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ISEAS Working Papers on Economics and Finance

 

 

 

 

   
 
ISEAS Working Papers on Economics and Finance
 

The Trans-Pacific Partnership: Origin, Evolution, Special Features, and Economic Implications, October 2017. The Trans-Pacific Partnership (TPP) agreement was signed by its 12 members in February 2016 after concluding its difficult and long negotiations. The TPP is an ambitious agreement with high-level of trade and investment liberalization and comprehensive issue coverage, setting a new standard for global trade. Large economic benefits can be expected from the enactment of the TPP. The ratification of the TPP in its agreed form is not possible because of the withdrawal of the US from the TPP. The paper argues that the TPP without the US, or TPP11, should be pursued by remaining 11 members, to keep the momentum toward trade and investment liberalization and to fight against growing protectionism.

Mind the Gap: Explaining Implementation Shortfalls in the ASEAN Economic Community, September 2017. The ASEAN Economic Community (AEC) is at a critical crossroad in terms of policy implementation. ASEAN announced of a significant achievement rate of 93 per cent at the end of 2015. However, effective implementation, described as policy execution that generated tangible benefits for the end-users in their cross-border activities remained patchy. Following the theoretical discussion on policy implementation, this paper postulates that it was the economic conflicts between countries and between firms of a country that led to a broad and accommodative regional policy document, thereby affecting the course of implementation. As implementation is a national issue, organisational conflicts between government agencies and bureaucrats further distorted the final outcome, and hindered progress towards meaningful implementation.

The TPP: Truths about Power Politics, August 2017. Preferential trade agreements are negotiated by states. By definition, they are political in nature. The more powerful the state involved, the more it can shape the trajectory of trade negotiations. The three stages of the TPP – before the US joined, while the US was a TPP member, and the US withdrawal from TPP – reaffirm this political-economic truth. Political interests often trump economic ones when it comes to trade agreements. This paper analyses the three stages of the TPP using the tools of International Relations. It highlights key political truths that are reaffirmed by each TPP stage...

Dynamics of Ride Sharing Competition, July 2017. This paper studies the dynamics of ride-sharing competition. Ride-sharing is modelled as a spatial two-sided market with heterogeneous passengers and drivers, both located on a Salop (1979) circle. The model is simulated to study four aspects of ride-sharing competition:(i) price distribution and dynamics, (ii) strategic pricing, (iii) fixed pricing vs. surge pricing, and (iv) information-sharing. Dynamic platform competition in a spatial setting can generate distinct and persistent bands of fluctuating prices. Space and stochastic luck can mitigate winner-take-all effects in price competition...

Impact of TPP-11 on Japanese Manufacturing Affiliates in ASEAN, July 2017. This paper discusses how tariff reductions through TPP may affect Japanese manufacturing affiliates in ASEAN countries. Without the U.S., there is some uncertainty in the impact of TPP on the investment and expansion plans of Japanese affiliates in Malaysia and Vietnam’s textile and footwear industries. Similarly, it is also uncertain that Japanese affiliates in ASEAN non-TPP member countries will shrink their business in these industries. In the case of other industries, the TPP-11 will not affect Japanese affiliates because market access will not be different between TPP and non-TPP member countries.

Should Thailand Join the TPP? July 2017. This paper reviews the potential gains and losses for Thailand if the country joins the Trans-Pacific Partnership (TPP). Had the United States remained a member of TPP, the preferential market access to the country would be a major source of gains. However, the intellectual property right (IPRs) provisions in the TPP may have adverse impact on pharmaceutical expenditure in Thailand. While there are other issues covered in TPP, these are likely to be either non-binding constraints (e.g. investment agreement) or having effects that are difficult to be quantified across time and space (e.g. government procurement, environmental agreement). While there is belief that the TPP and cumulative ROO in particular could alter supply chain of production network, this is unlikely to occur due to a number of exceptions in the TPP itself.

The Investment Chapter and ISDS in the TPP: Lessons from Southeast Asia, April 2017. The investment chapter and investor-state dispute settlement provisions in the Trans-Pacific Partnership attracted significant media and public attention. This paper shows that ISDS-backed investment treaty commitments, aimed to liberalising and protecting FDI, are already widespread across Southeast Asian countries. However, these countries have been subjected to comparatively few ISDS claims and (very recently) two adverse treaty-based arbitration awards. Meanwhile, investors from Malaysia and Singapore have initiated claims. This backdrop partly explains not only why those two states and the other existing TPP signatories (Vietnam and Brunei) were willing to agree to ISDS-backed commitments in that FTA. It also makes it quite likely that ISDS provisions are not likely to become deal breakers for countries such as Thailand, the Philippines and even Indonesia in future trade agreements...

