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on South East Asia |
| By: | Asian Development Bank (ADB); (Office of Regional Economic Integration, ADB); ; |
| Abstract: | This publication reviews recent developments in East Asian local currency bond markets along with the outlook, risks, and policy options. It covers the 10 members of the Association of Southeast Asian Nations plus the People’s Republic of China; Hong Kong, China; and the Republic of Korea. |
| Keywords: | local currency bond markets, infrastructure financing, ASEAN+3, Malaysia, Indonesia, Philippines, Thailand, Singapore, Republic of Korea, People's Republic of China, Japan, Bond Market Outlook, Impact of US monetary policy |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:asd:wpaper:rps135935-2&r=sea |
| By: | Kenmei Tsubota; Satoru Kumagai; Kazunobu Hayakawa; Ikumo Isono; Souknilanh Keola |
| Abstract: | The purpose of this paper is to evaluate the impact of trade cost reduction on the Asian economy by employing a sub-national level model based on New Economic Geography. Our model comprises seven sectors, including manufacturing and non-manufacturing sectors, and 1,715 regions in 18 countries/economies in Asia in addition to the two economies of the US and the European Union. As a Computable General Equilibrium of New Economic Geography, we have developed a simulation model for multi-region and multi-sector that consists of the agriculture sector, five manufacturing sectors and the service sector. We assume that there are increasing returns to scale in manufacturing and service sectors. We have introduced modal choice and separation of trade costs respect to physical and non-physical infrastructure. While physical infrastructure improvements are expected to have a drastic impact on the distribution of economic activities, we found that the positive effects of physical transport infrastructure improvements are rather limited to the neighboring regions of the projects and that the existing concentrations of economic activities are rather persistent. Furthermore, we also find that, besides the ongoing physical transport infrastructure improvements, further trade facilitation or tackling behind-the-border issues among countries could enhance the prevalence of economic growth in each country. |
| Keywords: | Bangladesh, Brunei Darussalam, Cambodia, China, Hong Kong, India, Indonesia, Japan, Korea, Lao PDR, Macao, Myanmar, Malaysia, Philippines, Singapore, Taiwan, Thailand and Vietnam with rest of the world, Regional modeling, Impact and scenario analysis |
| Date: | 2013–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:004912:5006&r=sea |
| By: | Asian Development Bank (ADB); (Southeast Asia Department, ADB); ; |
| Abstract: | This report presents an assessment of the links among ASEAN and the three subregional programs (Greater Mekong Subregion [GMS], Brunei Darussalam–Indonesia–Malaysia– Philippines East ASEAN Growth Area [BIMP-EAGA], Indonesia–Malaysia–Thailand Growth Triangle [IMT-GT], and the Association of Southeast Asian Nations [ASEAN]) and is the first study that explicitly maps and analyzes the strategic program and institutional links among the three subregional programs and ASEAN. The report is based on desk reviews of official documents; national consultations with governments and private stakeholders; consultations with the secretariats of the three programs and ASEAN; commissioned studies by Asian Development Bank and other international organizations; and independent assessments by academics, practitioners, and research institutions by academics, practitioners, and research institutions. |
| Keywords: | GMS, BIMP-EAGA, IMT-GT, ASEAN, institutional links, regional cooperation and integration, strategy links, program links, subregional programs, regional cooperation programs, program coordination |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:asd:wpaper:rpt135845-2&r=sea |
| By: | Asian Development Bank (ADB); (Southeast Asia Department, ADB); ; |
| Abstract: | This report presents an assessment of the links among ASEAN and the three subregional programs (Greater Mekong Subregion [GMS], Brunei Darussalam–Indonesia–Malaysia– Philippines East ASEAN Growth Area [BIMP-EAGA], Indonesia–Malaysia–Thailand Growth Triangle [IMT-GT], and the Association of Southeast Asian Nations [ASEAN]) and is the first study that explicitly maps and analyzes the strategic program and institutional links among the three subregional programs and ASEAN. The report is based on desk reviews of official documents; national consultations with governments and private stakeholders; consultations with the secretariats of the three programs and ASEAN; commissioned studies by Asian Development Bank and other international organizations; and independent assessments by academics, practitioners, and research institutions by academics, practitioners, and research institutions. |
| Keywords: | regional cooperation and integration, ASEAN, GMS, BIMP-EAGA, IMT-GT, ASEAN economic community, cross-border transport, ASEAN highway network, ASEAN connectivity, ASEAN Secretariat, regional cooperation programs, program coordination |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:asd:wpaper:rpt135922-2&r=sea |
| By: | Asian Development Bank (ADB); (Office of Regional Economic Integration, ADB); ; |
| Abstract: | This publication reviews recent developments in East Asian local currency bond markets along with the outlook, risks, and policy options. It covers the 10 members of the Association of Southeast Asian Nations plus the People’s Republic of China; Hong Kong, China; and the Republic of Korea. |
| Keywords: | bonds, asian bonds, local currency bonds, bond yield curves, liquidity survey, bid-ask spreads, hedging, transaction funding, foreign exchange, capital flows, liquidity, quantitative easing, QE, Federal Reserve, monetary policy, SHIBOR shock, repo, transparency, taxation, greater diversity of investors and traders, cross-border portfolio investment regulation, emerging East Asia, ASEAN+3, Malaysia, Indonesia, Philippines, Thailand, Singapore, Republic of Korea, People's Republic of China, Japan, Bond Market Outlook |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:asd:wpaper:rps136083-2&r=sea |
| By: | Asian Development Bank (ADB); (Southeast Asia Department, ADB); ; |
| Abstract: | This report was produced under the Technical Assistance Grant: Determining the Potential for Carbon Capture and Storage (CCS) in Southeast Asia (TA 7575-REG), and is focused on an assessment of the CCS potential in Thailand, Viet Nam, and specific regions of Indonesia (South Sumatra) and the Philippines (CALABARZON). It contains inventories of carbon dioxide emission sources, estimates of overall storage potential, likely source-sink match options for potential CCS projects, and an analysis of existing policy, legal, and regulatory frameworks with a view toward supporting future CCS operations. The report also presents a comparative financial analysis of candidate CCS projects, highlights possible incentive schemes for financing CCS, and provides an actionable road map for pilot, demonstration, and commercial CCS projects. |
| Keywords: | energy and environment, climate change mitigation, Southeast Asia, carbon market, greenhouse gases, GHG emission, carbon dioxide emission, carbon capture and storage, Clean Development Mechanism, fossil fuels, indonesia, philippines, thailand, vietnam |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:asd:wpaper:rpt135683-2&r=sea |
| By: | Asian Development Bank (ADB); (Office of Regional Economic Integration, ADB); ; |
| Abstract: | The Asian Economic Integration Monitor is a semiannual review of Asia’s regional economic cooperation and integration. It covers the 48 regional members of the Asian Development Bank. This issue includes two theme chapters: i) Toward an ASEAN Economic Community– and Beyond; and ii) World Trade Facilitation Negotiations–Asian Perspectives. |
| Keywords: | ADB, AEC, AEIM, AFTA, ASEAN, ASEAN Economic Community, ASEAN+3, Asia, Bali, economic development, economic integration, FDI, free trade agreement, intraregional bank lending, labor mobility, macroeconomic interdependence, Pacific, PRC, RCEP, regional cooperation, regional public goods, regionalism, subregional cooperation. TPP, trade facilitation, UNCTAD, UNESCAP, WTO |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:asd:wpaper:rps136096-3&r=sea |
| By: | G.A. Diah Utari |
| Abstract: | To be completed. To be completed. To be completed. |
| Keywords: | Indonesia, Growth, Growth |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:7353&r=sea |
| By: | Perry Warjiyo |
| Abstract: | Plenary Session Paper Plenary Session Paper Plenary Session Paper |
| Keywords: | Indonesia, Finance, Monetary issues |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:8002&r=sea |
| By: | Rinaldo Sjahril; Andry Priharta; Andi M. Alfian Parewangi; Hermiyetti |
| Abstract: | To be completed To be completed To be completed |
| Keywords: | Indonesia, Finance, Finance |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:7342&r=sea |
| By: | Asian Development Bank (ADB); (Office of the General Counsel, ADB); ; |
| Abstract: | This publication documents the proceedings of the South Asia Conference on Environmental Justice, held last 24–25 March 2012 at Bhurban, Pakistan. The conference brought together chief justices, senior members of the judiciary, and other legal stakeholders in South Asia, to highlight environmental challenges in the subregion, and devise ways to strengthen the implementation of environmental justice and ensure compliance with environmental laws. The recommendations from the conference led to the adoption of a 14-point Bhurban Declaration establishing green benches across Pakistan and calling for subregional collaboration for educated judiciaries, specialized courts, and cooperation to achieve environmental justice. |
| Keywords: | environmental law, south asia, green justice, bangladesh, bhutan, india, nepal, pakistan, sri lanka, afghanistan, brazil, indonesia, jordan, environmental justice, green benches, environment conference, bhurban declaration |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:asd:wpaper:rpt135570&r=sea |
| By: | Haruhiko Kuroda |
| Abstract: | This paper is an edited version of the text of the Distinguished Persons Lecture delivered by Mr Haruhiko Kuroda, President of Asian Development Bank at ESCAP in Bangkok on 11 November 2010. The region needs to invest in an efficient system of regional infrastructure for a seamless Asia to emerge. This will provide the foundation for Asian common markets and facilitate the creation of an eventual pan-Asian community. None of this will be easy, but it will have to be done by building institutions, harmonizing policies and regulations, developing and aligning standards, and, most crucially, attracting the required capital to the right kinds of regional projects. In these uncertain times, Asia must forge ahead with the challenging and immensely rewarding task of integrating this vast and diverse region to benefit all its citizens and the world at large. This will help boost further growth and prosperity in the region, spread the benefits of growth more widely and evenly and will enhance the region’s competitiveness. It will help reduce poverty and promote greater environmental sustainability. The support and strong partnership of ADB, UNESCAP and other development partners will ensure that the vision of a truly pan-Asian economic community materializes. |
| URL: | http://d.repec.org/n?u=RePEc:unt:wpmpdd:wp/10/13&r=sea |
| By: | Andi M. Alfian Parewangi; Gandy Setyawan; Hairul Triwarti |
