nep-sea New Economics Papers
on South East Asia
Issue of 2023‒10‒09
fourteen papers chosen by
Kavita Iyengar, Asian Development Bank

  1. Sejarah Birokrasi Pemerintahan Indonesia By syarifuddin, Sarinah
  2. 외국인 직접투자가 베트남의 성별 임금 격차에 미치는 영향과 시사점(Foreign Direct Investment and Gender Wage Gap: Vietnamese Evidence) By Kim, Jegook
  3. The Impact of Foreign Capital Inflows on Poverty in Vietnam: An Empirical Investigation By MT Musakwa; N.M. Odhiambo
  4. India's rice export restrictions and BIMSTEC countries: Implications and recommendations By Kamar, Abul; Roy, Devesh; Pradhan, Mamata; Saroj, Sunil
  5. Global Supply Chains: The Looming “Great Reallocation” By Laura Alfaro; Davin Chor
  6. Implications of the Russian Invasion on the Logistical Competition for Corn Shipments from the United States and Ukraine By Wilson, William W.; Bullock, David W.; Lakkakula, Prithviraj
  7. Tax Treaty Shopping and Developing Countries By van 't Riet, Maarten; Lejour, Arjan
  8. Gender Differences in Returns to Beauty By Kimberly Scharf; Oleksandr Talavera; Linh Vi
  9. Lao People’s Democratic Republic: Technical Assistance Report-Regulation and Supervision of Crypto Assets By International Monetary Fund
  10. Does human capital influence the gender gap in earnings? Evidence from four developing countries By Marcello Perez-Alvarez; Catherine Porter; Anvita Ramachandran
  11. Do international investment and trade flows show any signs of fragmentation? By Kaaresvirta, Juuso; Kerola, Eeva; Nuutilainen, Riikka
  12. Charting the Course: How Does Information about Sea Level Rise Affect the Willingness to Migrate? By Laura Bakkensen; Quynh Nquyen; Toan Phan; Paul Shuler
  13. What If It Never Happened? Subjective Treatment Effects of a Negative Shock on Youth Labour Market Outcomes in Developing Countries By Favara, Marta; Freund, Richard; Perez-Alvarez, Marcello
  14. Policies at the End of the Global Value Chain Rainbow: What Has the World Bank Discovered? By Xiaolun Sun; Shahid Yusuf

  1. By: syarifuddin, Sarinah
    Abstract: Artikel ini membahas serta mengkaji tentang sistem administrasi negara, yang meliputi tugas-tugas yang kompleks, memerlukan kontrol fungsional yang efektif. Namun, aparat birokrasi yang terlalu terikat pada aturan seringkali menjadi statis dan kurang responsif terhadap perubahan lingkungan, bahkan cenderung menolak modernisasi. Kondisi ini meningkatkan kemungkinan terjadinya mismanajemen, yang pada akhirnya dapat mengarah pada korupsi, kolusi, dan nepotisme. Untuk mengatasi masalah ini, pemerintah pusat dan daerah harus melakukan reformasi birokrasi pada semua aspek kehidupan
    Date: 2023–08–22
    Abstract: 한국을 포함한 세계 다국적 기업의 주요 투자처인 베트남은 사회주의 체제를 유지하고 있으며, 남녀평등을 포함한 평등의 가치를 중요하게 여기는 국가 중 하나이다. 그러나 2010년대 이후 베트남으로의 FDI 유입 확대 추이와 달리, 2015년 이후 성별 임금 격차는 악화되는 모습을 보였다. 이러한 배경에서 본 연구는 베트남 63개 지역의 패널 자료를 사용해 FDI 유입이 유발할 수 있는 성별 임금 격차를 실증분석하고, 노동시장에 대한 정량적 분석과 양성평등 제도에 대한 정성적 분석을 종합해 시사점을 도출했다. 실증분석 결과 FDI 유입과 성별 임금 격차 간에는 대체로 음의 관계가 추정되었는데, 이는 여성 고용이 많은 산업 혹은 이러한 산업이 집중된 지역에서 두드러졌다. 통제변수 중 숙련노동 비중도 대체로 음의 관계가 추정되었다. 이상의 내용을 바탕으로 여성 고용의 양과 질 제고를 위한 FDI 유인구조 설계, 직업훈련 및 교육의 중요성, 양성평등 제도 이행을 위한 노력, 여성의 사회·경제 활동 참여 자기결정권 제고를 시사점으로 제시한다. On July 4, 2023, Foxconn, the Taiwanese electronics manufacturer best known for producing Apple’s products such as iPhone and MacBook, announced plans to invest more than $200 million in northern Vietnam to reduce its dependence on Apple and participate in the electric vehicles market. Including this investment, Foxconn has invested more than 2 billion dollars in Vietnam. Other multinationals such as Intel, LG, Nike, and Samsung are also rushing to invest in Vietnam. As a result Vietnam is sometimes called the FDI darling. These Foreign direct investment (FDI) contributes to Vietnam’s economic growth, not only through the role of capital as a factor of production, but