Labour Provisions in Trade Agreements with Developing Economies: The Case of TPPA and ASEAN Member Countries, March 2017. Labour provisions have been increasingly included in bilateral and regional trade arrangements. One recent example was the Trans-Pacific Partnership Agreement (TPPA), signed by twelve countries in 2016 but abandoned by the US in early 2017. Even though the ratification of the TPPA remains uncertain, it has set a precedent in trade policy. This is likely to influence the formulation of trade agreements involving ASEAN countries in the future. This paper examines the implications of the TPPA labour chapter in the context of ASEAN countries that have participated in the agreement. It discusses the extent these countries need to undertake domestic reforms in terms of labour rights and standards.

Evolving Paradigms in Regional Development in Malaysia, October 2016. In seeking to foster economic growth, policy-makers in Malaysia have also had to grapple conceptually and operationally with how best to deal with differing income levels in different parts of the country. In addition, this challenge has changed in nature over time, in line with the country’s increasing wealth and urbanization, and as understandings of what regional development is and how it should be pursued have evolved. Over the decades, approaches have shifted away from a sole focus on rural development and an aspatial approach to regional development towards a greater emphasis on urbanization and a deeper understanding of the relationship between location and economic growth...

The Impact of Local Content Requirements on the Indonesian Manufacturing Industry, October 2016. Local content requirements (LCRs) are prohibited under the WTO law as they violate several WTO provisions including the national treatment principle. Nonetheless, many countries, including Indonesia, persistently use LCRs as part of their industrial policies. Countries implement LCRs for various reasons, including to protect local industries; to create employment; to boost export; to enhance local innovation capacity; and to support broader economic development in the country. This paper examines the impact of LCRs in manufacturing sector in Indonesia, with a particular interest on the machinery and transport industries. Since LCRs discourage foreign imports, hence it is expected they may affect firm’s use of imported inputs...

Reassessing Malaysia’s Export Opportunities in the TPP, September 2016. The main economic motivation for forging bilateral, regional and multilateral agreements for Malaysia is to enhance the export opportunities for its firms as it is relatively dependent on trade for supporting growth. There is an extensive literature on the Trans-Pacific Partnership (TPP) since negotiations were started five years ago and this literature continues to grow after the agreement was signed in February 2016. The literature identifies some overall gains for Malaysia and some sectoral gains, especially in textiles and apparel. The objective of this paper is to re-assess these export opportunities, using a comparative country perspective since the TPP has 12 founding members...

Determinants of Singapore’s Outward FDI, February 2016. Outward foreign direct investment (OFDI) has been an important element in Singapore’s economic strategy since the 1990s, with the government providing direct and indirect support to support the internationalization process. Recent OFDI trends indicate that China has become an important destination for Singapore. In ASEAN, Singapore’s main investment markets are Indonesia, Malaysia and Thailand. The Singapore’s OFDI has important sectoral dimensions, supported by evidence from econometric analysis. It is also important to distinguish between OFDI stock and flows. Further research is needed to understand the erratic behavior of flows in the region.

A Review of the Recent Literature on the Institutional Economics Analysis of the Long-Run Performance of Nations, January 2016. This paper reviews the recent (post-2000) literature which assesses the importance of institutions as a factor determining cross-country differences in growth rates or in the contemporary level of “prosperity”. It first sketches how institutional economics has evolved. It then examines critically the methods of analysis employed in the recent literature. The paper finds that this literature has made a major contribution to the analysis of the causes of economic growth but the relative importance of institutions as a determinant of long-run growth and prosperity is still a wide open question.

What Lies Ahead for Malaysian Healthcare? December 2015. Healthcare in Malaysia has been characterised by a strong public sector presence where government hospitals and clinics acted as a primary source of care. The healthcare system has also been lauded as a model for other developing countries to follow as it has succeeded in improving the health status of Malaysians over time. With the rising costs of healthcare over the last three decades, the government is now facing increasing pressures to restructure its healthcare system. Social healthcare insurance, corporatisation, and privatisation have been increasingly seen as possible measures to supplement the current healthcare system dominated by the public sector...