| Abstract: | See full paper Matrix of International Trade (MIT) This paper applies Matrix of International Trade (MIT) model to analyze the dynamics of inter-dependencies within APEC member and between Europe, Africa and Middle East. The quarterly portrait for the last ten years (2003Q1-2012Q4) provides interesting dynamics; first, Indonesia, Malaysia, and Thailand gain constant benefit from international trade. Almost reaching its full capacity, Singapore is relatively unable to gain much from the increase of its trading partner’s outlays. India does experience increasing capability to gain from its international trade, and also a better trade polarization, particularly to Middle East and Africa. Second, measured with the increment of net foreign balance (NFB), the average welfare distributed to developed countries (US, Japan, Australia and China) is 20 times higher than the developing ones. Third, China took over and dominates United States on trading with Europe and even Australia since 2007. Fourth, the dependency of developing country group to developed one is averagely 13 times than otherwise. Only Japan and Middle East and Africa have increasing trade dependency on developing country in APEC; Australia and Europe are constant; while United States and China experience declining dependency. Fifth, within APEC, the total trade multiplier of Indonesia with his all trading partners declines; showing its weakening global position. |
| Keywords: | All countries, grouped according to regional arrangement (i.e. FTA's) , Regional modeling, Trade issues |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:6892&r=sea |
| By: | Djoni Hartono; Tony Irawan; Ahmad Komarulzaman |
| Abstract: | To be completed To be completed To be completed |
| Keywords: | Indonesia, Energy and environmental policy, General equilibrium modeling |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:7344&r=sea |
| By: | Asian Development Bank (ADB); (Pacific Department, ADB); ; |
| Abstract: | This publication captures the presentations and discussions of high-ranking government officials and senior representatives from development partners and civil society organizations during the Forum on Building Resilience to Fragility in Asia and the Pacific, held on 6– 7 June 2013 in Manila. The forum aimed to foster stronger partnerships, support new thinking and innovative engagement, and enhance development efforts to better assist countries with fragile and conflict-affected situations. |
| Keywords: | fragility, conflicts, fcas, pacific, pacific region, AusAID, resilience, political stability, fragile states, post-2015 development, civil war, natural disasters, humanitarian emergencies, Dili Consensus, peace building, nation building, crisis management |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:asd:wpaper:rpt136141-2&r=sea |
| By: | Pamuji Gesang Raharjo; Dedi Budiman Hakim; Adler Hayman Manurung; Tubagus Nur Ahmad Maulana |
| Abstract: | See full paper See full paper See full paper |
| Keywords: | Indonesia, Finance, Finance |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:6745&r=sea |
| By: | Titik Agus Setiyaningsih; Andi Alfian Parewangi; Siti Jamilah; Siti Hamidah Rustiana |
| Abstract: | To be completed To be completed To be completed |
| Keywords: | Indonesia, Finance, Finance |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:7340&r=sea |
| By: | Asian Development Bank (ADB); (Economics and Research Department, ADB); ; |
| Abstract: | The Framework of Inclusive Growth Indicators 2013 (FIGI 2013) is the third edition of the special supplement of the Key Indicators for Asia and the Pacific. The framework is composed of 35 indicators used as measures of income and nonincome outcomes of inclusive growth; the processes and inputs that are important to improve access to opportunities, social inclusion, social safety nets; and good governance and institutions. Part I provides a comparative analysis of the improvements achieved by economies in developing Asia based on the rate of progress in the last 2 decades of 20 selected indicators of FIGI and also assesses if the improvements in the indicators in the 2000s accelerated over those in the 1990s. Part II contains updated statistical tables for the 35 FIGI indicators for the economies of developing Asia, along with brief nontechnical analyses of trends and inequalities on account of wealth, location, and sex. |
| Keywords: | Inclusive growth, Indicators, Asian Development Bank |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:asd:wpaper:rpt135929-2&r=sea |
| By: | Djoni Hartono; Nurkholis; Aldi Hutagalung |
| Abstract: | To be completed To be completed To be completed |
| Keywords: | Indonesia, Energy and environmental policy, Energy and environmental policy |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:7346&r=sea |
| By: | Asian Development Bank (ADB); (Regional and Sustainable Development Department, ADB); ; |
| Abstract: | In 2012, the Asian Development Bank (ADB) and the Inter-American Development Bank (IDB) entered into a formal partnership on South–South cooperation. One of the priority topics for this inter-institutional cooperation is inclusive business. Since 2008, the IDB has built up a dedicated program called Opportunities for the Majority (OMJ) for Latin America and the Caribbean with 45 private sector projects worth $250 million, leveraging more than $1 billion of additional investments, and 33 grant-financed technical assistance projects. ADB recently created its Inclusive Business Initiative to provide specific technical assistance and promote private sector investment that benefits the poor and lower-income groups in Asia and the Pacific. This publication summarizes the IDB’s OMJ program and provides recommendations for ADB to learn from Latin America in the pursuit of inclusive business. It is part of the IDB–ADB cooperation on knowledge exchange between the two regional development banks in Latin America and the Caribbean and in Asia and the Pacific. |
| Keywords: | business, investment, Latin America, Caribbean, inclusive business, base of the pyramid, private sector, inclusive growth |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:asd:wpaper:rpt136099-3&r=sea |
| By: | Duy Hung Bui |
| Abstract: | Vietnam is a developing country with a fixed exchange rate regime and the use of foreign currency is under control of the monetary authorities. Hence, like other developing countries, Vietnam also has the parallel exchange market that exists together with the official exchange market though, it is illegal. The existence of the parallel exchange market creates several complications to the State Bank of Vietnam in their attempts to manage the foreign exchange market and the exchange rate. Fluctuations in the parallel market rates affect both the level of international reserves, the position of the economy and portfolio decisions of the public. Therefore, a strong understanding of the parallel foreign exchange market will help the State bank of Vietnam have sound policies in the foreign exchange market. The monetary approach to the parallel foreign exchange market initially developed by Blejer (1978) and then further developed by Agénor (1991) is used. This approach focuses on the disequilibrium in the money market in explaining movements in output, price, the parallel market exchange rate, and change in net foreign assets An increase of money supply by 1% causes the exchange rate in the parallel market depreciated by 0.015%. A 1 per cent devaluation of the official exchange rate would bring about 1.33 per cent devaluation of the parallel market rate. These results bespeak the State Bank of Vietnam’s efforts to reduce the market premium seem to be not success and stimulating economic growth by money supply would lead to deprecation in both markets |
| Keywords: | Vietnam, Macroeconometric modeling, Monetary issues |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:6719&r=sea |
| By: | Asian Development Bank (ADB); (Office of Regional Economic Integration, ADB); ; |
| Abstract: | The question underlying the entirety of this publication is: “How can viable economic corridors be called into existence by dint of government and multilateral support?” The authors answer this question by examining the experience of economic corridor development of different regions from across continents. There are important lessons to be learned for successful corridor development from the experiences of the European Union and South Asia Subregional Economic Cooperation regions. In each case, detailed models were constructed to assess the economic impact of corridor investments. What emerged from a consideration of these two cases (as well as broader discussions) was a framework for evidence-based policy analysis. When key policy makers and stakeholders pursue measurable outcomes for the development of regional economic corridors, the model and data framework (at a standard economic scale of relevance) allows for an investment-relevant development of scenarios, which will be monitored within an effective organizational process. Such a process, with all the elements of an evidence-based policy in place, is highly likely to generate successful economic corridor development, which would realize envisaged opportunities within the regions. Two priority regions in Asia, the Greater Mekong Subregion and the Central Asia Regional Economic Cooperation, face different opportunities. |
| Keywords: | economic corridors, economic cooperation, regional integration, regional cooperation, Central Asia, south asia, southeast asia, inclusive growth, regional development, trade, carec, gms, sasec, mekong, china, eu, europe |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:asd:wpaper:rpt135975-2&r=sea |
| By: | Asian Development Bank (ADB); (Office of Regional Economic Integration, ADB); ; |
| Abstract: | The formation of a Regional Technical Group (RTG) on Aid for Trade for Asia and the Pacific was a key recommendation to emerge from the Aid for Trade Regional Review Meeting at the Asian Development Bank (ADB) headquarters in Manila in 2007 and the Global Aid for Trade Review Meetings at the World Trade Organization in Geneva in 2007 and 2009. Reflecting the principles of country ownership of Aid for Trade, the RTG operates under the stewardship of RTG co-chairs, representatives of Cambodia and Japan. The RTG comprises members from recipient and donor countries involved in formulating and implementing Aid for Trade policies and development agencies in the region. ADB is a member and serves as the Secretariat to the RTG. The RTG started as a pilot project to provide an informal regional forum for discussing Aid for Trade issues and proposals, sharing good practices, taking stock of available analytical work on Aid for Trade in the region, and building partnerships among actors and stakeholders. It seeks to formulate an integrated approach to operationalize Aid for Trade in the medium term. |
| Keywords: | development assistance, trade, aid for trade, aft, asia and the pacific, value chains, global value chains, private sector participation, World Trade Organization, public-private partnership, regional technical group, official development assistance, investment climate, south-south cooperation, trade finance, frontier economies |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:asd:wpaper:rpt135685-2&r=sea |
| By: | Asian Development Bank (ADB); (Regional and Sustainable Development Department, ADB); ; |