also through the introduction of management skills from advanced economies. The impact of FDI on the host country is not limited to the target enterprises, but includes the transfer of capital or technology to industries and regions. The impact also affects factor markets in the region, in particular labor conditions, including employment, labor productivity, and wages. These effects may vary by industry, occupation, skill, educational level, and Executive Summary 102 • 외국인 직접투자가 베트남의 성별 임금 격차에 미치는 영향과 시사점 gender. This can be a matter of discrimination, especially when other conditions are equal, but the difference is simply due to innate gender differences. Against this backdrop, this paper aims to examine the statistical and institutional status of FDI inflows and the gender wage gap in Vietnam, and to derive implications for governments and firms in Korea and Vietnam. Chapter 2 compares the status of gender equality in Vietnam with key ASEAN countries, Indonesia, Malaysia, the Philippines, and Thailand, focusing on the labor market, and assesses Vietnam’s gender equality institutions. Given Vietnam’s stage of economic development, gender equality in economic activities is good, but there is a need to expand political empowerment, provide paid parental leave, and reduce the gender gap in retirement ages. (the rest omitted)
    Keywords: 외국인직접투자; 노동시장; 외국인직접투자; 성별임금격차; 베트남; Foreign direct investment; labor market; foreign direct investment; gender wage gap; Vietnam
    Date: 2023–09–08
  3. By: MT Musakwa (University of South Africa); N.M. Odhiambo (University of South Africa)
    Abstract: This study investigates the impact of foreign capital inflows on poverty in Vietnam, using annual time series data from 1990 to 2018. The study was motivated by the need to establish if burgeoning foreign capital inflows in Vietnam can support the poverty alleviation agenda. Foreign direct investment (FDI) and external debt were used as proxies for foreign capital inflows; and infant mortality rate, Human Development Index (HDI) and household consumption expenditure were used as poverty proxies. Using the autoregressive distributed lag (ARDL) approach, the study found foreign direct investment to reduce poverty in the short run and long run when household consumption expenditure was used as a poverty measure. However, the study found FDI to worsen poverty in the short run when infant mortality rate and HDI were used as poverty proxies. The study found external debt to have poverty mitigating effect in the short run regardless of the poverty measure used and in the long run only when household consumption expenditure was used as a poverty measure.
    Date: 2021–10
  4. By: Kamar, Abul; Roy, Devesh; Pradhan, Mamata; Saroj, Sunil
    Abstract: The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) brings together five South Asian countries (Bangladesh, Bhutan, India, Nepal, and Sri Lanka) and two Southeast Asian countries (Myanmar and Thailand). Recent events have raised global concerns on food security, including for BIMSTEC countries; these events include Russia’s withdrawal from the Black Sea Grain Initiative with Ukraine, India’s prohibition on the export of non-basmati white rice, and its 20 percent export duty on parboiled rice. This policy note spells out the likely impact of one of these events, that is, India’s restrictions on rice exports to its fellow BIMSTEC nations. Trade moves food from surplus to deficit regions and hence is crucial for maintaining a stable food supply. Historically, the global supply of cereals has been stable (Bradford et al. 2022); this implies that trade (or the lack of it) can be directly mapped onto area-specific food insecurity. At the same time, shocks leading to trade disruption can pose serious challenges, particularly for countries with high import penetration in food.
