nep-sea New Economics Papers
on South East Asia
Issue of 2024‒04‒22
thirteen papers chosen by
Kavita Iyengar, Asian Development Bank

  1. The geography of human capital: insights from the subnational human capital index in Indonesia By Sari, Virgi; Tiwari, Sailesh
  2. India’s look east policy: Its evolution, challenges and prospects By Sukhia, Jyoti
  3. Upgrading the ICT Regulatory Framework: Toward Accelerated and Inclusive Digital Connectivity By Serafica, Ramonette B.; Oren, Queen Cel A.
  4. Measuring well-being “beyond GDP” in Asia, South-East Asia and Korea By Jihye Lee; Elena Tosetto
  5. Factors Influencing Customers’ Loyalty: An Empirical Study for the Milk Industry in Vietnam By Huynh, Cong Minh; Nguyen, Phan Kim Han
  6. Estimating Structural Budget Balances in Developing Asia By Jalles, João Tovar
  7. Monitoring trade in plastic waste and scrap By Bum Cheul Park; Andrew Brown; Frithjof Laubinger; Peter Börkey
  8. The nexus between economic growth, healthcare expenditure, and CO2 emissions in Asia-Pacific countries: Evidence from a PVAR approach By Yuan, Mingqing
  9. Issues in Philippine TVET: Responsiveness to Industry Demand and Barriers to Access among Disadvantaged Youth By Orbeta, Aniceto Jr. C.; Corpus, John Paul P.
  10. Hydrodynamics of Markets:Hidden Links Between Physics and Finance By Alexander Lipton
  11. Geographies of bodily (dis)possession: domestic work, unfreedom, and spirit possessions in Singapore By Antona, Laura
  12. Eco-innovation, firms’ growth, and the mediating role of export activities By Serenella Caravella; Giovanni Cerulli; Francesco Crespi; Eleonora Pierucci
  13. Germany's value-based partnerships in the Indo-Pacific By Heiduk, Felix

  1. By: Sari, Virgi; Tiwari, Sailesh
    Abstract: This paper explores the spatial heterogeneity in the human capital potential of Indonesia’s next generation by constructing and analyzing sub-national human capital indices (HCI) for 34 provinces and 514 districts in Indonesia. The paper identifies data and methodological constraints in the construction of these sub-national indices and proposes and implements strategies to overcome these challenges. Several interesting findings emerge from the analysis. First, Indonesian’s young generation can only achieve 53% of their future productivity relative to the full benchmark of health and education. Second, the variation in aggregate human capital potential across space in Indonesia is staggering: some parts of country are almost at par with countries like Vietnam and China while others have human capital levels that are comparable to Chad, Niger, and Sierra Leone. Third, differences in learning outcomes as measured by harmonized test scores account for the largest share of the variation in human capital across Indonesia, suggesting that the challenge of providing quality education remains one of the most important obstacles to equalizing opportunities for the next generation of Indonesians. And fourth, the correlation between government spending and performance on HCI at the district level appears rather weak, reinforcing conclusions reached by other recent studies that have highlighted the importance of focusing on the quality of spending. Finally, this paper also shows that Indonesia’s human capital registered a modest improvement from 0.50 in 2013 to 0.53 in 2018 with stronger progress observed among the already top performing provinces.
    Keywords: education; human capital; Indonesia; inequality; poverty; Springer deal
    JEL: I20 J24 P36
    Date: 2024–03–13
  2. By: Sukhia, Jyoti
    Abstract: The Look East Policy, initially crafted during the early nineties by the Narsimha Rao government of India, stands as a significant embodiment of India's deliberate foreign policy approach aimed at Southeast Asia—a region known for its abundant resources and thriving prospects. Over time, this policy has evolved into a pivotal component of India's foreign relations, marking a distinct departure from its traditional foreign policy priorities. The Look East Policy has not only gained substantial momentum but has also acquired strategic depth. Both India and Southeast Asia share deep-rooted cultural and civilizational ties, and they share common interests spanning trade, tourism, investment, joint ventures, counterterrorism, climate change mitigation, and natural disaster relief. As major players in the global economy, their collaboration holds the potential to drive the development of the broader Asian region, benefiting the Asia-Pacific as well. Nonetheless, building a robust partnership in the 21st century will demand both ASEAN and India to surmount formidable challenges and capitalize on significant opportunities with a cooperative and forward-looking perspective. This paper aims to illustrate the burgeoning cooperation between India and ASEAN across various domains while addressing the obstacles impeding their collaboration. Subsequently, it will conclude by exploring areas of alignment between India and the countries of Southeast Asia.