| Abstract: | Based on an analysis of gender inequalities, strategies and promising initiatives to countergender discrimination and promote equality between men and women in Cambodia, Kazakhstan, and the Philippines, as well as an inventory of global good legal, economic, and social practices, this report summarizes the findings and recommendations for these countries. It shows how to improve equitable employment opportunities, remuneration, and treatment for women and men at work to support the development of decent work and gender equality good practices in Cambodia, Kazakhstan, and the Philippines. The report is part of a series consisting of: •Good Global Legal Practices to Promote Gender Equality in the Labor Market •Good Global Economic and Social Practices to Promote Gender Equality in the Labor Market •Gender Equality and the Labor Market: Cambodia, Kazakhstan, and the Philippines •Gender Equality in the Labor Market in Cambodia •Gender Equality in the Labor Market in the Philippines. |
| Keywords: | gender, gender equality, labor market, employment, employment policies, women, cambodia, kazakhstan, philippines, gender development, informal employment, gender gaps, labor force, formal employment, labor support policies, women work, women agriculture |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:asd:wpaper:rpt136185-3&r=sea |
| By: | Asian Development Bank (ADB); (Southeast Asia Department, ADB); ; |
| Abstract: | This publication documents the current assessment and strategic investment priorities for the urban development and water sector in Myanmar. It highlights sector performance, priority development constraints, plans and strategies, past Asian Development Bank (ADB) support and experience, support of other development partners, and future ADB support strategy. The document assesses the key development needs of urban development and the water sector in Myanmar, and outlines key ADB initiatives to improve access of the population, including poor urban communities, to basic urban services. The main urban thrusts of ADB’s investments program are rehabilitation and expansion of water supply, sanitation, solid-waste management, drainage, and other basic urban infrastructure in the main cities, complemented by capacity development for urban planning and improved performance in urban services. |
| Keywords: | ADB, Myanmar, urban development, water, sanitation. country sector assessment, country planning document, asian development bank |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:asd:wpaper:rpt135826&r=sea |
| By: | Muhammad Fadli Hanafi; Berly Martawardaya; Andi M. Alfian Parewangi |
| Abstract: | In order to systematically analyze how savings collected from the budget surplus and loan distributed for investment by economic sectors, working capital by economic sectors, and loan affect growth in the long term. The research uses the Solow and Swan model as explained by Mankiw, Romer, and Weil (1992). Type of data is data panel using OLS and GMM estimation technique, and also Granger Test using VECM for the long run bidirectional analysis Savings and Loan perform positive and significant role on economic growth |
| Keywords: | Indonesia, Growth, Growth |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:7238&r=sea |
| By: | Asian Development Bank (ADB); (Southeast Asia Department, ADB); ; |
| Abstract: | This sector assessment, strategy, and road map highlights the Government of Myanmar’s plans and strategies for addressing priority needs for the agriculture, natural resources, and environment sector and identifies possible preliminary areas of international assistance. It assesses key sector development needs by analyzing the strengths, constraints and weaknesses, various risks, and potential threats, as well as the opportunities, including further evolving the development partnership with the Asian Development Bank (ADB). This sector assessment, strategy, and road map also provides lessons learned from other countries in the Greater Mekong Subregion, identifying the specific elements that can help Myanmar in its transition from a centrally planned economy to a more market-based system. Hence, ADB’s reengagement activities will be focused on developing a conducive environment for the sector’s growth. |
| Keywords: | myanmar, mya, food crop subsector, water resources subsector, opportunities, policies, plans, strategy, environment, agriculture, natural resources, rural finance, rural infrastructure, country-based interventions, areas for international assistance |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:asd:wpaper:rpt136157&r=sea |
| By: | Mr Insukindro; Arti Adji; Aryo Aliyudanto |
| Abstract: | After the 2008 global economic crisis, as one of the emerging markets, Indonesia experiences a lot of capital inflows. The increase in capital inflows stimulated economic activities and caused macroeconomic fluctuations. This study focused on the analysis of pull and push factors that affect the portfolio capital inflows to Indonesia. The study utilized structural cointegrated vector autoregressive (SCVAR), impulse responses function (IRF), and variance decomposition (VD) methods. The method of SCVAR has been developed to analyze the shocks to factors relatively affecting the variation of incoming portfolio inflows (equity and bond inflows) to Indonesia, as well as the responses of the portfolio inflows to shocks to these factors.The results indicated that there was a long-term relationship between the variables, so SCVAR approach could be employed in this study. The results of the impulse responses function showed that the portfolio inflows in the form of bonds generated positive response to the unexpected changes of budget deficit and domestic output growth, while the portfolio inflows in the form of stocks generated positive response to the unexpected changes in foreign output growth, domestic output growth, stock price index, and budget deficit. Furthermore, the results of variance decomposition analysis showed that pull factors, i.e. domestic interest rate and current account balance, were the main determinants that explained the variation of portfolio inflows in the form of bonds, while the domestic interest rate and stock price index were the most dominant variables that explained the variation of portfolio inflows in the form of stocks. |
| Keywords: | Indonesia, Macroeconometric modeling, Modeling: new developments |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:7019&r=sea |
| By: | Asian Development Bank (ADB); (Office of Regional Economic Integration, ADB); ; |
| Abstract: | Given the catastrophe in the world’s largest economy and the subsequent unprecedented ultra-easy money policies, policy makers around the world have to face a new environment. The resulting capital flows in emerging market economies were huge and volatile. These flows have been intermediated through the banking sector (Phase One), and through the capital market, especially the fast growing bond market (Phase Two). Benefits and risks arise with these flows. The risks came to the fore after some signs emerged that the quantitative-easing policy in the US may slow down or even reverse, causing a reversal of capital flows. The analysis in this monograph expands on the implications of such a trend for emerging Asia, where financial cycles are falling out of sync with business cycles, reducing the effectiveness of monetary policy and thereby requiring a separate macroprudential policy. |
| Keywords: | capital, liquidity, bond market, regional safety nets, macroprudential, phases of liquidity, capital flows, balance sheet, quantitative easing, QE tapering, procyclicality, non-core liabilities, money, money printing, money supply |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:asd:wpaper:rpt136042-3&r=sea |
| By: | Asian Development Bank (ADB); (Economics and Research Department, ADB); ; |
| Abstract: | The economy of Kazakhstan has performed remarkably well since gaining independence in 1991, with per capita income approaching $13,000. This excellent performance has been the result of both sound macroeconomic policies and a favorable investment climate. However, Kazakhstan’s economy remains heavily dependent on oil, and this dependence is increasing. While in 2000, petroleum accounted for 50% of total exports, by 2010 it represented 61%. Moving forward, Kazakhstan’s strategic development objective is long-term sustainability, which requires diversifying the economy and upgrading the human capital base. Starting in 2010, the Government of Kazakhstan has put in place new programs to increase economic diversification. This report analyzes the degree of diversification of Kazakhstan’s economy during the last 15 years. Using export data, the report documents that, surprisingly, in 2010 Kazakhstan exported fewer products with comparative advantage (the measure of diversification used in this report) than it did one decade ago. Second, the report summarizes the experiences and lessons of Australia, the People’s Republic of China, the European Union, the Republic of Korea, Malaysia, and the United States, in modernizing industrial policy tools. And third, the report emphasizes that given that industrial policy should be stage-ofdevelopment dependent, Kazakhstan should implement a modern indirect industrial policy program and a risk-management framework, through the financial markets. |
| Keywords: | kazakhstan, kazakhstan economy, kazakhstan industry, kazakhstan GDP, economic diversification |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:asd:wpaper:rpt136049-3&r=sea |
| By: | Sayuri Shirai (Professor of Economics, Faculty of Policy Management at Keio University, Japan. (http://www.paw.hi-ho.ne.jp/~sshirai/)) |
| Abstract: | The subprime mortgage crisis erupted in the United States in mid-2007 and was then transformed into the global financial crisis after the failure of Lehman Brothers in September 2008. The total amount of write-downs of loans and securities by financial institutions for 2007-2010 is estimated to reach $1 trillion in the United States, $604 billion in the United Kingdom, and $814 billion in the Euro Area. By contrast, the Asia-Pacific region is expected to have write-downs of only $210 billion, suggesting the limited damages incurred on the banking sector. Nonetheless, the Asia-Pacific region suffered from the global financial crisis through two channels. One channel was mainly through capital withdrawals from equity markets by foreign investors, causing a sharp drop in stock prices. The other channel was through trade linkages with advanced nations. Nearly all countries faced a contraction in exports and production owing to an abrupt decline in import demand in the United States and Europe. This paper analyses how the Asia-Pacific region was affected by the global financial crisis. To do so, the paper focuses on cross-border capital flows and investment patterns by looking at the pre-crisis features of the United States in relation to the world, as well as the Asia-Pacific region. It also focuses on net international investment positions of the Asia- Pacific region in the pre-crisis period. The paper then sheds light on the impact of the global financial crisis on the cross-border capital flows and the balance of payments in the region. * Professor |
| URL: | http://d.repec.org/n?u=RePEc:unt:wpmpdd:wp/09/04&r=sea |
| By: | Anda Nugroho; Rita Helbra Tenrini |
