in these areas. Our estimates refer to additional spending in 2030, relative to a baseline of current spending to GDP in these sectors. Toward this end, we apply an innovative costing methodology to a sample of 155 countries: 49 low- income developing countries, 72 emerging market economies, and 34 advanced economies. And we refine the analysis with five country studies: Rwanda, Benin, Vietnam, Indonesia, and Guatemala.
    Keywords: Sustainable Development Goals (SDG);Development;Fiscal policy;Sustainable Development Goals; Fiscal Policy
  10. By: Palacio, Andrés (Department of Economic History, Lund University)
    Abstract: Domestic social capabilities are a set of national characteristics for understanding why some countries grow faster than others. Yet there is no clear agreement on the main characteristics of these capabilities and therefore they have been neglected in the income convergence debate. The paper presents an index for revisiting the role of social capabilities in this debate. A relatively socially advanced society is more likely to improve the prospects of income convergence. The index is restricted to 4 capabilities: diversify the economy (transformation), distribute the benefits of growth (inclusion), control price inflation (autonomy) and provide public goods (accountability). Using a sample of 27 countries from Africa, Asia and Latin America over the period 1990-2010, we show that this set of capabilities is related to income growth and to long run performance in manufacturing. The index confirms the consolidation of the East Asian tigers and the rise of China, but the laggard performance on India. Indonesia represents the median in the index, surrounded by Latin American countries like Venezuela and Brazil. In the African context, we see Mauritius standing further away from Ethiopia, South Africa and Nigeria.
    Keywords: catching up; income gap; social capabilities; ranking; developing countries
    JEL: O47
    Date: 2018–12–21
  11. By: Veselova, A.; Latukha, M.; Veselova, L.
    Abstract: The paper discusses talent management practices in companies from three most influential Asia Pacific economies: China, India and Korea. Being parts of the Asian-Pacific region, these countries are much devised in terms of economic growth and cultural background. We elaborate country-specific talent management practices and discuss regional trends as background for effective management of talent. Chinese and Indian talent management practices are similarly focused on financial incentives, training and development, as well as, performance management and fast-track promotion. In China and India the use of workplace-based voluntary benefits to incentivize employees is found to be especially efficient. In contrast to Indian and Korean companies, Chinese companies are still more attentive to employees’ living conditions and their social life. While Korean companies are less mindful about financial appraisal of their employees, but have a stronger focus on comfort internal environment associated with harmony and trust.
    Keywords: Asia, China, emerging markets, India, Korea, talent management,
    Date: 2018
  12. By: Ferlito, Carmelo
    Abstract: The Indonesian poultry industry is a key sector for the national economy, supplying 65% of all animal protein and employing 10% of the national labour force. All over the country, though local production successfully copes with domestic demand, the potential for growth is high, consistent with expectations of rising GDP per capita. The market looks healthy and attractive, which has resulted in this gradual entry of new foreign groups. In past decades, the production process has evolved and modernized. The market is dominated by five main players—three foreign companies operating in feed production and two in day-old chick production. Even though expectations for the industry are strongly positive, prices for both broiler chicken and eggs are consistently higher in Indonesia than in Europe and America. From March– October 2018, Indonesian broiler chicken meat cost an average of about IDR 40,500/kg, while in the EU the price was around IDR 32,600 /kg (+24%). Over the same period, the average egg price in Indonesia was around IDR 28,000/kg, compared to just above IDR 21,000/kg (+33%) in the EU. The differences in price are partially due to differences in demand and supply— Indonesia is a Muslim country, so the demand for chicken meat may be stronger than in countries with higher pork consumption. However, Indonesia’s higher prices are surprising given lower production costs. In Indonesia, farm salaries are lower than in Europe. In addition, the EU banned egg layer battery cages in 2012, forcing layer farmers to decrease bird density and therefore to implement more expensive methods of production, pushing up egg production costs. So production costs are higher in the EU, but consumer prices are lower. Price differences can also be explained in part by general market conditions in the EU and Indonesia. While the European market is a mature one, the constant growth in Indonesia, supported by growing demand, is an important element keeping prices high. While many economic factors are out of Indonesia’s control, prices are also affected by Indonesian public policy. Therefore, we propose policy modifications that aim to support sound growth of the industry, which might be accompanied by lower prices. The first important act would be to resolve conflicts between existing regulations, in particular between Regulation of the Minister of Trade (MOT) 21/2018 and Regulation of the Minister of Agriculture (MOA) 57/2015 on the ministerial recommendation letter for maize import and maize import rights. Our second suggestion, related to MOA 26/2016, is to liberalize parent stock1 imports, enabling poultry producers to more freely implement sound entrepreneurial strategies rather than relying on incorrect government estimations. At the same time, we believe that it is necessary to open Indonesia to the international market for maize, rather than using trade protections to force local production. Current regulations have driven domestic maize prices incredibly high compared to the international price. Since maize is the main component of poultry feed, and feed is in turn the major cost in Indonesian poultry production, free access to international markets would heavily and positively affect production costs in the poultry industry, helping prices to cool down. Finally, the government could play an important role in improving infrastructure, which, at the moment, burdens the industry—particularly in the case of transporting raw materials for feed from the ports to the mills. An improvement in road infrastructure would also allow the transport of heavy machinery, further boosting modernization of the poultry industry.