    Keywords: India, foreign policy, ASEAN, economic trade, security cooperation, political and strategic dimensions
    JEL: F11 F13 F16
    Date: 2024–02–28
  3. By: Serafica, Ramonette B.; Oren, Queen Cel A.
    Abstract: Across different metrics, the Philippines continues to demonstrate subpar performance in information and communications technology (ICT) compared to other members of the Association of Southeast Asian Nations and countries at the same level of development. The quality of the country’s ICT regulatory environment, composed of regulatory authority, regulatory mandate, regulatory regime, and competition model, is significantly below what is considered international best practice, consequently impeding the use of various technological solutions available to bridge the gap in digital inequality. Although significant policy changes have recently been introduced, more reforms are needed to achieve inclusive and accelerated digital connectivity. Priorities include reforming the licensing regime, formulating a spectrum policy and plan, and reinventing the National Telecommunications Commission to ensure regulatory independence.
    Keywords: ICT;telecommunications;digital;regulation;broadband;information and communications technology
    Date: 2024
  4. By: Jihye Lee; Elena Tosetto
    Abstract: Existing well-being measurement initiatives in the region, such as the Quality of Life Indicators in Korea, Bhutan’s Gross National Happiness Index and Quality of Life Index in the Philippines, shed some insight on dimensions that should be considered for measuring well-being beyond GDP in Asia. Dimensions of housing, health, education, environment and civic engagement recur across several Asian well-being measurement frameworks, as well as dimensions such as family and culture which are more characteristic of the region. Identifying vulnerable population groups and securing better evidence on social mobility are also necessary to better measure progress in the region. Going forward, it would be helpful for countries to exchange knowledge on how well-being data available can be used for policy making in a more concrete way, for example, by including it in national development plans or budgeting processes.
    Keywords: happiness, quality of life, sustainable development, well-being
    JEL: I30 I31 I38
    Date: 2024–04–02
  5. By: Huynh, Cong Minh; Nguyen, Phan Kim Han
    Abstract: This study investigates the impact of brand awareness, brand image, and perceived value on customer loyalty within the milk industry in Vietnam. The research concentrates on renowned milk brands in Vietnam, such as Vinamilk, Dutch Lady, Nutifood, Nestle, TH true milk, Abbott, and Fami. The results from a sample of 141 respondents reveal that each of these factors positively influences customer loyalty. Notably, perceived value emerges as the most influential factor, with brand image and brand awareness following in strength. These findings offer valuable insights for professionals and researchers in related business domains.
    Keywords: Brand awareness, Brand image, Perceived value, Customer loyalty, Milk industry
    JEL: L81 M31 M37
    Date: 2024–03–01
  6. By: Jalles, João Tovar (University of Lisbon)
    Abstract: This paper reviews the current discussions, methods, and practices surrounding the estimation of reasonable proxies for the underlying fiscal position, a useful anchor for fiscal policy. An empirical application to developing Asian economies is carried out. There is no one-size fits all type of approach and the sensitivity and discernment regarding specific economies are important in various stages. The choice of the filter to decompose trends from cycles matters. The way to adjust revenues and expenditures entering the cyclically adjusted balance also matters—choices regarding economy-specific vs. panel estimations or the use of static vs. time-varying approaches need to be made. To deal with one-off operations, a narrative-based approach can complement the suggested identification based on large changes in cyclically adjusted government capital transfers. A discussion of other important factors that can affect the estimates of structural balances such as asset and commodity prices is also provided.