    Keywords: INDIA; SOUTH ASIA; ASIA; BANGLADESH; BHUTAN; INDIA; NEPAL; SRI LANKA; trade; food security; exports; rice; cereals; shocks; imports; trade barriers; Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC)
    Date: 2023
  5. By: Laura Alfaro; Davin Chor
    Abstract: Global supply chains have come under unprecedented stress as a result of US-China trade tensions, the Covid-19 pandemic, and geopolitical shocks. We document shifts in the pattern of US participation in global value chains over the last four decades, in terms of partner countries, products, and modes, with a focus on the last five years (2017-2022). The available data point to a looming “great reallocation” in supply chain activity: Direct US sourcing from China has decreased, with low-wage locations (principally: Vietnam) and nearshoring/friendshoring alternatives (notably: Mexico) gaining in import share. The production line positioning of the US’ imports has also become more upstream, which is indicative of some reshoring of production stages. We sound several cautionary notes over the policies that have set this reallocation in motion: It is unclear if these measures will reduce US dependence on supply chains linked to China, and there are moreover already signs that prices of imports from Vietnam and Mexico are on the rise.
    JEL: F0 F1
    Date: 2023–09
  6. By: Wilson, William W.; Bullock, David W.; Lakkakula, Prithviraj
    Abstract: The Russian invasion of Ukraine disrupted the grain flows from that region and worldwide. These changes are critical due to the war’s influence on logistical costs, routes and capacities. As a result of the invasion, Ukraine has evolved from having some of the lowest logistical costs in the world to having the highest logistical cost. Logistics are critical for international competitiveness in commodities, and due to the invasion, these functions have been severely affected. Essential features for a logistical competition include internal logistical functions and costs, quality, port capacity and ocean shipping costs, each compounded by seasonal demands. This paper’s purpose is to analyze the effects of the Russian invasion on the logistical functions and the costs for corn exports from Ukraine and its competitors using an optimized Monte Carlo simulation model. The findings indicate that before the invasion, Ukraine had logistical advantages for shipments to the European Union (EU) and was highly competitive in Indonesia and China; the United States had a logistical cost advantage over Ukraine to serve China, South Korea (from the U.S. Gulf) and Japan (from the Pacific Northwest (PNW)). The changes due to the invasion are substantial. Most important is the radical increase in shipping costs from Ukraine, reduced port capacity and export supplies. However, concurrent with the invasion were changes in some critical trade and marketing policies, thus influencing the international competition for corn.
    Keywords: Crop Production/Industries, International Development, International Relations/Trade
    Date: 2023–09–22
  7. By: van 't Riet, Maarten; Lejour, Arjan
    Abstract: Analysis of the international network of double tax treaties reveals a large potential for tax avoidance. Developing countries are, on average, not more likely to suffer from tax revenue losses than other countries. Yet, this average masks the fact that several countries, such as Bangladesh, Egypt, Indonesia, Kenya, Uganda and Zambia, are vulnerable to substantial potential losses of withholding tax revenue by treaty shopping. The treaties responsible for this are referred to as potentially aggressive tax treaties.
    Keywords: Development Policy, Finance, Governance,
    Date: 2023
  8. By: Kimberly Scharf (University of Nottingham); Oleksandr Talavera (University of Birmingham); Linh Vi (Aston University)
    Abstract: We employ a sample of nearly 40, 000 gender-targeted online job vacancies in Vietnam from February 2019 to July 2020 to investigate gender differences in returns to physical attractiveness. In particular, we compare the monthly offered wage in matched vacancies with and without beauty preferences of the same characteristics among job ads directed at men and women separately. We find evidence that better-looking women enjoy a wage premium of 3.7 percentage points, whereas better-looking men do not. Further analysis shows that the gender differences in returns to beauty are mainly driven by gender role attitudes and the perceived lack of fit rather than productivity-enhancing effect or employers' negligence in job postings.