    Keywords: Poultry market,Indonesia,Political Economy,Free Trade
    JEL: O13 P16
    Date: 2018
  13. By: Mujahidin, Muhamad
    Abstract: This article describes the concept and analysis of potential sharia hotels in Indonesia. Using a phenomenological approach, this study concludes that sharia hotels have become part of the halal tourism industry and the need for Muslim communities in Indonesia in the future.
    Keywords: Hotel, Halal Tourism, Sharia Tourism, Sharia Hotel
    JEL: L83 N53 Q57 Z12 Z13
    Date: 2018–12–15
  14. By: Le, Kien; Nguyen, My
    Abstract: This paper provides evidence that the Allied bombing of Vietnam, the longest and heaviest aerial bombardment in the history, imposed detrimental effects on educational attainment of school-age individuals. By exploiting the plausibly exogenous district-by-cohort variation in bomb destruction under a difference-in-differences framework, we find that an increase in bomb intensity leads to significantly fewer educational years completed by school-age children exposed to the bombardment. A series of robustness checks, falsification tests, and the instrumental-variable strategy further support our results. The findings underline the importance of policies targeting children after wartime.
    Keywords: Vietnam War, large-scale destruction, aerial bombardment, human capital
    JEL: I20 I21 J24
    Date: 2018–12–21
  15. By: Naendhy Sunaendy, Lilla Fadhilah
    Abstract: This paper aims to describe more deeply the understanding of Islamic bank financing. As a country that is predominantly Muslim, it should be expected that the presence of Islamic banks in Indonesia is something to be expected. A bank is an industry that operates in the field of trust, which in this case is a financial intermediary between debtors and creditors. Islamic banks function as intermediary institutions, which function to collect funds from the community and redistribute these funds to the people who need them in the form of financing. namely to collect funds from the community and redistribute these funds to the people who need them in the form of financing. Financing is the largest source of income for Islamic banks, but at the same time is the biggest source of risk for business operations. Therefore, these funds must be used correctly, fairly, and must be accompanied by bonds and clear conditions that are mutually beneficial for both parties.
    Keywords: Islamic banks, financing.
    JEL: K12 K40
    Date: 2017–05–13
  16. By: Kawamata, Takahiro
    Abstract: Since the East Asian Miracle report was published by the World Bank in 1993, East Asian countries have achieved economic development with the "flying geese pattern" respectively as well as advancements in informatization based on each political and cultural context. In particular, the revolution in information and communications technology (I&CT) drives commercial and social usage of the Internet throughout multiple devices such as personal computers, tablets, and smart-phones. East Asian cultural contexts thereby create commonalities over their territories and maintain their distinctive characters as well. While telecommunications and media industries are under governmental control, with government regulations in most Asian countries, platform businesses such as social network services (SNSs), have expanded across borders, demonstrating the principle of network externality and economy. In addition, cultural and/or social contents easily expand with identity and universality as high culture and with popularity as pop- and/or sub-cultures among younger generations within areas. This paper examines the potential of East and South East Asian markets including not only China, Korea, and Japan, but also Taiwan, Hong Kong, and Singapore, for mobile and wired communications, their technologies, services, content, and applications. It also describes the dynamism of networking among interested players over the next generation of information and communication technologies and their applications, such as SNSs and "FinTech", including mobile payment and e-commerce, as well as content including audio and visual content, and game software; in the context of the "Ecosystem" of I&CT business and the path-dependency of social shaping of technological trajectories as enhanced in each political and cultural territory. There may be a dramatic change occurring in the structure of the industry affecting not only telecommunications network components, terminal equipment vendors and software developers, but also network operators and service providers located in Asian territories. Therefore, our analysis places emphasis on the dynamic formulation of multi-tiered and multifaceted frameworks of "Geo-Cultural Informatics," which encapsulates the geo-politics