    Keywords: budget elasticity; time-varying estimation; trend-cycle decomposition; cyclically adjusted balances; one-off fiscal operations
    JEL: C33 E62 H30 H60 O53
    Date: 2024–04–04
  7. By: Bum Cheul Park; Andrew Brown; Frithjof Laubinger; Peter Börkey
    Abstract: Global trade in plastic waste and scrap declined further (2017-2022) in 2022. The combined trade surplus of OECD Member Countries (i.e. the difference between exports and imports) continued to decrease. Less plastic waste and scrap is being exported by OECD countries to non-OECD countries, however some countries still export substantial volumes to non-OECD countries. Particularly several non-OECD south-east Asian countries remain large export destinations. Trade between OECD countries has increased. The value and composition of plastic waste and scrap exports in 2021 suggests that more high value and easy to recycle plastic waste was traded. Some volume of plastics waste is likely transformed into a “fuel” via mechanical and chemical processing and subsequently shipped as Processed Engineered Fuel (PEF) or Refuse-Derived Fuels (RDF), broadly categorised under HS 3825. There was an increase in this trade mostly between OECD countries in 2021. The trade regime remains dynamic with new export destinations emerging, which deserve further monitoring.
    Keywords: circular economy, plastics, trade, waste management
    JEL: F18 L65 Q53 Q56
    Date: 2024–04–15
  8. By: Yuan, Mingqing
    Abstract: In this study, a panel vector autoregressive (PVAR) model with system generalized method of moments (GMM) estimation is utilized to examine the dynamic causalities among economic growth, healthcare expenditure, and CO2 emissions in Asia-Pacific countries from 2000 to 2019. Results show that economic growth has a positive effect on government healthcare expenditure, with bidirectional causality observed with private healthcare spending. No significant long-term relationship is detected in the former case. These results emphasize the role of economic development in bolstering public health and reflect a later weakening of the level of government response as economies expand. Additionally, CO2 emissions negatively affect economic growth in a unidirectional manner. The impulse response analysis supports the presence of the environmental Kuznets curve (EKC). Furthermore, while a bidirectional causality exists between CO2 emissions and government healthcare spending, a long-standing correlation remains elusive. This result calls for a dual focus on enhancing healthcare services and reducing emission for health and environmental benefits. The results of variance decomposition highlight the significant contribution of government healthcare expenditure to economic growth and private healthcare spending, in addition to the important role of private healthcare spending in economic growth. These findings offer policymakers evidence-based insights to formulate strategies that balance economic growth, sustainable development, and healthcare provision.
    Keywords: Economic growth, Healthcare expenditure, CO2 emissions, System-GMM, PVAR, Asia-Pacific region
    JEL: C33 C36 C51 I15 O44 O5 O53 Q53 Q56
    Date: 2023
  9. By: Orbeta, Aniceto Jr. C.; Corpus, John Paul P.
    Abstract: Technical and vocational education and training (TVET) plays a key role in producing a skilled labor force and providing a pathway for youth to gain productive employment. This study assesses TVET’s responsiveness to industry needs using qualitative interviews of enterprise-based training providers from the construction, manufacturing, and tourism sectors. Among the issues raised include (1) difficulties in attracting students to participate in construction training programs due to the sector’s poor image; (2) gaps in training quality, especially in public training institutions, owing to outdated facilities and trainers lacking up-to-date industry knowhow; and (3) underdeveloped soft skills among young employees. Further, this study examines the barriers that keep youth not in employment, education, or training (NEET) from participating in vocational education. Data was collected through a rapid online survey of young trainees or training applicants who were or had been NEET at the time of the survey. Many respondents self-identified as poor and cited the lack of financial resources for education as the main hindrance to pursuing TVET, followed by the lack of information on training programs. Hence, the study recommends using information campaigns and scholarships to attract learners to train for in-demand occupations, strengthening soft skills instruction, incentivizing industry practitioners to join the TVET sector as trainees, and promoting enterprise-based training programs. Meanwhile, enabling greater training participation among NEET calls for financial assistance programs with adequate allowances and information dissemination initiatives about training and job opportunities.
    Keywords: TVET;technical-vocational education;training;not in employment, education, or training;NEET;youth;labor force
    Date: 2024
  10. By: Alexander Lipton
    Abstract: An intriguing link between a wide range of problems occurring in physics and financial engineering is presented. These problems include the evolution of small perturbations of linear flows in hydrodynamics, the movements of particles in random fields described by the Kolmogorov and Klein-Kramers equations, the Ornstein-Uhlenbeck and Feller processes, and their generalizations. They are reduced to affine differential and pseudo-differential equations and solved in a unified way by using Kelvin waves and developing a comprehensive math framework for calculating transition probabilities and expectations. Kelvin waves are instrumental for studying the well-known Black-Scholes, Heston, and Stein-Stein models and more complex path-dependent volatility models, as well as the pricing of Asian options, volatility and variance swaps, bonds, and bond options. Kelvin waves help to solve several cutting-edge problems, including hedging the impermanent loss of Automated Market Makers for cryptocurrency trading. This title is also available as Open Access on Cambridge Core.