    Keywords: FinTech; physical attractiveness, online vacancies, gender, beauty premium
    JEL: J16 J23 J24 J71
    Date: 2023–09
  9. By: International Monetary Fund
    Abstract: This technical assistance report describes the regulation and supervision of crypto assets in Lao People’s Democratic Republic (LAO P.D.R.). Crypto uptake in Lao P.D.R. seems to be limited so far, and so consumer protection risks appear contained. The authorities are in the process of considering an appropriate regulatory and supervisory framework for mining and trading activities. The current regulatory framework for crypto trading platforms is a positive step to managing risks but would benefit from key prudential and conduct additions. Authorities should continue their efforts to coordinate domestically and cooperate with foreign peer regulators. Due to the novelty of the industry and the limited size of the Lao PDR market, the most prominent risks arising from crypto trading in the short term are likely to be generated by complex interconnections within crypto markets and broader financial markets. The mission commends the authorities in their coordinated approach to this new regime, and would like to encourage them to continue deepening that coordination.
    Keywords: trading platform; Lao PDR market; crypto trading license; market abuse; consumer protection risk; TA recipient; Virtual currencies; Mining sector; Capital markets; Financial sector stability; Blockchain and DLT; Global
    Date: 2023–08–31
  10. By: Marcello Perez-Alvarez; Catherine Porter; Anvita Ramachandran
    Abstract: This paper investigates the relationship between human capital and the gender gap in earnings in four developing countries. We use high-quality panel data spanning 12 years from Ethiopia, India, Peru, and Vietnam, to construct latent stocks of cognitive and non-cognitive skills measured during adolescence. We investigate the relationship between these skills and subsequent earnings acquired in early adulthood, thereby avoiding common challenges of measurement error and simultaneity issues. Our results suggest that women earn significantly less than men in all four countries, even after accounting for differences in carefully constructed skill endowments. Interestingly, the gender gap in earnings decreases at higher cognitive skill levels in two out of the four countries. We find that these country-level variations are driven by differences in employment status as opposed to differences in earnings among the employed, and may reflect differences in unpaid care work. We further explore how the gender earnings gap varies in the context of the COVID-19 crisis. While earnings decreased for both men and women during this period, the pre-pandemic relationships between human capital and gender gaps persisted and were strengthened. By comparing the same youth cohort in different countries and periods, we elucidate the contexts under which human capital can become a force of gender convergence in the labour markets of developing countries.
    Date: 2023
  11. By: Kaaresvirta, Juuso; Kerola, Eeva; Nuutilainen, Riikka
    Abstract: This paper utilizes available aggregate country-level data, as well as bilateral trade and investment data, to identify signs of fragmentation in trade and investment patterns among ten major trading countries or regional trading blocks. We compare the trade and investment trends in the years during the US-China trade war and increase in geopolitical tensions (2018-2021) against the years preceding the trade war (2014-2017). Our analysis generally corroborates findings in the existing literature. Bilateral flows between the US and China have been damaged, but there is little evidence of wider fragmentation or that the world is splitting into competing spheres. Even focusing on technologyintensive manufactures that are increasingly subject to trade restrictions, we find no evidence of broad fragmentation. Our analysis does reveal, however, shifts in global trade and FDI, particularly towards Central and Eastern Europe (CEE) and ASEAN countries. This may reflect a partial reshuffling of global value chains that is a natural outcome of favorable developments in these regions, as well as rising production costs in China. Such shifts do not necessarily reflect global fragmentation driven by geoeconomics factors.