and geo-economics associated with cultural informatics, within industrial clusters over Asian marketplaces. This paper also suggests a new framework of market structure with some hieratic layers and geographic areas, e.g. living area (space) 「生活圏」, commercial area (sphere)「商業圏」, economic zone (block)「経済圏」. These areas/spheres are composed with cultural and political inherence based on geography and history respectively as well as path-dependency on technological and institutional trajectory. Especially electronic commerce (e-commerce), which is not only the trade of digital contents and services, but also online shopping with digital payment/settlement, e.g. electronic money and credit card authorization including PayPal, reflects cultural contexts and/or political institutional frameworks, even if the compatibility and settlement system between nations has been ensured. In the e-commerce facilitated by FinTech, it can be seen the battles and/or alliances between Internet service providers, e.g. (US), Alibaba (CN), Tencecnt (CN), Kakao Talk (KR), LINE (JP), Facebook (US), Twitter (US), Instagram (US), and local providers, and financial providers, including credit card companies, banks, insurance and securities companies, for customer's accounts and records of their preferences and assets. We finally discuss on the geo-political economic issues of the digital economy in Asian living/commercial/economic areas/spheres within the ecosystem of ICT.
    Keywords: Evolution of Technology,Ecosystem of industries,Geo-politics,Geo-economics,"Geo-cultural informatics"
    Date: 2018
  17. By: Tho V. Le; Junyi Zhang; Makoto Chikaraishi; Akimasa Fujiwara
    Abstract: To analyze the influence of introducing the High-Speed Railway (HSR) system on business and non-business travel behavior, this study develops an integrated inter-city travel demand model to represent trip generations, destination choice, and travel mode choice behavior. The accessibility calculated from the RP/SP (Revealed Preference/Stated Preference) combined nested logit model of destination and mode choices is used as an explanatory variable in the trip frequency models. One of the important findings is that additional travel would be induced by introducing HSR. Our simulation analyses also reveal that HSR and conventional airlines will be the main modes for middle distances and long distances, respectively. The development of zones may highly influence the destination choices for business purposes, while prices of HSR and Low-Cost Carriers affect choices for non-business purposes. Finally, the research reveals that people on non-business trips are more sensitive to changes in travel time, travel cost and regional attributes than people on business trips.
    Date: 2018–12
  18. By: Carol Newman; John Page; John Rand; Abebe Shimeles; Måns Söderbom; Finn Tarp
    Abstract: This study combines evidence from interviews in seven countries with (i) government institutions responsible for attracting foreign direct investment (FDI), (ii) 102 multinational enterprises (MNEs), and (iii) 226 domestic firms linked to these foreign affiliates as suppliers, customers, or competitors. The purpose of the interviews was to identify whether relations between MNEs and domestic firms lead to direct transfers of knowledge/technology. We first document that there are relatively few linkages between MNEs and domestic firms in sub-Saharan Africa compared with Asia. However, when linkages are present in sub-Saharan Africa, they raise the likelihood of direct knowledge/technology transfers from MNEs to domestic firms as compared with linked-in firms in Asia. Finally, we do not find that direct knowledge/technology transfers are more likely to occur via FDI than through trade. As such, our results are not consistent with the view that tacit knowledge transfers are more likely to occur through localized linkages.
    Date: 2018
  19. By: Lui, Yiu Lim (School of Economics, Singapore Management University); Xiao, Weilin (School of Management, Zhejiang University); Yu, Jun (School of Economics, Singapore Management University)
    Abstract: This paper firstly extends the results of Phillips and Magdalinos (2007a) by allowing for anti-persistent errors in mildly explosive autoregressive models. It is shown that the Cauchy asymptotic theory remains valid for the least squares (LS) estimator. The paper then extends the results of Phillips, Magdalinos and Giraitis (2010) by allowing for serially correlated errors of various forms in local-to mild-explosive autoregressive models. It is shown that the result of smooth transition in the limit theory between local-to-unity and mild-explosiveness remains valid for the LS estimator. Finally, the limit theory for autoregression with intercept is developed.