| Abstract: | A large portion of the Indonesian population is entering the middle-class as its economy is growing rapidly. Nielsen, a leading media research said that currently, middle class in Indonesia is the third-largest in the world. There are about 74 million middle classes in Indonesia, and this number will double by 2020. In the other hand, economic growth also creates a problem of rising inequality. Inequality in Indonesia is worsened as the Gini index increasing from 0.308 in 1999 to 0,41 in 2011. Both conditions, rising middle class and increasing inequalities create a challenge for policy maker to design optimal Personal Income Tax (PIT) system that can capture the tax potential from middle class growth and at the meantime improving the inequality. In developing countries like Indonesia the tax system has been aimed at increasing government revenues as for the past 10 years, the personal income tax revenue has increased from 19,5 trillion rupiah in 2002 to 83,3 trillion rupiah in 2012. More than that, the income tax is also supposed to be used as a public policy instrument to alter after-tax income distribution. The purpose of this paper is to design a personal income tax system that can capture the increase in tax potential as the middle class growth and also promote better income distribution in Indonesia. Using microsimulaiton and Computable General Equilibrium (CGE) approach, we quantitatively analyze the way proposed PIT system affect government revenue and alter the inequality of the income distribution. First, we propose some PIT systems and quantify the way they affect after tax income by using the micro data. Next, we employ CGE model and execute the simulation to calculate the effect of proposed PIT systems on the Indonesian economy. We use Indofiscal (2011), a CGE model of the Indonesian economy with a focus on fiscal policy. The model has capability of evaluating a range of fiscal policy, including personal income taxes. The research seeks to design a personal income tax system that can capture the increase in tax potential as the middle class growth and also promote better income distribution in Indonesia. The result will help the policy makers to design a better income tax system in responding to the current situation of middle income growth and rising inequality. |
| Keywords: | Indonesia, Tax policy, Impact and scenario analysis |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:7017&r=sea |
| By: | World Bank |
| Keywords: | Health Monitoring and Evaluation Water Supply and Sanitation - Hygiene Promotion and Social Marketing Housing and Human Habitats Water Supply and Sanitation - Urban Water Supply and Sanitation Water Supply and Sanitation - Town Water Supply and Sanitation Communities and Human Settlements Health, Nutrition and Population |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:19287&r=sea |
| By: | Tadashi Kikuchi |
| Abstract: | Author used the data of Vietnam Population Census 1989, 1999, 2009 and estimated inter regional labor migration function of Vietnam. Based on the method of system approach of Poot (1986), author adapted it to Vietnamese data and also studied the convergence speed of the migration function. The method of system approach is applied to the Vietnam Population Census Data 1989, 1999, 2009. Estimation of migration function is OLS methods. More information is mentioned in attached summary. Author states here, in brief, four interesting findings in the paper. (1)Apart from dynamical in and out migration all over the country, Vietnam, from the end of 1980s to the early of 2000s, author shows the evidence that there exists regional inflow and out flow of migrations between Hochiminh city and its neighbor provinces. (2)There exists a decrease, “slow down,” of the influence on the in – migration power in all provinces in Vietnam. For example, during the years that economic recession was covering over developing countries from 1990s to the early of 2000s, high regional average income became less attractive to make labor force in – migrate from outside into the region/province. (3)Coincidently, neighbor provinces of Hochimonh, such as Dong Nai, Binh Duong, started industrialization and regional development from 1990s to the early of 2000s. This resulted in an inverse labor inflow from the region with high income Hochiminh city to regions with low income neighbor provinces of Hochimonh. (4)Based on these finding, author then extended the model to study on long term labor migration. Author estimated ECM, error correction model, and showed that the coefficient of convergence to the long term model is – 0.534. It means that Vietnamese migration would converge by nine ty percent until 2020, and ninety nine percent until 2050. |
| Keywords: | Vietanman, Developing countries, Regional modeling |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:6998&r=sea |
| By: | World Bank |
| Keywords: | Environmental Economics and Policies Public Sector Economics Economic Theory and Research Social Protections and Labor - Labor Policies Finance and Financial Sector Development - Debt Markets Environment Public Sector Development Macroeconomics and Economic Growth |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:19326&r=sea |
| By: | World Bank |
| Keywords: | Finance and Financial Sector Development - Microfinance Governance - National Governance Law and Development - Corporate Law Finance and Financial Sector Development - Debt Markets Private Sector Development - E-Business |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:19318&r=sea |
| By: | Kusdhianto Setiawan; Koichi Maekawa |
| Abstract: | The standard vector error correction (VEC) model assumes the iid normal distribution of disturbance term in the model. This paper extends this assumption to include GARCH process. We call this model as VEC-GARCH model. However as the number of parameters in a VEC-GARCH model is large, the maximum likelihood (ML) method is computationally demanding. To overcome these computational difficulties, the first part of this paper searches for alternative estimation methods and compares them by Monte Carlo simulation based on a relatively small scale VEC-GARCH model; an unrestricted VECM equation system with three variables and lag of 1. After rewriting VEC-GARCH model into Seemingly Unrelated Regression (SUR) model we apply a feasible generalized least square (FGLS) estimator. As a result FGLS estimator shows comparable performance to ML estimator. Furthermore a small scale of empirical study is presented to see the applicability of the FGLS. In our simulation we found that the performance of FGLS-GARCH estimator is as good as that of MLE and both estimators are better than OLS and the standard VECM that ignore the error structure.we apply a VEC-GARCH model to real international asset pricing data and test conditional CAPM by using FGLS-GARCH estimation strategy. Since our model is relatively large; it is involving 12 stock market indexes, computational problems arise in estimating the expected returns under VEC-GARCH model and in testing the conditional CAPM by using MLE. Considering the heteroscedasticity and cross-correlation in the error terms of international stock market returns, International Capital Asset Pricing Model (CAPM) is reinvestigated under SUR with GARCH (SUR-GARCH) errors. We modified FGLS estimator to take into account multivariate GARCH error structure in estimating the model. World market portfolio was constructed to ensure that the market portfolio is mean-variance efficient under no restriction on short selling and borrowing at riskless rate. CAPM fits well only on ex-post SUR test, but it is rejected on SUR-GARCH for both ex-ante and ex-post test. However, this paper found that CAPM could be applied for most stock market indexes when each equation was analyzed individually. |
| Keywords: | United States, United Kingdom, Germany, Singapore, Hong Kong, Argentina, Brazil, China, Indonesia, Malaysia, Mexico, Forecasting and projection methods, Finance |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:7002&r=sea |
| By: | Armida Alisjahbana |
| Abstract: | Special Address EcoMod2014 Special Address EcoMod2014 Special Address EcoMod2014 |
| Keywords: | Indonesia, Modeling: new developments, Modeling: new developments |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:7999&r=sea |
| By: | Asian Development Bank (ADB); (Regional and Sustainable Development Department, ADB); ; |
| Abstract: | Increasing job opportunities and decent work for women are essential for advancing economic and social development in countries, because many women continue to experience gender inequalities at work. An analysis of strategies to counter gender discrimination and promote equality between men and women shows how a combination of good practices in law and in social and economic policy can improve equitable employment opportunities, remuneration,and treatment for women and men at work. This report provides some examples of good global legal practices to reverse unequal labor market outcomes for women and realize their economic potential to the full. It is part of a series consisting of: •Good Global Economic and Social Practices to Promote Gender Equality in the Labor Market •Good Global Legal Practices to Promote Gender Equality in the Labor Market •Gender Equality and the Labor Market: Cambodia, Kazakhstan, and the Philippines •Gender Equality in the Labor Market in Cambodia •Gender Equality in the Labor Market in the Philippines. |
| Keywords: | gender, women, labor market, global practices, legal, gender equality, asian development bank, adb, international labour organization, ilo, gad, gender and development, technical assistance, gender mainstreaming, discrimination, legislation, access to work, working women, recruitment, employment, international standards, minimum wage, equal remuneration, sexual harassment, labor clauses, public contracts, security, formal employment, informal employment, part-time work, short-term contracts, home workers, domestic workers, rural workers, entrepreneurs, cooperatives, social protection, maternity care, family leave, child care, association, collective bargaining, freedom of association, social dialogue |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:asd:wpaper:rpt136183-3&r=sea |
| By: | Guntur Sugiyarto; Erwin Corong; Angelo Taningco |
| Abstract: | The global economy must face crucial challenge on how to cope with soaring oil prices, which have been on a precipitous increase in the last years. The high rise has alarmed countries around the world, especially the net oil importers, since continuing oil price hikes tend to lower economic growth and reduce productivity by increasing production costs and overall domestic prices. It is also likely to increase poverty by reducing income level of the poor and increasing their consumption costs. A computable general equilibrium model calibrated to the Indonesian economy and linked to household survey data was developed in this study to shed light on the issue. The results indicate that higher oil prices generate adverse effects to the economy and poverty, working through their impacts on sectoral outputs, household incomes, and consumer prices. Moreover, the welfare effects across different household groups vary considerably, calling for careful policy responses. The government cash transfer program introduced subsequently to mitigate the adverse effects on the poor shows a sensible but modest result. More comprehensive policies are therefore needed to really help the poor to cope with adverse effects and to improve their conditions. This includes incorporating better and progressive targeting and positive conditionalities to maximize the programs benefits and to make the poor taking actions closer to the social optimum that will benefit the economy in the long term. See above See above |
| Keywords: | See above, Impact and scenario analysis, General equilibrium modeling |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:6995&r=sea |
| By: | Jean Louis Brillet |
