Journal of Southeast Asian Economies Vol. 30/3 (Dec 2013)

Journal of Southeast Asian Economies Vol. 30/3 (Dec 2013)
Date of publication:  December 2013
Publisher:  Institute of Southeast Asian Studies
Number of pages:  108
Code:  AE30/3


  • Journal of Southeast Asian Economies Vol. 30/3 (Dec 2013)
    [Whole Publication]
  • Preliminary pages
  • The Early Effects of Preferential Trade Agreements on Intra-Regional Trade within ASEAN+6 Members, by Rahul Sen, Sadhana Srivastava, Gail Pacheco, authors
    This study analyses the early effects of recent bilateral and regional Preferential Trade Agreements (PTAs) involving the ten-member Association of Southeast Asian Nations (ASEAN) grouping, as well as Australia, New Zealand, China, India, Japan and Korea. We utilize an augmented gravity model with this ASEAN+6 group of countries to examine the impact of membership in a bilateral versus a plurilateral PTA for the period of 1994 to 2006. The traditional gravity model is augmented by separately estimating the effects of bilateral memberships against plurilateral PTA memberships. Disaggregated country-by-country results indicate that plurilateral PTAs have had a more significant impact, relative to bilateral PTAs,  in stimulating trade among the ASEAN+6 countries, in this initial period of new regionalism in Asia.
  • Foreign Direct Investment, Exports and Real Exchange Rate Linkages in Vietnam: Evidence from a Co-Integration Approach, by Thi Hong Hanh Pham, Thinh Duc Nguyen, authors
    Several studies, either theoretical or empirical, have analysed the possible connection either between foreign direct investment (FDI) and real exchange rates (RER) or between exports and RER. It is surprising, however, that the triangular relationship between exports, FDI and RER has not been thoroughly investigated. Using data from Vietnam, this paper attempts to fill this gap by econometrically investigating the linkages between these three variables in a co-integration framework. We find, firstly, that RER may directly affect the relative price of export goods and, secondly, that RER indirectly influences Vietnam’s exports through FDI. <br>
  • Financial Sector Development and Income Inequality in Vietnam: Evidence at the Provincial Level, by Le Quoc Hoi, Chu Minh Hoi, authors
    Patterns of income distribution can be influenced by financial sector development. Using provincial-level data, this paper empirically investigates the relationship between financial sector development and income inequality in Vietnam from 2002 to 2008. The results indicate that financial sector development has a positive impact on reducing income inequality; this is consistent with the bulk of theoretical and empirical research. The results also confirm that financial sector development and education have joint effects on reducing income inequality. We also find no evidence to support the Greenwood-Jovanovic hypothesis of an inverted U-shaped relationship between the development of the financial sector and income inequality.
  • Cambodia’s Comparative Advantage Patterns and Trade Structure from 1985 to 2010, by Souksavanh Vixathep, author
    This paper examines the structure of international trade and evaluates the patterns of Cambodia’s comparative advantage from 1985 to 2010 using the Revealed Comparative Advantage (RCA) index. It is found that: (i) Cambodia’s exports were initially concentrated in some primary goods and basic manufactures; (ii) resource-based exports shifted to light and labour-intensive industrial products in the mid-1990s; (iii) trade diversification is still low&nbsp; despite government efforts in industrial development and trade integration; and (iv) intraindustry specialization occurs in the relatively low value-added product ranges. Consequently, Cambodia needs to build a solid base for industrialization—both physical and institutional—to further develop infrastructure; enhance human resource development; develop competitive and diverse export industries; and&nbsp; implement sound trade, investment and education policies. <br>
  • Determinants of Relative Demand for Imported Beef and a Review of Livestock Self-Sufficiency in Indonesia, by Risti Permani, author
    This paper reviews the challenges facing Indonesia’s self-sufficiency programme. It analyses the determinants of change in relative demand for imported beef by using the Vector Error Correction Model (VECM) based on annual data from 1992 to 2010. It also investigates the&nbsp; long-run relationships between relative domestic price and relative import quantity to predict the impact of decreased reliance on imported beef using Impulse Response Functions (IRFs). The results suggest that increased income in Indonesia is associated with increased relative demand for imported beef. A shock in relative import quantity, as a result of a government decision to cut beef import quotas, for example, would have long-term impacts on relative domestic price.
  • Developing Timor-Leste’s Non-oil Economy: Challenges and Prospects, by Sonny Harry B Harmadi, Rui A Gomes, authors
    Timor-Leste, which regained its independence on 20 May 2002, is one of the most oil- dependent countries in the world. Its total Petroleum Fund savings are in excess of US$12 billion and are a primary source of government revenue. Given the volatility of oil prices, the Timor-Leste government has been placing greater emphasis on developing its non-oil economy. Together with its development partners, it has laid out various plans to improve non-oil sectors. In July 2011, Prime Minister Xanana Gusmão launched the Strategic Development Plan (2011–30), which sets out the nation’s long-term goals for economic growth and poverty reduction. According to a 2007 Timor-Leste Survey of Living Standards, about half of the<br>population lived below the national poverty line; estimated at US$0.88 per capita per day. More than 80 per cent of the people in Timor-Leste depend on subsistence agriculture using very simple and traditional methods; they are therefore highly exposed to food insecurity. This article argues for an integrated and ambitious rural development strategy (with infrastructure) to promote sustainable economic development in Timor-Leste. Public investment should be linked to the rural farm economy as well as to the rural non-farm economy in order to reduce poverty. The combination of both farm and non-farm economies will reduce the risk of failure in promoting rural development.
  • Fiscal Policy Challenges in Developing Countries: The Indonesian Experience in Responding to the Global Financial Crisis, by Anita Doraisami, author
    Developing countries around the world have adopted fiscal stimulus packages to manage the impact of the Global Financial Crisis (GFC). However there is considerable debate in the literature about the efficacy of discretionary fiscal policy in developing countries. This paper examines the Indonesian fiscal stimulus package and contributes to the literature by identifying specific structural and institutional factors which rendered the fiscal stimulus package less effective than it could have been had these features of the economy been taken into account. The paper concludes that developing countries need to be cognizant of country specific structural and institutional features when employing fiscal policy as an economic stabilization tool. <br>
  • BOOK REVIEW: Implications of the Global Financial Crisis for Financial Reform and Regulation in Asia, edited by Masahiro Kawai, David G. Mayes and Peter J. Morgan, by Christopher Napoli, author
  • BOOK REVIEW: Law and Development in Asia, edited by Gerald Paul McAlinn and Caslav Pejovic, by Mitchell Wigdor, author
  • BOOK REVIEW: Infrastructure for Asian Connectivity, edited by Biswa Nath Bhattacharyay, Masahiro Kawai and Rajat M. Nag, by Mulya Amri, author
  • BOOK REVIEW: Competitiveness Analysis and Development Strategies for 33 Indonesian Provinces, by Tan Khee Giap, Mulya Amri, Linda Low, and Tan Kong Yam, by Adiwan Aritenang, author
  • BOOK REVIEW: Malaysia and the Developing World: The Asian Tiger on the Cinnamon Road, by Jan Stark, by Rizwana Abdul Azeez, author

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