Malaysia’s Protracted Affirmative Action Policy and the Evolving Bumiputera Commercial and Industrial Community, December 2015. This paper examines the evolution of the Bumiputera Commercial and Industrial Community (BCIC) in the context of Malaysia’s protracted affirmative action from 1971 to the present. It explores, on one hand, how the state has responded to the demands of different Malay pressure groups and, on the other, to external shocks arising from economic globalization. These external factors have compelled the state to deregulate and liberalize its economic policies which run contrary to the goal of promoting the development of a BCIC...

(De)centralization and the Missing Middle in Indonesia and Malaysia, September 2015. Indonesia and Malaysia were both initially characterized by a powerful, centralized state apparatus and “soft authoritarianism”. Following the Asian Financial Crisis, they have had very different trajectories. In tandem with a transformative political liberalization process, Indonesia has implemented far-reaching decentralization reforms. Malaysia’s political context has remained relatively static, and it has proceeded to centralize important aspects of governance. Notwithstanding this initial difference, both cases display a notable similarity – the re-scaling of state power has occurred at the expense of the meso-level – provinces in Indonesia and states in Malaysia...

AEC Vision Post-2015: Is an ASEAN Customs Union Feasible? February 2015. This paper explores the feasibility of the ASEAN Economic Community (AEC) moving forward to the next step of economic integration, i.e. towards an ASEAN Customs Union (ACU) post-2015. Effectively, the way to progress towards an ASEAN custom Union is by forming it among ASEAN-9 members with Singapore maintaining its existing zero tariff against non-members, thereby creating a Partial ACU. Using applied general equilibrium modelling exercise based on GTAP, the findings suggest that there are potential net positive welfare gains to be collectively reaped by ASEAN if it moves from an AFTA to a partial ACU post-2015. However, not all ASEAN members will individually gain from such an ACU and members may need to potentially devise a mechanism wherein some member country welfare losses in an ACU can be compensated by the members who gain...

The Regional Comprehensive Economic Partnership: New Paradigm or Old Wine in a New Bottle? November 2014. ASEAN is currently negotiating the Regional Comprehensive Economic Partnership (RCEP) agreement with its six trading partners. The RCEP has the potential to expand into a Free Trade Agreement of the Asia-Pacific (FTAAP) as it intends to harmonise rules and regulations across multiple overlapping trade agreements in the region. However, it faces challenges. The mention of a flexibility principle and the “ASEAN Way” of decision-making has led many to believe that the RCEP will be yet another low-quality trade agreement in the region. As such, the RCEP presents all ASEAN members an opportunity to take a central role in setting the agenda for a region-wide agreement. Hence, ASEAN must make efforts to attain an attractive RCEP vis-a-vis other competing regional agreements. Accordingly, this paper highlights what the RCEP is, how it has emerged and the issues that might affect the agreement’s final quality in order to evaluate it as a new paradigm or a repackaged version of ASEAN’s existing trade agreements.

The Evolution of the Electronics Industry in the SIJORI Cross Border Region, September 2014. In the early 1990s, Singapore, the Malaysian state of Johor, and the Indonesian island of Batam sought to leverage their proximity, differing comparative advantages, and good logistics connections to market themselves as an integrated unit. After an initial phase of enthusiasm and considerable investment from electronics multinationals, attention regarding the cross-border region waned in the wake of the Asian Financial Crisis. Using data from investment authorities in Indonesia and Malaysia, as well as a number of firm interviews, this paper traces the evolution and current status of the electronics industry in Batam and Johor.

The Exporting and Productivity Nexus: Does Firm Size Matter? August 2014. The main purpose of this study is to examine whether the relationship between exporting and productivity differs across firm sizes in the Malaysian manufacturing sector. A firm-level panel data from the Study on Knowledge Content in Economic Sectors in Malaysia (MyKE) is used in the study. Overall, exporters were found to be more productive than non-exporters. This productivity gap becomes less important as firms become larger. There is evidence that the selection process for exporting is binding only for small firms. Policies that are meant to encourage small firms to export need to focus on enhancing human capital and foreign ownership.