    Keywords: Anti-persistent; unit root; mildly explosive; limit theory; bubble; fractional integration; Young integral
    JEL: C22
    Date: 2018–12–15
  20. By: Quang Tran, Tuyen; Doan, Tinh; Vu, Huong; Nguyen, Hien
    Abstract: This study investigated the role of provincial governance on the growth of per capita income of Vietnamese households, using a balanced panel dataset for the period 2012-2014. Whereas we found no evidence for the influence of provincial governance when a linear fixed-effect regression estimator was used, the results from a fixed-effect quantile regression estimator reveal that provincial governance has a positive effect on several groups (but not the poorest) and the effect tends to be greater for better-off households. In addition, we find that wage employment plays a larger role in the income growth of poorer households, while returns on education are higher for richer households. The findings suggest that a mean regression approach that looks only at the role of explanatory variables on mean household welfare and does not consider differences in the distribution of household welfare, may miss some heterogeneity that is of interest to policy makers.
    Keywords: fixed-effect quantile regression; household welfare; public governance; policy makers.
    JEL: H4 H7 O1
    Date: 2018–01–02
  21. By: Isabelle Tsakok
    Abstract: As agriculture becomes more productive, it must shed labor, which unless absorbed in non-farm jobs that pay at least as well as agriculture, would simply constitute exporting farm poverty to other sectors. Adequate employment creation is a concern of every government. However, for agriculture-dependent countries whose agricultures are being transformed, the need to generate non-farm employment is particularly urgent as higher productivity agriculture will shed labor that must find productive employment in the non-farm economy. How have governments in developing countries, burdened with extensive underemployment, particularly of youth, effectively addressed this stiff challenge? This policy brief is about how the governments of Rwanda, Vietnam, and Mauritius have effectively addressed this problem. Though the specific measures taken were different, their experiences were similar in three key respects: 1.They focused on raising agricultural productivity growth and on diversifying agriculture; 2.They went beyond agriculture to create a supportive macro and trade framework; and 3.The employment challenge, even if successfully addressed for a period, never really diminishes. They have to continue to address new threats and opportunities as these emerge. The central message is to solve the problem of adequately creating non-farm employment, in economies where agriculture is still important (AG/GDP is 10 percent or more), sustained agricultural productivity growth is necessary but not sufficient. Too many developing countries striving to reduce extensive poverty and underemployment have found out that, first, they cannot bypass sustained growth in agricultural productivity; and second, that sustained agricultural productivity growth is, however, not sufficient. The entire economy must be transformed as well.
    Date: 2018–10
  22. By: Shenhao Wang; Jinhua Zhao
    Abstract: Deep neural network (DNN) has been increasingly applied to microscopic demand analysis. While DNN often outperforms traditional multinomial logit (MNL) model, it is unclear whether we can obtain interpretable economic information from DNN-based choice model beyond prediction accuracy. This paper provides an empirical method of numerically extracting valuable economic information such as choice probability, probability derivatives (or elasticities), and marginal rates of substitution. Using a survey collected in Singapore, we find that when the economic information is aggregated over population or models, DNN models can reveal roughly S-shaped choice probability curves, inverse bell-shaped driving probability derivatives regarding costs and time, and reasonable median value of time (VOT). However at the disaggregate level, choice probability curves of DNN models can be non-monotonically decreasing with costs and highly sensitive to the particular estimation; derivatives of choice probabilities regarding costs and time can be positive at some region; VOT can be infinite, undefined, zero, or arbitrarily large. Some of these patterns can be seen as counter-intuitive, while others can potentially be regarded as advantages of DNN for its flexibility to reflect certain behavior peculiarities. These patterns broadly relate to two theoretical challenges of DNN, irregularity of its probability space and large estimation errors. Overall, this study provides a practical guidance of using DNN for demand analysis with two suggestions: First, researchers can use numerical methods to obtain behaviorally intuitive choice probabilities, probability derivatives, and reasonable VOT. Second, given the large estimation errors and irregularity of the probability space of DNN, researchers should always ensemble either over population or individual models to obtain stable economic information.
    Date: 2018–12
  23. By: Cuong Nguyen; Finn Tarp
    Abstract: Reducing gender inequality is a critically important development challenge, especially in countries with widespread and deep-rooted prejudices against women. In this study, we use a randomized control trial to examine whether facilitating Vietnamese men to reflect about gender equality can reduce their gender bias. We randomly selected two groups of husbands and requested one group to make comments on gender-related laws and another group to write stories about gender equality. We find that commenting on gender-related laws reduces men’s bias against women slightly, while writing stories has a strong effect on reducing existing prejudice against women. Moreover, writing gender-related stories improves men’s knowledge of gender-related laws. Nonetheless, there is only a small effect of this treatment on doing housework. Changing men’s behaviour in practice requires stronger, more sustained interventions.
