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on South East Asia |
| By: | Quang-Thanh Tran (Research Center for Policy Design, Graduate School of Economics and Management, Tohoku University; Development and Policies Research Center); Duc-Thinh Bui (Development and Policies Research Center); Minh-Chau Pham (Development and Policies Research Center); Anh Ngoc Nguyen (Development and Policies Research Center) |
| Abstract: | Viet Nam has reached upper-middle-income status in 2025 and has set its sights on high-income status by 2045. To achieve this goal, it must sustain, on average, a per-capita growth rate of at least 7 percent a year for two decades, something most middle-income economies have never succeeded in doing. In this paper, we analyze what may stand in Viet Nam's way, via five channels: demography and labor, industrialization, infrastructure, institutions, and technology. Benchmarking Viet Nam against the East Asian economies that graduated to high income, and against Southeast Asian peers of comparable size, we find that each constraint binds earlier in Viet Nam's income trajectory than it did for any successful graduate. The demographic window is closing at a lower income level; manufacturing has plateaued, with low domestic value added in exports remaining a chronic problem; infrastructure quality and institutional capacity remain short of what higher-value production requires; and the country is currently underutilizing the human capital it builds. Against this diagnostic, we assess the government's 2024--2026 reform program and recommend where it needs to go further: industrial and infrastructure deepening, labor formalization, technology absorption and institutional and competition reform. |
| Keywords: | middle-income trap, Viet Nam, industrialization, global value chains, productivity, demographic transition, human capital, institutions |
| JEL: | O11 O14 O25 O40 O53 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:dpc:wpaper:0202 |
| By: | Hoang Ha Nguyen; Van Lam Do; Van Thang Ta |
| Abstract: | The article uses data on Vietnamese enterprises from 2010 to 2023 to assess theimpact of the Global Minimum Tax (GMT) on the FDI sector and domestic enterprises. The resultsshow that GMT has a negative and statistically significant e!ect on fixed asset investment, profits, and revenues of FDI firms, while domestic enterprises respond positively in the short term. Thesefindings imply that Vietnam needs to quickly adjust its FDI attraction strategy, shifting from taxincentives to improving institutional quality, infrastructure, and domestic capacity, while alsorefining tax policy to both secure budget revenues and maintain investor appeal in the newcontext. |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:dpc:wpaper:0201 |
| By: | Rischan Mafrur; Fadli Ikhsan Pratama; Khadijah |
| Abstract: | Indonesia has established a regulated carbon market supported by national registry infrastructure and the IDXCarbon exchange. Carbon units can be issued, recorded, traded, and retired within this framework. IDXCarbon currently uses a private blockchain for its trading infrastructure. This creates an opportunity to examine how Indonesian carbon credits could also be represented and traded through public blockchain infrastructure. This study proposes an architecture for tokenizing Indonesian carbon credits as real-world assets (RWAs), with particular focus on Sertifikat Pengurangan Emisi Gas Rumah Kaca (SPE-GRK). The proposed architecture retains the Sistem Registri Unit Karbon (SRUK) as the authoritative source of carbon-unit status. It introduces a public-blockchain layer for token representation and programmable transactions. The architecture is designed to support lifecycle management, token-based asset representation, public observability of token activity, interoperability, wallet-based transactions, and programmable settlement. The architecture consists of four layers: the authoritative carbon layer, the registry interoperability and tokenization layer, the public-blockchain RWA layer, and the market and application layer. Access to the tokenized carbon assets remains regulated. Token issuance and transfers are linked to participant eligibility and registry status. Retirement also remains dependent on the authoritative carbon registry. The proposed architecture provides a framework for introducing public-blockchain RWA infrastructure into Indonesia's existing carbon market while maintaining SRUK authority and existing market-integrity controls. |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2608.15597 |
| By: | Depante, Lianne Angelico C.; Dedase, Kirsten Lianne Mae C. |
| Abstract: | Main argument: We argue that the contrasting fortunes of the Taiwan and Philippine semiconductor industries are best explained by the differences in how their respective states deployed industrial policies and institutions in shaping development outcomes, particularly across four key areas: public R&D institutions, industrial governance and strategy, industrial clustering and state-business-academia relations, and scientific and technical human capital policies. Policy landscape: Today, semiconductors are the leading exports for these two political economies. Both their industries started at a more or less similar footing, tracing their origins as assembly, testing, and packaging (ATP) hubs back to the late 1960s. Their paths have since diverged: Taiwan was able to build a fully integrated ecosystem that spans design, fabrication, and advanced packaging and testing, while the Philippines remains largely confined to low-value ATP with no domestic fabrication capacity to date. Methods: The study compares Taiwan and the Philippines as cases that shared a relatively