| Abstract: | To study the consquences of the Trans Pacific Partnership on the Vietnamese economy Using a five product econometric modelto measure the impact of individual elements, then synthetize the full set of measures. Vietnam, along with 11 other countries having a Pacific coast (including the USA and Canada), is now finalizing negotiations on an agreement, which will change profoundly the conditions of trade in the region. Our goal is to understand the consequences of the agreement, and test if it will have favorable consequences for Vietnam, considering that, as all treaties of this kind, we have to measure the balance of both positive and negative individual decisions. For this we shall use a five product model, developed for the Vietnamese Ministry of Planning and Investment. The products are: Agriculture, Manufacturing, Construction, Non-Financial Services and Financial Services. The model will use annual data for the period 1995-2012, built especially for the project by the General Statistical Office. Its structure can be described as short term Keynesian, with long term classical features. Its uses a Cobb-Douglas production function, and it features a price-wage loop, with a WS-PS wage determination. Its equations follow globally an error correction framework. It identifies Foreign Direct Investment, through its motivations and its impact on structural parameters of the economy. It has been estimated using a system method, and the process mostly met with success, in spite of the volatility of data and the ongoing transition process, which questions the stability of formulations. In our study, we shall start from a reasonable 10 year forecast, and shock in success the elements of the agreement: tariffs rates, quotas, local subsidies. Then we will use the actual decisions, or what we know of them at the time of the study, to summarize the outcome of the actual agreement. |
| Keywords: | Vietnam, Macroeconometric modeling, Trade issues |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:6983&r=sea |
| By: | World Bank |
| Keywords: | Environmental Economics and Policies Finance and Financial Sector Development - Currencies and Exchange Rates Economic Theory and Research Private Sector Development - Emerging Markets Finance and Financial Sector Development - Debt Markets Macroeconomics and Economic Growth Environment |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:19303&r=sea |
| By: | Idham Idham; Rizki E. Wimanda; Tarsidin; Tri Winarno |
| Abstract: | Indonesia’s economy is getting more integrated with the global economy. Potential impact of global economy shocks to domestic economy propagated through trade channel and financial channel are increasingly pronounced. Risk of sudden reversal following large capital inflows poses a serious threat to Indonesia’s economy. Meanwhile, Indonesia’s own domestic concerns regarding high current account deficit as a result of high growth of imports have yet to abate. To cope with these growing concerns on external sector, Bank Indonesia’s FPAS needs to be equipped with macroeconomic model with a more complete features of external sector. This paper explores modelling of the dynamics of current account and capital flows, and its incorporation into existing ARIMBI + Macroprudential model (a Semi Structural New Keynesian Model). Here we add external block to ARIMBI + Macroprudential model. This extension consists of two equations, i.e. current account gap and capital flows gap. In addition, output gap equation is modified to accomodate current account linkage to GDP. Meanwhile credit growth gap equation is modified to account for impact of BOP surplus/deficit to domestic liquidity. Simulation of the model shows that its impulse response function is in line with theoretical background while the behaviour of main variables is maintained to be similar with ARIMBI + Macroprudential. Through financial accelerator mechanism, procyclicality of real and financial sector is revealed. The simulation shows that policy mix can mitigate unintended impact of business cycle and financial cycle, as well as shocks from external sector. Its forecasting performance is also improved. |
| Keywords: | Indonesia, Agent-based modeling, Modeling: new developments |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:6902&r=sea |
| By: | Wojciech Charemza; Svetlana Makarova; Imran Shah |
| Abstract: | The paper analyses inflationary real effects in situation where there are frequent episodes of high inflation. It is conjectured with the increase in high inflation, and when differences between the expected and output-neutral inflation become large, output stimulation through inflationary shocks is more effective than otherwise. It is shown that this conjecture is valid for most countries with high inflation episodes, where inflation is greater than 4.8% for at least 25% of quarterly observations. This leads to a simple policy prescription that anti-inflationary monetary decisions should be undertaken in periods where the expected inflation exceeds output-neutral. Vector autoregressive modelling, asymmetric impulse response analysis, inflationary real effects gauge (IREG) From the set of 45 countries 17 have been selected where there were marked episodes of high inflation. By the episodes of high inflation we mean the cases where 0.75 quantile of annual inflation is equal to at least 7.5%. For these countries IREG’s have been computed and asymmetric impulse responses of output to inflationary shocks evaluated separately for the periods where IREG is positive and negative. For countries selected there is a strong positive correlation between the differences in these cumulative impulse responses and the logarithm of the 0.75th quantile of inflation. In another words, we have shown that, if a country experiences periods of high inflation, it becomes relevant to pay attention to the differences between the expected and output-neutral inflation and make anti-inflationary decision in the periods where this difference is positive. The higher inflation becomes, the stronger is the conclusion above. |
| Keywords: | worldwide, 45 countries, emphasis on Indonesia, Malaysia and Pakistan, Monetary issues, Developing countries |
| Date: | 2013–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:004912:5478&r=sea |
| By: | Iskandar Simorangkir; Harmanta; Nur M. Adhi Purwanto; Fajar Oktiyanto |
| Abstract: | A well-functioning financial system is necessary for an effective monetary policy transmission. Simultaneously, monetary policy can also influence financial system stability through its effect on financial condition and behavior of the financial market. Changes in policy rate will have an effect on how agents in financial markets perceived the future prospect of the economy and will influence their spending/investment decisions. Despite this, Blanchard et al (2010) argues that the policy rate is not an appropriate tool to deal with many financial system imbalances, such as excess leverage, excessive risk taking, or apparent deviations of asset prices from fundamentals. As an example, they stated that increasing policy rate to deal with excessively high asset price will result in undesirably higher output gap. They proposed that macroprudential policy such as cap on loan-to-value ratio to be employed to address these specific financial system imbalances. We develop a small open economy DSGE model with financial frictions and banking sector as in Gerali (2010). We modified the banking sector balance sheet from Gerali’s model to include risk free assets and reserves, in addition to bank’s loan to households and entrepreneur, as part of bank’s asset portfolio choices. This is in accordance to the current condition of Indonesian (aggregate) bank’s balance sheet which includes a significant amount of excess liquidity held in a form of risk free asset such as Bank Indonesia’s Certificates (SBI) and Government’s Bonds (SBN). The main focus of the research is to understand the transmission mechanism of loan to value (LTV) ratio requirement policy and how it will interact with monetary policy. Based on the model simulation, an increase in LTV ratio requirement for households’ lending will lead to an increase in consumption and housing asset accumulation of the constrained households. This will lead to a higher growth of aggregate demand and inflation. In order to increase households’ lending, the bank reduces the amount of risk free asset from its portfolio and will cause an increase in its loan to deposit ratio (LDR). In addition, allocating more assets with higher interest rate will also increase bank’s profit that will lead to an increase in its capital. A higher growth in aggregate demand will increase inflationary pressure and will prompt central bank to increase the policy rate. The same dynamics applied to an increase in entrepreneur’s LTV ratio requirement. Entrepreneurs will increase their consumption and investment because of the increase in funding they acquired from the bank. This will lead to an increase in GDP. Because the increase in GDP is mostly comes from the higher growth of investment, inflationary pressures is not as significant as in the previous case but central bank still need to respond by increasing policy rate. See above See above |
| Keywords: | Indonesia , Macroeconometric modeling, Finance |
| Date: | 2013–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:004912:5678&r=sea |
| By: | Asian Development Bank (ADB); (Regional and Sustainable Development Department, ADB); ; |
| Abstract: | Increasing job opportunities and decent work for women are essential for advancing economic and social development in countries, because many women continue to experience gender inequalities at work. An analysis of strategies to counter gender discrimination and promote equality between men and women shows how a combination of good practices in law and in social and economic policy can improve equitable employment opportunities, remuneration, and treatment for women and men at work. This report provides some examples of good global economic and social practices to reverse unequal labor market outcomes for women and realize their economic potential to the full. It is part of a series consisting of: •Good Global Economic and Social Practices to Promote Gender Equality in the Labor Market •Good Global Legal Practices to Promote Gender Equality in the Labor Market •Gender Equality and the Labor Market: Cambodia, Kazakhstan, and the Philippines •Gender Equality in the Labor Market in Cambodia •Gender Equality in the Labor Market in the Philippines. |
| Keywords: | gender; women; labor market; global practices; economic; social; gender equality; ADB; ILO; decent work; inclusive growth; Gender-Responsive Fiscal Policy; Gender-Responsive Monetary Policy; Gender-Responsive Trade; employment; employment policies; gender mainstreaming; gender-specific policies; micro enterprises; small enterprises; mircocredit; microfinance; informal economy; school; training; girls; social protection; conditional cash transfer; public employment; social funds; gender analysis; GAD; gender and development; women's association; technical assistance |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:asd:wpaper:rpt136184-3&r=sea |
| By: | Asian Development Bank (ADB); (Office of Cofinancing Operations, ADB); ; |
| Abstract: | The Japan Fund for Public Policy Training was established in March 2004 as a trust fund to enhance developing member countries’ capacity building for public policy management, focusing on regional economies in transition. Since its inception, the Government of Japan has contributed more than $22 million. The country director of the Asian Development Bank’s Viet Nam Resident Mission acted as the program manager of the fund through 2011. The Public Policy Training Program’s training facility in Ha Noi was closed in August 2011 upon completion of planned training programs. |