    Date: 2018
  24. By: Panu Poutvaara; Maximilian Schwefer
    Abstract: An emerging literature highlights the importance of empowering women. Female decision-making power is typically measured by surveying only one partner, but the few studies surveying both have documented large differences in perceptions. We analyze these perceptions and their consequences, using survey data from Indonesia. Both male and female respondents systematically report a higher share of decision domains in which they decide. Female labor supply and contraception use are higher when both partners perceive female decision-making power in these domains. Increases in female income share are associated with increases in the perceived female decision-making power.
    JEL: J16 D13 J13 J22 C83
    Date: 2018
  25. By: Shenhao Wang; Jinhua Zhao
    Abstract: It is an enduring question how to combine revealed preference (RP) and stated preference (SP) data to analyze travel behavior. This study presents a new approach of using multitask learning deep neural network (MTLDNN) to combine RP and SP data and incorporate the traditional nest logit approach as a special case. Based on a combined RP and SP survey in Singapore to examine the demand for autonomous vehicles (AV), we designed, estimated and compared one hundred MTLDNN architectures with three major findings. First, the traditional nested logit approach of combining RP and SP can be regarded as a special case of MTLDNN and is only one of a large number of possible MTLDNN architectures, and the nested logit approach imposes the proportional parameter constraint under the MTLDNN framework. Second, out of the 100 MTLDNN models tested, the best one has one shared layer and five domain-specific layers with weak regularization, but the nested logit approach with proportional parameter constraint rivals the best model. Third, the proportional parameter constraint works well in the nested logit model, but is too restrictive for deeper architectures. Overall, this study introduces the MTLDNN model to combine RP and SP data, relates the nested logit approach to the hyperparameter space of MTLDNN, and explores hyperparameter training and architecture design for the joint demand analysis.
    Date: 2019–01
  26. By: Uri Dadush; Hamza Saoudi
    Abstract: •Emerging market economies (EMs), as a group, continue to exhibit solid growth. This is the case especially in Asia and among oil-exporters, supported by growth in the advanced economies, the recovery in world trade, and the resilience of non-oil commodity prices. •However, financial markets have become very nervous about the prospects for several EMs, reflecting specific weaknesses in several countries – Argentina and Turkey stand out - and the prospect of higher international interest rates. •Though many lessons from past crises have been learnt, economic fundamentals in the EMs vary greatly, and contagion is quite possible. •The current episode will probably remain contained and the ongoing global economic expansion is unlikely to be derailed. However, if international risks – such as an escalation in trade conflicts – materialize, this picture could change quite suddenly. •The MENA region is more sheltered than other EMs from the turmoil, but it is certainly not immune, and caution is required.
    Date: 2018–11
  27. By: Holden, Stein T. (Centre for Land Tenure Studies, Norwegian University of Life Sciences)
    Abstract: Fertilizer and other input subsidies have been a prominent component of agricultural policies in many Asian and African countries since the 1960s. Their economic and political rationale is scrutinized with emphasis on the second generation of targeted input subsidy programs that were scaled up in Sub-Saharan Africa (SSA) after 2005. The extent to which they full-fill the goal of being ‘market smart’ is assessed after inspecting the potential for such subsidies in SSA. The new fertilizer subsidy programs do not live up the market smart principles and suffer from severe design and implementation failures. While a clear exit strategy was one of the key principles, this principle has been neglected with the result that most current programs are more ‘sticky’ than ‘smart’. They have only partially achieved the intended impacts and have resulted in a number of unintended negative impacts. Redesign should start from a pilot stage testing basic mechanisms.