1(2005): Rahul Sen, Enhancing Bilateral Economic Linkages Through New Regionalism: The Case of thge Agreement between New Zealand and Singapore for a Closer Economic Partnership (ANZSCEP), 2005


2(2004): Linda Low,
Policy Lessons in Deveopment: Small, Open Economics of Singapore and Abu Dhabi in the United Arab Emirates, 2004


1(2004): Denis Hew and Rahul Sen,
Towards an ASEAN Economic Community: Challenges and Prospectds, 2004


1(2003): Lee Poh Onn, The Water Issue Between Singapore and Malaysia: No Solution in Signt? 2003


5(2002): Arumugam Rajenthran, Malaysia: An Overview of the Legal Framework for Foreign Direct Investment, 2002


4(2002): Arumugam Rajenthran, Indonesia: An Overview of the Legal Framework for Foreign Direct Investment, 2002


3(2002): Ramkishen S. Rajan and Rahul Sen, International Trade in Services in Selected ASEAN Countries: Telecommunications and Finance, 2002


2(2002): Ngiam Kee Jin and Lixia Loh, Developing a Viable Corporate Bond Market: The Singapore Experience, 2002


1 (2002): Tracy Yang, Crisis, Contagion, and East Asian Stock Markets, 2002


1(2001): Tracy Yang and Reza Siregar, An Empirical Examination of the Stock Market Returns in Selected Asia-Pacific Economies in the Pre- and Post-Financial Reform Period, 2001


7(2000): Tracy Yang and Paul Vandenberg, Selected East Asian Stock Markets in the Context of Financial Liberalisation: Prior to the Crisis, 2000


6(2000): Ramkishen S. Rajan and Tracy Yang, Devaluation of the Baht and Economic Contraction in Thailand, 2000


5(2000): Sakulrat Montreevat, Impact of Foreign Entry on the Thai Banking Sector: Initial Stage of Bank Restructuring, 2000


4(2000): Nick J. Freeman, A Regional Platform for Trading Southeast Asian Equities: Viable Option for Lofty 'Red Herring'? 2000


3(2000): Nick J. Freeman and Frank L. Bartels, Portfolio Investment in Southeast Asia's Stock Markets: A Survey of Institutional Investors' Current Perceptions and Practices, 2000


2(2000): Nick J. Freeman, Foreign Portfolio Investors' Approaches to Thailand's Equity Market: Survey Findings and Preliminary Analysis, 2000


1(2000): Nick J. Freeman, Constraints on Thailand's Equity Market as an Allocator of Foreign Investment Capital: Some Implications for Post-Crisis Southeast Asia, 2000


9(1999): Frank L. Bartels and Nick J. Freeman, Multinational Firms and FDI in Southeast Asia: Post-Crisis Perception Changes in the Retail-Oriented Manufacturing Sector, December 1999.


8(1999): Kim Ong-Giger, Japanese IT Development: Implications for FDI in Southeast Asia, September 1999


7(1999): Carolyn L. Gates, ASEAN’s Foreign Economic Relations: An Evolutionary and Neo-Institutional Analysis, May 1999


6(1999): Kim Ong-Giger, Southeast Asian Economies in Crisis: The Emergence of Pax Capitalia, April 1999


5(1999): Tin Maung Maung Than, The Political Economy of Burma’s (Myanmar’s) Development Failure 1948-1988, March 1999


4(1999): Carolyn L. Gates, The East Asian Crisis and Global Integration: Mismanagement and Panic Revisited or a New Beast?, March 1999


3(1999): George Abonyi, Thailand: From Financial Crisis to Economic Renewal, March 1999


2(1999): Anita G. Doraisami, The Malaysian Currency Crisis: Causes, Policy Response and Future Implications, February 1999


1(1999): Myat Thein, Improving Resource Mobilization in Myanmar, January 1999


5(1996): Mya Than, The Golden Quadrangle of Mainland Southeast Asia: A Myanmar Perspective, July 1996


4(1996): Carolyn L. Gates, Enterprise Adjustment and Economic Transformation: Industrial Enterprise Behaviour and Performance in Vietnam during Stabilization and Liberalization, June 1996


3(1996): Helen Hughes, Perspectives for an Integrating World Economy: Implications for Reform and Development, May 1996


2(1996): Reza Y. Siregar, Inflows of Portfolio Investment to Indonesia: Anticipating the Challenges Facing the Management of Macroeconomy, March 1996


1(1996): Nick J. Freeman, Portfolio Investment in Vietnam: Coping Without a Bourse, February 1996

 
 
 
 

Source: Institute of Southeast Asian Studies, Singapore