| Keywords: | Japan Fund for Public Policy Training, trust funds, public policy, governance, jfppt, adb trust funds, jfppt final report, jfppt report |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:asd:wpaper:rps135723&r=sea |
| By: | Fajar Oktiyanto; Harmanta; Nur M. Adhi Purwanto; Aditya Rachmanto |
| Abstract: | The experience from the recent global financial crisis on 2008/2009 showed that most macroeconomic instabilities came from the financial/banking sector. The condition of the financial system may affect monetary stability, through excessive pro-cyclicality in the financial system. Agung et al (2010) stated that pro-cyclicality level of financial sector in Indonesia is quite high. The evidence can be seen from the real credit which grew faster than GDP in the period of expansion, and vice versa. On the other hand, monetary policy may also affect the company's risk-taking behavior in financial markets, by affecting the company’s balance sheet as well as bank (credit portfolio, asset, etc.), which in turn will affect the stability of the financial system. Bernanke and Gertler (2001) stated that an aggressive monetary policy will not provide a significant advantage to regulate the movement of asset prices, due to the large volatility of financial variables. Hence, it is necessary to establish a combination of policy instruments to achieve price stability and financial stability. To formulate policies for price stability and financial market, we built a DSGE model that has the ability to simulate the effects of monetary and macroprudential policies in Indonesia. We incorporated a credit channel and financial intermediation mechanism in the model to capture pro-cyclicality in the financial sector, which will influence the dynamics of the business cycle, as suggested by Roger and Vleck (2011). The model is built on the basis of Gerali et al (2010) who have entered the banking sector with collateral constraint in the New Keynesian DSGE models a la Christiano et al (2005), and also adding a model of the financial accelerator approach a la Bernanke et al (1999) which has been modified by Zhang (2009). We used two approaches to model financial frictions in the financial sector: (i) collateral constraint, imposed on bank lending to households; and (ii) financial accelerator, imposed on lending to entrepreneurs. Collateral constraints mechanism in the household borrowing allows simulation of macroprudential policies such as the LTV ratio, which has been implemented in Indonesia for the last few years. On the other hand, the financial accelerator mechanism imposed on the entrepreneurs affected their decision to borrow from the bank to purchase their capital needs. The model that we developed is a small open economy DSGE model that has economic agents such as households (patient and impatient) conducting consumption, labor supply, savings to and borrowings from banks and paying taxes to the government. In addition there are entrepreneurs, intermediate good producers, capital good producers, housing producers and final good producers associated with the production of goods, the production of capital, as well as the final goods aggregator. This model also has a wide range of retailers, namely domestic retailers, importer retailers and exporter retailers that served to differentiate homogenous goods at no cost and sell them at a certain profit, with the opportunity to change the selling price following the usual mechanism from Calvo (1983). The condition of the financial system may affect monetary stability, through excessive pro-cyclicality in the financial system. The evidence can be seen from the real credit which grew faster than GDP in the period of expansion, and vice versa. On the other hand, monetary policy may also affect the company's risk-taking behavior in financial markets, by affecting the company’s balance sheet as well as bank (credit portfolio, asset, etc.), which in turn will affect the stability of the financial system. Hence, it is necessary to establish a combination of policy instruments to achieve price stability and financial stability. This model should describe the economic condition under monetary and macro prudential policy mix response if there are any shock happened. As the result, the model has detail treatment of banking sector according to Indonesia context. The transmission of macro-prudential policy shock is studied by analyzing the impulse responses to shock some variable, especially LTV. We find that macro-prudential policy plays an important role to dampen excessive economic and financial cycles in Indonesia. We also find that the results are better when macro-prudential instruments are exercised together with appropriate monetary policy responses. Therefore coordination between monetary policy and macro-prudential policy is critical In order to obtain optimum results in achieving macroeconomic stability and financial system stability. |
| Keywords: | Indonesia, General equilibrium modeling, Agent-based modeling |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:6840&r=sea |
| By: | Julien Hanoteau; Virginie Vial |
| Abstract: | While the Asian Paradox literature evidences a grease-the-wheel effect of corruption on individual firm productivity growth, the results call into question the aggregate effect of individual bribery. A large literature analyzes the drivers of productivity growth at the firm and sector levels, and suggests that corruption may affect these drivers through the resulting less favorable conditions for investment and technological progress, as well as distortions and misallocation in output and inputs markets. We are not aware of any literature that investigate the effects of micro-level corruption on aggregate productivity growth (APG) and its different components (intra-plant productivity growth; market shares reallocation between incumbents; and the effect of firm entry and exit in the industry). Filling this gap is important for understanding the dynamics by which corruption damages countries’ economic performance (Dal Bo and Rossi 2007) as measured by its main driver: productivity growth (Barro and Sala-i-Martin 2003). Using a unique panel dataset covering the population of Indonesian manufacturing establishments over the long period 1975-1995, we assess the cumulated effect of micro-bribe payments to aggregate productivity growth. Following Foster et al. (2001) methodology so as to model and decompose Aggregate Labour Productivity Growth (ALPG), and using establishment-level measures of productivity and bribe payments, we assess the contribution of three different corruption-classes of plants: plants paying zero, low, or high bribes. As a robustness check, and to account for the overestimation of the net entry effect, we use the Melitz and Polanec (2012) modeling approach that is a dynamic version of Olley and Pakes (1996).We demonstrate that the aggregate class of high-corruption plants contributes negatively to aggregate labour productivity growth, while the aggregate class of plants paying zero or low bribes contributes positively. Our results are robust to the use of two different measures of corruption. Thus, this paper shows that the two diverging effects of corruption, that is the grease- and the sand-the-wheel effects, coexist at different aggregation levels and for different classes of plants. While corruption has beneficial effects if kept low, the cost of high corruption in terms of aggregate productivity growth becomes evident. |
| Keywords: | Indonesia, Growth, Developing countries |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:6685&r=sea |
| By: | Thanet Wattanakul |
| Abstract: | Thailand and the Laos PDR have a very long border of 1,810 kilometers which has been involved with international economic transactions in terms of trade, investment, tourism and passenger transportation over a long period. There are 36 custom check points allowing passenger transportation between the two countries by international bus, train, car, or private hire van. The trend of passenger transportation has recently increased because of the rise of tourists and investors as well as the supporting promotion policy of both countries particularly for the passenger transportation business. The growth of this business can be attributed to the capacity of Nong Khai province with respect to tourist attractions and destinations, food, culture and the natural environment. Therefore, it is very interesting to examine and estimate the passenger transportation demand model in order to investigate the impact of the variables that determine the model. This study also proposes policies that could enhance the effectiveness of entrepreneurs’ strategies. Moreover, the results of this study can be used as guidelines for both entrepreneurs and related government organisations. This study aims to explore the impact of factors influencing passenger transportation demand via estimating the passenger transportation demand model. The appropriate combination estimation techniques are used. The study period was between July 2007and June 2010 and monthly data was used to estimate the model. The data used to develop in this study has been mainly obtained from the Bank of Thailand data base, the annual report of the entrepreneurs, the interview and International Financial Statistics from the IMF. The sample and data covered only the two countries in the Mekong Sub-region according to the objectives of the study. Moreover, the data is both time series and non-time series data. Therefore, it can be affirmed that the data used to construct and estimate the econometric model is suitable. The following linear model was constructed based on the general passenger transportation demand. The variables were developed to suit the passenger transportation between Thailand and Laos. ..................................(1) Where: Qa is the total number of passengers who use the service provided (people/month) Pa is the fee paid by customers who use international bus service to travel from Nong Khai to Vientiane deflated by public transportation price (2007 base year, baht/person) Pb is the fee paid by customers who use the regular bus service to travel from Nong Khai to Vientiane deflated by public transportation price (2007 base year, baht/person) GDP is the gross domestic product of Thailand (as 1998 constant price, million baht) EX is the exchange rate (Baht/Kip) HO is the number of holidays in each month consisting of weekends and special occasion holidays TR is the frequency of service obtained from the service schedule From equation (1) above, it can be stated that all the independent variables determine and influence the passenger transportation demand that is represented by total number of passenger who use the service provided (Qa). Additionally, the price of substitute goods is combined in the equation (1) that is expressed by Pb that is consistent with general demand theory. According to equation (1), the linear function can be written in the linear econometric modelling form as follows: …………… (2) Where: 0 is the constant term 1 - 6 is the coefficient of each independent variable t is the error term 5.2) Justification of the Model Estimation Methods The model estimation methods undertaken have to be appropriate in order to propose the results as well as policy implications and recommendations are plausible. As a consequence, it is needed to conduct multi steps and estimation techniques by following. 