similar starting point in labor-intensive ATP in the late 1960s but diverged in outcomes. We examine the policies and institutional arrangements each deployed, particularly during the critical period from the 1970s to the 1990s, when the foundations of their respective industries were laid. Findings: Taiwan's ascent to global leadership in semiconductor manufacturing was neither haphazard nor simply the outcome of unfettered market forces, but the result of industrial vision combined with strategic orchestration of public R&D (most notably ITRI), industrial clustering in the Hsinchu Science Park, and an educational system tailored to the industry's needs - a purposeful symbiosis of the state, academia, and industry that produced a self-reinforcing ecosystem conducive to industrial upgrading. The Philippines' experience, by contrast, underscores the consequences of fragmented governance, risk-averse public R&D, and an educational system insufficiently oriented towards industrial priorities. Policy recommendations: We propose that developing countries (1) rethink the mandate of public R&D institutions to allow calculated risk-taking and a tolerance for failure; (2) have the state co-invest with the private sector in capital-intensive, strategically important segments of the value chain, socializing not only the risks but also the rewards of public investment; (3) strengthen governance arrangements and expert advisory platforms to overcome information asymmetry and coordination failures; (4) place equal emphasis on building firms' absorptive capacities along with frontier R&D; (5) anchor human capital development explicitly in industrial strategy, including TVET reform and the mobilization of diaspora professionals through "brain circulation"; (6) pursue industrial clustering as a deliberate and coordinated strategy rather than a passive by-product of investment promotion; and (7) strategically leverage the evolving geopolitical landscape to extract developmental concessions, such as technology transfer. Conclusion: For the Philippines and similarly situated economies in the Global South, moving up the technological ladder will require a more proactive approach to industrial policy, institutional reconfiguration, and a fundamental rethinking of how development is understood and pursued. |
| Keywords: | semiconductor industry, Philippines, Taiwan, industrial policy, science and technology, industrial clustering, comparative perspective, public R&D, brain drain, brain circulation, Stanford Microsystems, Hsinchu Science Park, developmental state, comparative political economy, political economy of development |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:342849 |
| By: | Dang, Hai-Anh (World Bank) |
| Abstract: | Vietnam’s goal for high-income status by 2045 requires roughly 5.5% annual growth in income per capita, versus 5% historically. We offer thoughts on whether artificial intelligence (AI) can supply the missing margin. Reviewing the growing AI literature, we find that appropriate policies are instrumental. Vietnam has several advantages, including scoring a high score above what its income predicts on government AI readiness and its AI diffusion rate is rising faster than in any other low-income or middle-income economy. Borrowing results from existing cross-country evidence on digital adoption, we construct three tentative growth scenarios on AI adoption. Broad and deep adoption could help the country reach its goal earlier than the baseline without any adoption. Realizing that dividend depends on four priorities: teachers first, electricity and Vietnamese-language data, an open-source latecomer strategy reaching millions of small firms, and institutions that pay for talent. These findings can be relevant to other developing countries. |
| Keywords: | AI, middle-income, growth, poverty, inequality, Vietnam |
| JEL: | H00 I3 O1 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18867 |
| By: | Manabu Nose (Keio University, Faculty of Economics); Yasuyuki Sawada (University of Tokyo, Faculty of Economics, Graduate School of Economics) |
| Abstract: | Why do transport investments induce polycentric industrial growth in specific instances, rather than reinforcing existing cores? By investigating large-scale Greater Mekong Subregion highway projects in Northern Vietnam, where postwar state-led reconstruction restored monocentric urban structure following wartime devastation, this paper shows that later corridor investments generated nonlinear, polycentric industrial growth. Improved market access induced large manufacturing entry in agrarian peripheries, with effects amplified by local supply-chain depth. A spatial general equilibrium model with input-output linkages replicates this mechanism. The corridor raised income but widened spatial inequality, a trade-off mitigated by feeder-road complementarity. Infrastructure acts as a spatial big push only when connectivity and production networks jointly trigger new clusters. Overall, a structural shift from monocentric battlefield resilience to polycentric market expansion is catalyzed by infrastructure investments. *Revised DP2025-010 |
| Keywords: | spatial structural transformation, market access, agglomeration, input-output linkages, core-periphery |
| JEL: | H54 O14 O18 R11 R12 R42 |
| Date: | 2026–07–05 |
| URL: | https://d.repec.org/n?u=RePEc:keo:dpaper:dp2026-014 |
| By: | NGUYEN, THI NGOC ANH |