    Keywords: Global trade, foreign direct investments, fragmentation
    Date: 2023
  12. By: Laura Bakkensen; Quynh Nquyen; Toan Phan; Paul Shuler
    Abstract: An important yet less studied factor in determining the extent of adaptation to climate change is information: are people adequately informed about their vulnerability to future climate-related risks, and does their willingness to adapt depend on this knowledge? Focusing on how communication about projected sea level rise (SLR) affects the willingness to migrate, we implemented a large randomized control survey experiment with a nationally representative sample of more than 7, 000 respondents across all provinces in Vietnam. We randomly assign respondents to different information treatments. We find that providing a simple text-based information treatment about the general extent of Vietnam's exposure to projected SLR increases all respondents' willingness to migrate (including respondents living in areas not vulnerable to SLR). However, a more spatially precise map information treatment—providing the general text along with a map showing Vietnam's projected SLR exposure—leads to a more targeted effect: it only significantly increases the willingness to migrate of respondents currently residing in vulnerable areas. Finally, adding doubt to the information treatments—mentioning an official repudiation of the scientific projection of SLR—does not reduce the treatments' impact. Our findings are inconsistent with the commonly used perfect information benchmark, which assumes that people are fully informed about future climate-related risks. They also highlight the importance of providing spatially precise information in facilitating climate adaptation.
    Keywords: climate change; sea level rise; migration; disaster risk communication; survey experiment; public information
    JEL: Q5
    Date: 2023–09–14
  13. By: Favara, Marta (University of Oxford); Freund, Richard (University of Oxford); Perez-Alvarez, Marcello (University of Göttingen)
    Abstract: This paper examines the subjective treatment effects of a negative shock created by the COVID-19 pandemic on the labour market outcomes of young adults in India, Peru, and Vietnam. We leverage subjective counterfactual outcomes at the individual-level that were purposely collected from over 7, 000 individuals to this aim. Our findings suggest that the shock denied employment opportunities and reduced earnings. On average, the pandemic reduced monthly earnings by 19.4% and employment levels by 17.5% in our three-country-sample. Country-specific magnitudes are lowest for India and highest for Vietnam. However, these average effects belie that a substantial proportion of individuals, particularly those from disadvantaged backgrounds, are pushed into employment by the pandemic. This frequently comes at the expense of their education, hinting at youth labour acting as a buffer against transitory shocks. According to our findings, the perceived effects of the pandemic on labour market outcomes carry important implications for young people's well-being and behaviour. Individuals who are denied employment display significantly higher rates of anxiety, lower rates of COVID-19 vaccination, and lower desired fertility.
    Keywords: subjective treatment effects, labour market, COVID-19, youth, developing countries
    JEL: J21 J11 C21 C83 D84
    Date: 2023–08
  14. By: Xiaolun Sun (Independent Evaluation Group of the World Bank Group); Shahid Yusuf (Growth Dialogue; Center for Global Development; GW Institute of Korean Studies)
    Abstract: The concept of global value chains (GVCs) has become a workhorse of trade analytics ever since it was identified around the turn of the century. By showing empirically how value addition is distributed across trading economies, it provides a better handle on the contribution of each country as goods crisscross international borders in the production process. The concept was quickly adopted by the World Bank Group—and other international financial institutions (IFIs)—and has become a fixture of country diagnostics. In fact, the disruption caused by the COVID-19 shock made GVCs something of a cause célèbre. But this paper argues that conceptual attractions aside, the use of GVCs for analytic purposes has not enlarged the policy toolkit, expanded the spectrum of usable policies, or enhanced their efficacy. Especially in low- and lower-middle-income countries, policymakers are no better equipped to promote development export-led or other. Based on its dealings with four countries—Bangladesh, Côte d’Ivoire, Ethiopia, and Vietnam—each of which is participating in one or multiple GVCs, this paper shows that the World Bank’s recommendations are no different from ones that were the norm in pre-GVC times. To paraphrase Robert Solow, we see GVCs everywhere except in the policy menu. Implementing conventional policies more effectively is what counts.
    Date: 2023–06–29

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