5.2.1) The Unit Root Test 5.2.2) The Co-integration Test 5.2.3) The Coefficient Test 5.2.4) The Error Correction Mechanism (ECM) Test 6.1) Unit Root Test It can be explained that for all independent variables, the stationary level of time series data used in the estimated model needed to be tested first via the Augmented Dickey Fuller (ADF) test. This technique is an appropriate method of checking the mean and variance of data. The first order stationary level or I(0) has three different model testing formats: 1) No intercept and no trend equation 2) Only intercept equation 3) Both intercept and trend equation The comparison result between ADF t-Statistic and McKinnon critical value has to be considered to accept or reject the null hypothesis that each independent variable has no unit root or stationary. The empirical comparison result above found that the null hypothesis can be accepted and that the stationary of almost independent time series variable is the same level because of the ADF t-Statistic is lower than the McKinnon critical value at different level of significance of 0.01, 0.05 and 0.10 respectively. Nevertheless, there are some independent variables which rejected the null hypothesis but accepted the alternative hypothesis consisting of HO and TR. The alternative hypothesis showed that there are both intercept and trend variables in the estimated model at 99% of the significance level. The above mentioned independent variables had to be tested to make all independent variables at the same stationary level. The higher stationary level was tested by using the first different order estimation technique to obtain the most accurate and reliable empirical results possible. This procedure revealed that all independent variables are stationary at the same level of the first different order or I(1). The different levels of significance of 0.01, 0.05 and 0.10 are used to support this claim. 6.2) Co-integration Test For the next step, the long-term relationship of the time series data was tested by using a co-integration process of the Engle and Granger test consisting of the following procedures: Firstly, the residuals of error term (t ) obtained from an estimated equation using OLS had to be taken to test the stationary level of the total number of customers who used the service (Qa) as well as other independent variables. The integration of zero order or unit root test by using ADF test was then calculated. The final step was to take the residual from the estimated equation by OLS to test the stationary level via the same process. Regarding the empirical results, it can be stated that the ADF test is less than the McKinnon critical value at a significant level of 0.01. As a consequence, it can be concluded that the error term has the stationary characteristic or integration of order zero or I(0). Therefore, the total number of passengers who used the international transportation service between Thailand and Laos (Qa) has a long-term equilibrium relationship with each independent variable. However, the multicollinearity can be detected by considering the correlation coefficient of two independent variables of Pa and Pb that is equal to 0.9998. Consequently, the independent variable of substitute good (Pb) can be deleted from the estimated equation. Furthermore, the first conclusion that can be drawn is that the independent variables Pa and Pb are nearly perfect substitute goods, which is consistent with demand theory. 6.3) Coefficient Test The next step after the co-integration process was coefficient testing in order to detect any heteroskedasticity and autocorrelation problems. Heteroskedasticity were tested by co-integration estimation results and autocorrelation problems were tested by using the Durbin-Watson (DW) statistic. The outcome was that no problems were detected. It can be implied that the total number of passengers (Qa) has a long-term equilibrium relationship with all independent variables. This relationship can be written as follows: (1.73)* (3.14)*** (-2.66)** (1.10) (2.07)* = 0.53 = 0.40 = 17,551.96 = 2.30 = 0.011** Note: 1. *** is statistic level of significance at 1% (0.01) 2. ** is statistic level of significance at 5% (0.05) 3. The number in blanket is t-statistic From the equation above, it can be explained that the total number of passengers from Thailand to Laos (Qa) has a positive relationship with the fee (Pa), the frequency of service provided (TR) and the GDP. On the other hand, the total number of passengers from Thailand to Laos (Qa) has a negative relationship with the exchange rate (EX). 6.4) Error Correction Mechanism (ECM) Test The ECM is a mechanism that enables an examination of the short-term equilibrium adjustment process. Therefore, the error equilibrium adjustment term is the linkage between short-term and long-term adjustment mechanism. This mechanism and linkage can be expressed as the following equation. A change of the total number of passengers using the transportation service between Thailand and Laos influences the change of fee (Pa), the frequency of service provided (TR) and the GDP in the same positive direction. However, a change in the total number of passengers influences the exchange rate (EX) and the number of holidays (HO) in the opposite direction. The negative coefficient of error correction term is consistent with the equilibrium adjustment theory. According to this theory, the value of error will be much lower leading to an adjustment for long-term equilibrium. It can be stated that the speed of adjustment to the long-term equilibrium is -46.27% if there are situations that influence the total number of passengers that deviate from equilibrium in each period. The Breusch-Godfrey serial correlation LM test is used to test and accept the hypothesis that there no autocorrelation occurred. |
| Keywords: | Thailand and Loas PDR, Trade issues, Regional modeling |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:6480&r=sea |
| By: | Asian Development Bank (ADB); (Southeast Asia Department, ADB); ; |
| Abstract: | The Greater Mekong Subregion Human Resource Development Strategic Framework and Action Plan (2013–2017) reflects changing circumstances, including the development of the Greater Mekong Subregion (GMS) economic corridors as an important GMS priority. The goal of the human resource development (HRD) strategy is to foster sustainable subregional HRD, thereby contributing to increased subregional competitiveness, connectivity, and community. This document outlines the GMS HRD strategy that will be implemented through (i) developing capacity in the economic corridors, (ii) cooperating in technical and vocational education and training, (iii) cooperating in higher education and research, (iv) addressing regional health issues, (v) facilitating safe cross-border labor migration, (vi) mitigating social costs in the economic corridors, and (vii) strengthening institutions and mechanisms for GMS HRD cooperation. |
| Keywords: | greater mekong subregion, GMS, regional cooperation, human resource development, human capital, economic corridors, higher education, technical and vocational education and training, skills development, mutual recognition framework, quality assurance, credit transfer system, health, labor migration, human trafficking, social development, communicable disease control, food and drug safety, HIV/AIDS¸ capacity development, communicable diseases, social development, cross-border issues |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:asd:wpaper:rpt135469&r=sea |
| By: | Guntur Sugiyarto |
| Abstract: | The standard theory on optimal commodity taxation is incomplete in the sense that it ignores the fact that taxation -as a system- is attributed with administrative and other costs. The costs could be very large even for the theoretically optimum one. In addition, its application requires estimations of preference and elasticities that can be unobtainable for developing countries. The common practice of applying a uniform rate across sectors does not always produce better results. Therefore, in the second best situation it might be useful to focus on minimising the taxation costs. A CGE model representative to the Indonesian economy is developed to examine this issue by first assessing the marginal excess burden and welfare costs of the existing commodity taxation. The latter is then used as a basis for designing an optimal allocation of commodity taxation. The results suggest that most sectors have already been over taxed and the existing tax system is not an efficient way for collecting revenue. The proposed commodity tax rates will give much better results for the economy, welfare and even for the government revenue. See above See above |
| Keywords: | Indonesia, Tax and public finance, General equilibrium modeling |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:6990&r=sea |
| By: | Ramón E. Key-Hernández; Claudina Villarroel |
| Abstract: | OPEC claims that the aim of this organization is to coordinate and unify the petroleum policies among its member countries to ensure a secure and stable income provision to its member countries; an efficient, economic and regular supply of petroleum to consuming nations; and a fair return on capital invested in the oil industry (OPEC, 2010, "Long-term Strategy). One way to achieve their goals is through agreement on each country´s production allocation. In this century, the oil market has witnessed the active role of OPEC to stabilize the market when prices show downward trend. From 2011 oil prices have remained relatively stable, around $ 95/ barrel for WTI and $ 105 / barrel for the OPEC basket. However, no situations are discarded in the near future that require actions by OPEC as have been seen in the recent past. In this sense there is evidence that the production of non-OPEC countries has been increasing, while risk situations remain to global financial stability that threaten the future growth of the residual demand for OPEC crude. This paper analyzes the effects of production cuts on Nigeria and Venezuela, founding members of OPEC countries. These two countries together account for 15% of current OPEC production (6% Nigeria, Venezuela 9%) and 28% of proven oil reserves (3% and 25% respectively). The cases of Nigeria and Venezuela are of particular interest because their economies show greater diversification from the rest of OPEC. According to World Bank statistics for 2006, the combined weight of the agricultural and manufacturing sectors in these countries reached proportions that are superior to most other OPEC countries (Nigeria 35% and Venezuela 19%), with the notable exceptions of Iran (21%) and Indonesia (41%). However, Indonesia the largest diversified country in OPEC ceased to belong to this organization in September 2008. A computable general equilibrium is developed to measure the impact of production cuts in Nigeria and Venezuela. The model considers 14 production activities for each country (comparable to each other). Production cuts are simulated as export restrictions by introducing quota exports in the model as a complementary condition). Additionally alternative scenarios are considered regarding capital mobility between sectors and closures alternatives.Preliminary results from a version of the proposed model for Venezuela with 4 sectors (petroleum, manufacturing, services, and other sectors.) reveal that a 10% reduction in oil exports could generate an overall decline in economic activity (GDP) of 0.1 % , mainly affecting the oil producer sector and the "all others sectors" which mainly includes the construction sector. It is noteworthy that the production of the manufacturing sector expands slightly to 0.3%. In this case suggesting that weight status of manufacturing sector in the structure of a country like Venezuela is not a decisive factor in the recessive character may have, in the short term, the production cuts. |
