T17bP17 - Understanding Growth Slowdown in Asia and the Way Forward

Topic : Sectorial Policy - Economics

Panel Chair : Sasidaran Gopalan - sppsdg@nus.edu.sg

Panel Second Chair : Mulya Amri - mulya.amri@u.nus.edu

Objectives and Scientific Relevance of the panel

Call for papers

Session 1

Thursday, June 29th 13:30 to 15:30 (Block B 3 - 7 (35))

A Cross-Country Analysis of the Impact of Predictability and Accountability Transparency practices and FTA on trade Growth in selected countries of Asia-Pacific Region:Trade Policy

Rosalyn Perkins - rosalyn.perkins@runbox.com - University of Santo Tomas, Manila - Philippines

Mary Caroline Castaño - marycaroline.castano@gmail.com - University of Santo Tomas - Philippines

Conrad Montemayor - ctmontemayor@yahoo.com - University of Santo Tomas Graduate School - Philippines

ABSTRACT


The expanding clique of research exhibits that predictability and accountability were indispensable dimensions of transparency in International Trade (Lejarraga & Shepherd, 2013; Turnes & Ernst, 2014), and at most important in a current setup of boosting trade policy on trade agreement. The current study indicated that predictability measured to selected Asia-Pacific Region data had a significant impact on trade growth. This impact maintained in same sense in the existence of both predictability and accountability transparency practices and the free trade agreement (FTA). Quantitative evidence was presented for these effects by centering on predictability and accountability transparency practices and FTA in trade policy. Panel data derived from World Trade Organization (WTO), World Bank Organization, and Asian Development Bank (ADB) databases of 15 selected countries of the Asia-Pacific region (ASEAN + 5) covering the period of 2009-2013 were used in the study. The parameters were estimated using Ordinary Least Square Regression (OLS) mechanism through three panel models namely a) Common Pooled Data b) Fixed Effect Model (FEM) c) Random Effect Model (REM) to examine the impacts of predictability and accountability transparency policy practices and FTA on trade growth. The study concluded that predictability and accountability dimensions of transparency practices were significant parameters to boost trade growth. The exchange rate predictability reduced volatility on various factors affecting trading activity. Also, transparency practices of regime’s accountability to its WTO commitments and obligations wards off efforts of protectionism at public policy measure actions and decreased number of disputes among trade partners. Moreover, study found that increased in numbers of FTAs had a significant impact on trade growth. Results showed that statistically predictability measured by exchange rate and free trade agreement measured by number of FTAs signed and in effect are significantly related to trade growth at 5% level. The accountability measured by the number of disputes had no significant relationship to trade growth. The study recommends that transparency practices incorporating predictability and accountability should be employed in Trade Policy and should form more numbers of Free trade agreement among other countries. The Trade growth model served as basis for trade policy formulation and innovation.


Keywords: Predictability; Accountability; Transparency; FTA

Prioritising Foreign Investment in APEC

Anthony Makin - t.makin@griffith.edu.au - Griffith Asia Institute - Australia

Economists since Adam Smith (1776) and David Ricardo (1817) have argued consistently that international trade in goods and services improves nations’ overall economic welfare, a view reflected in APEC’s motto: “Advancing Free Trade for Asia-Pacific Prosperity.”  A corollary is that trade restrictions are welfare reducing since they impose additional direct costs on consumers and indirect costs on exporters.  Restricted trade also implies that domestic producers operate in smaller markets than otherwise, while less import competition fails to check firms’ domestic market power.

 

The 1994 APEC Bogor declaration which advocated “free and open trade and investment in the region” provided a foundation for APEC’s subsequent program of regional economic integration.  However, in practice advocacy of greater cross-border investment has paled in comparison to APEC’s advocacy of greater international trade in goods and services.  Likely reasons for this bias include the greater political sensitivity of foreign investment and that, historically, the international economics literature has focussed more heavily on the theoretical benefits and evidence of liberalising international trade in goods and services than on liberalising foreign investment flows.  

 

Yet greater cross border investment within the APEC and between APEC and the rest of the world could play a greater role in Asia-Pacific economic development since significant further expansion of regional trade in goods and services has stalled in light of the already significant lowering of trade barriers to date, the abandonment of the Trans Pacific Partnership (TPP) and slow progress with the Regional Comprehensive Economic Partnership (RCEP) and overarching Free Trade Area of Asia and the Pacific (FTAAP).  As an alternative pathway to higher growth and living standards, facilitating greater foreign investment flows within APEC and with the rest of the world would allow capital to move to where it can most productively be employed, in the process delivering benefits akin to those bestowed by expanding international trade.

 

This paper proposes that liberalising foreign investment should be afforded a high priority in APEC in view of the mutually beneficial effects that accrue to both recipient and source economies.  Section 2 highlights the small scale of international investment flows in APEC economies relative to their international trade flows and examines APEC foreign investment trends in global context.  Section 3 advances the key micro- and macroeconomic economic arguments for accelerating international investment, before Section 4 examines the relationship between foreign investment and national income levels.  Section 5 concludes that liberalisation of foreign investment in APEC should be prioritised to bolster regional and world economic growth.

 

 

 

Retirement, work and aging in Korea: understanding the labor pool in an aging economy

Jimin Ha - j.ha@u.nus.edu - National University of Singapore - Singapore

Unprecedented pace, now and projected, of population aging in Asia has direct implications to the shrinking size of labor force, as older workers retire. It is vital for countries facing such challenge to improve their retirement systems that can help enhance the life quality and productivity of their senior people. As an abundant labor force was a driver for growth in the past in Asia as argued in demographic divided literature, aging phenomenon could be disruptive for growth if not prepared for. Policy recommendation in response is often suggested to be extending working lives of older workers. On that note, understanding retirement behavior is important in terms of when, how and why.

 

In Korea, the late average effective retirement age, rigid nature of labor market, and yet an existence of contractual mandatory retirement age in practice points to the following question: is the current arrangement and work practices ideal in enhancing the quality and productivity of their senior people at workplaces? It is important to understand the labor mobility of older workers near retirement age. On that note, effects of the contractual mandatory retirement age on workers and their policy implications will be explored as well.

 

Korean Longitudinal Study of Ageing (KLoSA) data will be used for analyzing labor mobility of older workers as the data inform how individuals change work at the time of survey reference point. How mandatory retirement age in employment contract condition affect older worker’s retirement behavior will be analyzed through panel regressions.

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