    Date: 2024–03
  11. By: Antona, Laura
    Abstract: Singapore’s labor-migration regime has come under much scrutiny for the ways in which it unequally positions employers vis-à-vis their migrant “workers.” One domestic worker, Rosamie, described the work permit she was issued as a “curse, ” as it bound her to her employers as property, leaving her vulnerable to exploitation and violence. Drawing on ethnographic research, this article argues that multiscalar geographies of bodily (dis)possession are produced by Singapore’s labor-migration regime, which shape migrant domestic workers’ everyday lives. By engaging directly with the concepts of possession and dispossession, this article reveals the ways in which migrant domestic workers are themselves rendered bodily possessions in Singapore; with the state, employers, employment agencies, nongovernmental organizations, and ghosts all involved in creating this dynamic. Indeed, as I demonstrate, the permanence, freedoms, and authority of both employers and (shelter-based) ghosts stood in stark contrast to the disposability, unfreedom, and powerlessness that domestic workers (particularly those residing in shelters) often experienced and felt. I also explain how domestic workers’ lack of autonomy and bodily (dis)possession was (re)produced at different geographic scales: within the nation, individual dwelling spaces, and the body.
    Keywords: ES/J500070/1; Taylor & Francis deal
    JEL: R14 J01
    Date: 2024–03–18
  12. By: Serenella Caravella; Giovanni Cerulli; Francesco Crespi; Eleonora Pierucci
    Abstract: This paper analyses the growth-enhancing effect of different types of innovative activities, i.e., standard-innovation and eco-innovation by focusing on the potential role of exports in mediating the innovation-growth nexus. The empirical study is carried out on a representative sample of Italian firms built by integrating data from the Italian CIS-Community Innovation Survey with the ASIA-FRAME database of the Italian National Statistical Office (ISTAT), which reports information on export values and employment dynamics. The econometric analysis applies Structural Equations Models (SEM) and a two-step counterfactual analysis. Results show that export activities, spurred by engagement in innovation efforts, represent a powerful transmission channel through which innovation displays its effect on firms’ growth. Moreover, results highlight the existence of some heterogeneity in the capacity of different types of innovation activities, i.e., standard-innovation and eco-innovation to leverage the export channel to foster firms’ growth. In particular, the empirical evidence has identified a stronger indirect export-mediated impact for Efficiency-improving (EFI) than for Pollutionreducing (PR) Eco-innovation.
    Keywords: Eco-innovation, Export-mediated effect, Innovation-growth nexus
    JEL: Q52 Q55 L25
    Date: 2024–03
  13. By: Heiduk, Felix
    Abstract: Diversifying Germany's bilateral partnerships in the Indo-Pacific is one of the central goals of German policy. On the one hand, this diversification aims to reduce economic dependence on China, and on the other - in the context of systemic rivalry with authoritarian states - to bring about cooperation with states that share common values with Germany, so-called Wertepartnern (value-based partners). However, it is not clearly defined which values are fundamental to value-based partnerships. It also remains unclear which states in the Indo-Pacific are referred to as value-based partners and how these value-based partnerships differ from "normal" bilateral relations with other states in the region. Instead, this study shows that the significance that is rhetorically attached to cooperation with value-based partners is at odds with the vague concept of "value-based partnership" and its limited importance as a basis for bilateral cooperation. A comparison of value-based partners with a control group of non-value-based partners across different policy areas produces mixed results. The assumed correlation between being categorised as a value-based partner and closer international cooperation based on shared norms and values cannot, with any coherence, be demonstrated empirically. A comprehensive revision of the hitherto diffuse concept of value-based partnerships is recommended - either by normative sharpening, combined with a narrowing of the circle of states designated as value-based partners, or by eradicating the term from the political vocabulary.
    Keywords: Germany, value-based partnerships, Indo-Pacific, Singapore, Australia, Japan, South Korea, New Zealand
    Date: 2024

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