| Keywords: | Nigeria, Venezuela, General equilibrium modeling, Developing countries |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:7007&r=sea |
| By: | Komsan Suriya; Orakanya Kanjanatarakul |
| Abstract: | This research forecasts the sales of an innovative agro-industrial product, the feta cheese from buffalo milk, in Thailand using limited information from January 2000 to August 2012. It aims to find how much data sufficiently needed for the prediction of accurate sales concerning that newly launched products are likely to provide insufficient information for traditional statistical methods. Furthermore, it compares two forecasting models; the Bass model (Bass, 1969) and the Logistic function (Stoneman, 2010) in terms of Mean Absolute Percentage Error (MAPE). It estimates the models by maximum likelihood and least squares methods with quadratic interpolation and quasi-Newton in Matlab. The findings show that the sales can be accurately forecasted by using monthly information just only 7 months to 24 months after the launching of the product. A comparison of the Bass model and the Logistic function using the same estimation methods shows that the Logistic function is superior to Bass model when using the data in the range of 7 to 24 months. In addition, the study indicates that the predictive sales values of the Bass model are always lower than those of the Logistic function. When combining them together, the Bass model always predicts the Lower-bound of the sales whereas those of Logistic function predicts the upper-bound. The area between the upper and lower bounds constructs the possibility of the sales. Last, the study calculates how long the product will last in the market and predicts the maximum sales by intercepting the lines of both models with the OLS linear time trend. |
| Keywords: | Thailand, Forecasting and projection methods, Modeling: new developments |
| Date: | 2013–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:004912:5422&r=sea |
| By: | Julien Hanoteau; Virginie Vial |
| Abstract: | Baumol (1990) famously argues that entrepreneurs are individuals who exploit opportunities, be they in the productive (enterprises) or the unproductive sector (lobbying, rent-seeking, corruption…), and that the prevalence of one or the other type of entrepreneurship depends on the quality of surrounding institutions: high quality institutions foster productive entrepreneurship, whereas failing institutions trigger unproductive entrepreneurship. However, recent empirical studies evidence that the effect of institutions quality on productive entrepreneurship might be more ambiguous. Dreher and Gassebner (2013) observe that if poor quality of institutions is detrimental to firms’ entry, this effect is nonetheless moderated in presence of corruption. Our central argument in this paper, is that productive entrepreneurs may be forced by their institutional environment to bribe so as to be able to start and develop their venture. As a result, a same quality of institutions has different effects on bribing and non-bribing productive entrepreneurships. This has strong implications for the literature addressing the effect of institutions on entrepreneurship. We complement Baumol’s (1990) theory, by acknowledging that productive entrepreneurs do not form a homogenous population, but have characteristics that are shaped by the institutional context in which their venture is embedded. This recognition is likely to unveil the true effects of institutions on productive entrepreneurship, whereas analyses that make a clear distinction between productive and unproductive entrepreneurship and treat the former as a homogenous population, are likely to result in misleading observations. This contribute to the embryonic literature regarding the role of entrepreneurship in the development of emerging countries (Bruton et al., 2008; Naudé, 2010; Peng and Zhou, 2005; Stenholm et al. 2013). We use panel data econometrics, with a unique dataset that merges two databases, the Statistik Industri from the Indonesian Bureau of public statistics (BPS) and the Indonesian Family Life Survey (IFLS) from the Rand Corporation. It enables us to analyze the effect of varying formal and informal institutions quality, across regional districts (190), on the 5-digit sector-level (321) entry rates of bribing and non-bribing new ventures, over the period 2001-2007. Although cross-country studies are more robust (Bruton et al., 2010), Indonesia compensates with its institutional features (administrative inefficiency, pervasive corruption, ethnic diversity…) that are common to many emerging countries (Miguel et al., 2005) while presenting large within institutional quality variations, and will therefore allow an easier generalization of our findings. Analyzing patterns across districts within a single country permits to use homogenous survey instruments of institutions and consistently available data on the bribing component of entrepreneurship, which is rarely the case for cross country regressions and reduces some of their problems of measurement and omitted variables (Miguel et al., 2005; Sobel, 2008).The results show that regulative and resource-allocative institutions are significant factors impacting the rate of entrepreneurship. Moreover, the results confirm our main conjecture that these institutions have differentiated effects on bribing and non-bribing entrepreneurship, taken at the local and 5-digit sector level. On the one hand, deficient regulative (low quality of business permits delivery and excessive indirect taxations) and resource-allocative institutions (poor quality of access to transport infrastructures and services) are detrimental to entrepreneurship. On the other hand, we find that bribing new ventures suffer less than other ventures, from a deteriorated access to high quality business permits delivery and transport infrastructures and services. Our results also show that in districts and 5-digit sectors with a poor supply of banking services, bribing entrepreneurs have a better entry rate than others, suggesting that they have a better access to financings through corruption. |
| Keywords: | Indonesia, Developing countries, Miscellaneous |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:6689&r=sea |
| By: | World Bank |
| Keywords: | Poverty Reduction - Rural Poverty Reduction Macroeconomics and Economic Growth - Regional Economic Development Poverty Reduction - Achieving Shared Growth Health Monitoring and Evaluation Health, Nutrition and Population |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:17546&r=sea |
| By: | Marie-Eve Yergeau; Dorothée Boccanfuso; Jonathan Goyette |
| Abstract: | Reducing extreme poverty and protecting the environment are two of the eight Millennium Development Goals (UN, 2012). Approximately 60% of the ecosystems currently used to produce goods and services are being exploited in an unsustainable manner. The establishment of protected areas is a widespread practice designed to curb environmental degradation. Between 1990 and 2011, the number of protected areas increased of 155% (WDPA, 2012). However, it is often criticized as limiting the expansion of agriculture and natural resource extraction, especially in poor regions (Ferraro et al., 2011). Others maintain that protected areas can increase welfare if the opportunity cost of conservation is less than the benefit generated by alternative uses of the land, such as ecotourism (e.g. Sims, 2010). The World Tourism Organization emphasizes that ecotourism development must, specifically, create income opportunities for local communities, while minimizing negative impacts on the natural environment (WTO, 2012). Ecotourism in protected zones thus appears to be this alternative use of the land, concurrently contributing to the goals of reducing poverty and protecting ecosystems (Andam et al., 2010; Sims, 2010). In the litterature, theoretical and empirical results on the relation between protected areas and welfare diverge. The few theoretical models developed so far generally assume that before being protected, land is used optimally. The establishment of a protected area thus constitute a constraint to this optimal use. Assuming as well that land protection does not generate other benefits at the local level, the main intuition emerging from these models is that protected areas will reduce economic wellbeing (Robalino, 2007; Robinson, Albers and Williams, 2008; Robinsin and Lokina, 2011). However, other authors have empirically tested the relation betweeen protected areas and welfare. For instance, four recent studies have been conducted in Costa Rica, Thailand and Bolivia (Andam et al., 2010; Sims, 2010; Ferraro and Hanauer, 2011; Canavire-Bacarreza and Hanauer, 2013). The authors all found that the establisment of protected areas contributed to economic development and poverty alleviation. They suggested that ecotourism development in the protected areas generated an income that was sufficient to compensate the loss caused by conservation. Moreover, Ferraro and Hanauer (2011) found an evidence that ecotourism contributes to poverty reduction in protected areas. The main objective of this paper is to increase the understanding of the link between conservation and poverty alleviation in order to contribute to the achievement of the Millenium Development Goals. To do so, we develop and test a theory explaining the relation between protected areas, ecotourism and wellbeing. We aim at reconciling the theoretical and empirical results found in the literature. We develop a static theoretical model consisting of one local agent and two sectors : extractive and ecotouristic. The model distinguishes itself because land protection allows to develop an alternative sector which generates a source of income at the local level. On the one hand, production in the extractive sector causes natural resources degradation. On the other hand, the ecotouristic sector produces from environmental quality. Therefore, the extractive sector causes a negative externality on the ecotouristic sector. At the same time, a planner imposes an environmental constraint that restrains the production in the extractive sector, which allows the ecotouristic sector to develop. This way, we relax the assumption generally made that land protection does not generate local benefit. The theoretical results are then tested on Nepalese data. We expect our theoretical model to reconcile the theoretical and the empirical results. The main expected result is that the alternative sector developed from land protection will affect the local welfare. The negative externality caused by the extractive sector, combined with the environmental constraint imposed by the planner, should generate a transfer of the production from the extractive towards the ecotouristic sector provided that the latter becomes more profitable. This way, land protection will be likely to generate an increase in the local welfare, as it is found in the empirical literature. The model will also allow to verify the natural resource extraction rate according to the environmental constraint severity. This result will be relevant for the purpose of environmental policies. |
| Keywords: | Nepal, Developing countries, Energy and environmental policy |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:6716&r=sea |