| Abstract: | In debates on digital sovereignty, states seek to build the technological and regulatory capacity to govern dependence on foreign digital infrastructures. AI complicates this ambition because its development relies on globally concentrated chips, cloud services, foundation models, capital and technical expertise. This article examines how Viet Nam seeks to build domestic AI capability while remaining integrated into global technology markets. Drawing on qualitative document analysis of Viet Nam’s legal and policy instruments, together with records of foreign AI and infrastructure partnerships, the article conceptualises Viet Nam’s approach as developmental digital sovereignty through controlled interdependence. Viet Nam combines risk-based AI regulation, national AI and data infrastructure, public support for domestic innovation and strategic coordination of technology development with continued foreign investment, research partnerships and technology cooperation. The analysis identifies a non-exclusionary variant of centralised digital sovereignty in which state coordination over infrastructure, data and regulation coexists with continuing foreign participation. It finds stronger evidence of policy aspiration and regulatory access than of material leverage over critical chips, cloud infrastructure or models. However, this strategy remains politically ambiguous. The institutions intended to strengthen domestic compute, data and research capacity also centralise regulatory authority, expand executive discretion and provide limited publicly visible mechanisms for independent oversight. The article argues that developmental digital sovereignty should be assessed through both its capacity to reshape external technological dependence and the accountability conditions governing the domestic exercise of technological power. |
| Date: | 2026–07–27 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:snwfx_v1 |
| By: | Stephan Heblich; Marlon Seror; Hao Xu; Yanos Zylberberg |
| Abstract: | We study the impact of large, successful manufacturing plants on other local producers in China, focusing on "Million-Rouble Plants" built in the 1950s during a brief alliance with the U.S.S.R. The ephemeral geopolitical situation and the locations of allied and enemy airbases provide exogenous variation in plant siting. We find a boom-and-bust pattern: Counties hosting these plants were 80% more productive than control counties in 1982 but 20% less productive by 2010. This decline reflects the performance of local establishments, which exhibit low productivity, limited innovation, and high markup. Specialization hindered spillovers, preventing the emergence of new clusters and local entrepreneurship. |
| Keywords: | Industrial policy; regional development; manufacturing agglomeration; knowledge spillovers; China; economic history |
| JEL: | R11 R53 J24 N95 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26188 |
| By: | Shen Shen (Keio University); Hiroyuki Yamada (Keio University) |
| Abstract: | A stable and accessible power supply is pivotal for economic growth and development. We study the impact of nationwide residential electrification in Cambodia on sectoral employment. Leveraging annual village-level administrative data from 2013 to 2021, we estimate the employment effects of electrification using a novel difference-in-differences estimator designed to accommodate staggered adoption and treatment-effect heterogeneity across groups and over time. In our preferred specification, electrification reduced agricultural employment by around 2.4 percentage points in the long run but raised service employment by only 1.5 percentage points; the agriculture-to-services transition was also more pronounced among working-age women. The magnitude of these estimates is substantially smaller than those reported in earlier studies, consistent with a pattern of premature deindustrialisation in which electrification induces only limited structural transformation. The modest inter-sectoral shift in labour appears to operate through a mix of channels, including agricultural productivity, labour demand, investment in human capital, and migration, although the contribution of each channel, considered in isolation, is minor. Our findings highlight that agrarian workers who detach from the labour market may not necessarily re-enter it when complementary markets and demand are absent. We further underscore the importance of comparing model estimates across alternative constructions of the treatment variable, as the novel estimator we employ permits continuous, discrete, or binary treatments. |
| Keywords: | Electrification; Sectoral Employment; Labour Reallocation; Premature Deindustrialisation; Cambodia |
| JEL: | O22 O14 J21 O53 |
| Date: | 2026–07–23 |
| URL: | https://d.repec.org/n?u=RePEc:keo:dpaper:dp2026-016 |
| By: | Liu, Jianfeng; Ma, Xiaochen; Ma, Yubei; Wan, Yue |
| Abstract: | This study examines how intergenerational co-residence mitigates mental health consequences of widowhood in China. Using longitudinal data (2011-2020) from CHARLS and a staggered difference-in-differences design, we find widowhood increases depressive symptoms by 1.815 points (CES-D scale). However, sustained co-residence with adult children is associated with offsetting approximately 79.6% of this adverse effect. Alternative support mechanisms— financial transfers, visits, and remote communication — provide no comparable protection. Mechanism analysis reveals that co-residence protects by stabilizing social networks rather than by monitoring health behaviors. We quantify protection value at 2, 790 RMB per person-year, translating to 7.4 billion RMB annual social benefits under a 70% co-residence scenario. The non-substitutability of embedded family support implies that policies should prioritize maintaining pre-existing co-residence arrangements rather than relying on crisis-activated or remote support interventions. |
| Keywords: | Health Economics and Policy |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea26:404596 |