    Keywords: Fertilizer subsidy; externality; market failure; market smart; impact; elite capture
    JEL: Q12 Q18 Q28
    Date: 2018–09–14
  28. By: Howell, Bronwyn E.; Potgieter, Petrus H.; Sofe, Ronald
    Abstract: Papua New Guinea is a low-middle income developing Asia-Pacific island country with a relatively long history of telecommunications market development under firstly Australian administration, and latterly under a pro-competitive set of regulatory arrangements strongly influenced by Australian policy-making. Nevertheless, it demonstrates some of the weakest sector performance statistics of a range of comparable low-middle income countries in its region. Why does a country with a regulatory regime drawing on current international recommended "best practice" perform so poorly? To address this question, we develop an inquiry framework (checklist) for assessing the effectiveness of regulatory arrangements in a developing, as opposed to developed country. Whilst the framework is based on guidelines from the World Bank and the International Telecommunications Union (Blackman & Srivastava, 2011), we adapt these to take account of specific challenges arising in developing countries: limited capacity, limited commitment, limited accountability, limited fiscal efficiency and trade-offs between factors that take account of these limits (Laffont, 2005; Estache & Wren-Lewis, 2010). Applying the inquiry framework to Papua New Guinea, we find that, the most likely explanation for poor performance derives from the government being both regulator and owner of the incumbent, Telikom. Lack of investment and an unstable set of ownership arrangements have constrained Telikom from being an effective competitor. Weaknesses exist in the monitoring and enforcement of regulator accountability provisions, but are unlikely to have altered sector outcomes, although they may have contributed to obscuring poor performance. Introduction of at least one more foreign operator will be beneficial, but only if the government can clearly separate its ownership and regulatory activities and political agents can credibly commit to refraining from interfering in the operational activities of both the incumbent firm and regulatory agencies.
    Date: 2018
  29. By: Vo, A.T.; Van, L. T.-H.; Vo, D.H.; McAleer, M.J.
    Abstract: Financial inclusion, being considered as a key enabler to reducing poverty and boosting prosperity in emerging and frontier markets such as Vietnam, is the process in which individuals and small businesses are provided with an access to useful and affordable financial products and services. The extant literature on the empirical evidence regarding the contribution of financial inclusion to macroeconomic stability is mixed. This paper investigates the linkages between financial inclusion and macroeconomic stability, which has not yet been thoroughly examined in the literature, for 22 emerging and frontier economies from 2008 to 2015, with particular focus on a potential optimal level. Using the panel threshold estimation technique, the empirical findings show that financial inclusion, as approximated by the growth rate in the number of bank branches over 100,000 account holders, is found to enhance financial stability under a certain threshold. Financial inclusion is also found to be of benefit to maintaining stable inflation and output growth. Policy implications are also discussed on the basis of the important empirical findings.
    Keywords: Financial inclusion, Macroeconomic stability, Panel threshold, Emerging and frontier markets
    JEL: C62 O16 P45
    Date: 2018–12–01
  30. By: Hung Ly-Dai (VNU - Vietnam National University [Hanoï])
    Abstract: We characterize the safety of public debt by one cross-section sample of 160 economies. For demand analysis, the public debt is safer for larger financial market size, higher financial development level, lower inflation rate and greater political stability. For supply analysis, by a huger debt stock, the safety improves in economies with high income per capita but deteriorates in economies with low income per capita. The results are robust for Instrument-Variable regressions.
    Keywords: Safe Assets,Credit Ratings,Financial Development
    Date: 2018–11
  31. By: Hung Ly-Dai (VNU - Vietnam National University [Hanoï])
    Abstract: We explain U-shape pattern of international capital inflows by one multi-country OLG economy and one cross-section data sample. The theory proves that capital inflows are decreasing on distance to frontier, which is measured by ratio of domestic productivity level over United States' level. The evidences not only confirm the theory but also reveal that growth is decreasing on distance to frontier for club of convergence but increasing for club of unconvergence. Therefore, Neo-Classical growth model's implication, that capital inflows are positively correlated to growth, applies for club of convergence. However, Allocation puzzle, that capital inflows are negatively correlated to growth, works for club of unconvergence. The turning point of U-shape pattern is the productivity growth rate at world technology frontier.
    Keywords: International Capital Flows,Productivity Growth,Relative Convergence
    Date: 2018–07
  32. By: Hung Ly-Dai (VNU - Vietnam National University [Hanoï])
    Abstract: We establish one non-linear pattern of international capital flows by building up one two-country OLG economy. With symmetric growth and asymmetric interest rate wedges across countries, net total capital inflows are either decreasing or increasing on productivity growth rate. However, with asymmetric growth and asymmetric wedges, they follow one U-shaped curve by first decreasing and then increasing on growth. The turning point of the curve is built on world average growth rate and wedges. Our proposed model can provide an explanation for inconsistencies between theories (i.e, Lucas paradox, uphill capital flows, and allocation puzzle) about the pattern of international capital flows.
    Keywords: Allocation Puzzle,Capital Flows,Financial Frictions,Productivity Growth
    Date: 2018–10

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