Asian Economic Policy Review最新文献

{"title":"Comment on “Fiscal Sustainability in Indonesia: Policies and Progress”","authors":"Cassey Lee","doi":"10.1111/aepr.12472","DOIUrl":"10.1111/aepr.12472","url":null,"abstract":"<p>The COVID-19 pandemic imposed extraordinary demands on the use of fiscal policy. Expansionary fiscal policies were required to support households and firms amidst severe economic contractions brought about by mobility restrictions to control the spread of the pandemic. At the height of the pandemic in 2020, Indonesia spent an estimated 115 USD billion or 11.35% of its GDP. Consequently, the country's central government's debt-to-GDP ratio rose from 33.7% in 2019 to 42.9% in 2020 and 44.4% in 2021 (World Bank, <span>2022</span>). The Indonesian economy would have contracted by more than 2.1% in 2020 in the absence of these expansionary fiscal policies. Now that the economy has recovered, the policy focus has shifted to shoring up fiscal space to secure greater fiscal sustainability.</p><p>Fiscal sustainability entails the ability of a government to meet its current and future financial obligations. From an analytical perspective, fiscal sustainability entails the government meeting its flow budget constraint over time.</p><p>The various elements of Indonesia's fiscal sustainability are qualitatively discussed by Adrison (<span>2024</span>). Adrison begins with a comparative analysis of fiscal sustainability across Indonesia, Malaysia, and Thailand covering the period 2010–2019. Fiscal sustainability is measured by a ceiling (maximum) for the ratio of primary fiscal deficit to GDP (Burnside, <span>2005</span>). The results show that fiscally sustainable is achieved in all three countries. The value of the computed average ratio is very low compared to the value of the ceiling ratio—2% of the ceiling for Indonesia, 18% for Malaysia, and 15% for Thailand. These estimates appear too low given the importance attached to fiscal reforms in these countries during the pre-pandemic period. Furthermore, data from the International Monetary Fund also shows that the primary balances (as a percentage of GDP) of both Indonesia and Thailand have been declining since 2005 (IMF, <span>2023</span>).</p><p>In the main body of the paper, Adrison's discussions focus primarily on the two key elements of the primary balance, namely, central government revenues and expenditures. The key challenges to increasing government revenues that are documented by Adrison (<span>2024</span>) are all daunting, sobering, and intractable. A key challenge is the extent of the informal sector in Indonesia. Even though the percentage of self-employed workers in the labor force has declined over time, it has stagnated at around 50%. Theoretically, this problem can be addressed by Adrison's proposal that the national identity card system be synchronized with the tax identification system. There need to be greater political will to implement this and the other reforms recommended by Adrison. The fact that the two-term Jokowi government, which operated on a political base comprising a grand coalition in the parliament, could not undertake effective tax reforms does not bode well for Indone","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"19 2","pages":"248-249"},"PeriodicalIF":4.5,"publicationDate":"2024-03-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/aepr.12472","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140203023","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Design of a CBDC in a Highly Dollarized Emerging Market Economy: The Case of Cambodia","authors":"Kenichi Ueda,&nbsp;Chanthol Hay","doi":"10.1111/aepr.12464","DOIUrl":"10.1111/aepr.12464","url":null,"abstract":"<p>Cambodia is one of the first two countries that adopted a retail central bank digital currency (CBDC) in October 2020. The design of the CBDC, called the Bakong, is a bit unique. We find a few design flaws that could potentially damage the central bank and then the Cambodian economy as a whole. We show some key statistics from our own survey in 2022 to support our arguments. The Bakong is offered in two currencies, the Khmer Riel (KHR) and the US dollar (USD), as Cambodia has been highly dollarized. We discuss theoretical predictions for the CBDC based on three kinds of substitutes: paper money, bank deposits, and foreign currencies. The third one is specific to the Bakong. Unlike a typical local currency CBDC, the USD Bakong may substitute for the KHR more. Moreover, it has been announced that the retail Bakong is legally not a liability of the central bank, but from the viewpoint of the underlying technology and economics, it is a central bank liability.</p>","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"19 2","pages":"272-290"},"PeriodicalIF":4.5,"publicationDate":"2024-03-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/aepr.12464","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140203017","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Macroeconomic Imbalance, External Debt, and the Financial System in Laos","authors":"Fumiharu Mieno,&nbsp;Kazue Demachi","doi":"10.1111/aepr.12469","DOIUrl":"10.1111/aepr.12469","url":null,"abstract":"<p>External public debt exacerbation and macroeconomic destabilization in Laos are attributed to the subsequent complications of excessive foreign capital investments in the mining, power, and transport infrastructure sectors during the economic boom of the 2010s. This study examines the Lao economy from three perspectives: real sector growth, the characteristics of external fundraising, and the domestic financial system. Our findings suggest that the external debt issue still appears to be under control, real sector growth is expected to be strong in the medium term, and the less-developed financial system has not realized its potential for fiscal financing and macroeconomic stability.</p>","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"19 2","pages":"295-318"},"PeriodicalIF":4.5,"publicationDate":"2024-03-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/aepr.12469","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140107528","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Comment on “Challenges in Searching for Vietnam's Growth Drivers Through 2030”","authors":"Mai Fujita","doi":"10.1111/aepr.12467","DOIUrl":"10.1111/aepr.12467","url":null,"abstract":"&lt;p&gt;Starting as one of the poorest countries in the world in the late 1980s, Vietnam has grown remarkably over the past decades. The country now aims to become a developing country with modern industry and be an upper-middle-income country by 2030 and a high-income country by 2045. Against this backdrop, Can and Dang's (&lt;span&gt;2024&lt;/span&gt;) timely and comprehensive account of the economic policy issues faced by Vietnam is highly welcome. Can and Dang's main argument is that Vietnam needs not only to extend the existing growth drivers but also initiate new ones. I have found the proposed list of new drivers as well as the set of recommendations both exhaustive and up to date, reflecting the latest changes such as US–China tensions, the digital transformation, and the green transformation. In the following, I would like to look at the macropicture offered by Can and Dang (&lt;span&gt;2024&lt;/span&gt;) from somewhat different angles, focusing on the ways for moving the policy debate forward.&lt;/p&gt;&lt;p&gt;To start with, Vietnam's effort to revamp its model of economic growth is not new. On the contrary, efforts to build new growth drivers have been going on for more than a decade. A brief discussion of the historical context would be useful. Traditionally, the country's economic growth had been largely dependent on low-cost labor and, in the late 2000s, increasingly on intensive capital investment. This happened in the context of economic reforms and international economic integration which provided Vietnam access to the global market. By around 2010, the sustainability of this traditional growth model had already been called into question, which led to the launching of “renovation of the economic growth model” into one which emphasizes quality, productivity, efficiency, and competitiveness. This was clearly highlighted in the socioeconomic development strategy 2011–2020 and further in the succeeding 10-year strategy for 2021–2030. Policy efforts have been ongoing with respect to most of the new growth drivers pointed out by Can and Dang (&lt;span&gt;2024&lt;/span&gt;).&lt;/p&gt;&lt;p&gt;Indeed, if we look closely into each of these areas, we find that Vietnam has made step-by-step yet considerable strides in policy formulation and implementation. Let us take the case of private sector development. Since 2014, the Vietnamese government started to issue annual “resolutions” aimed at improving the business environment, setting specific targets according to the World Bank's “Doing business” rankings. The steady progress in the reduction and simplification of business conditions and administrative procedures is demonstrated by a recent report based on annual survey of private enterprises, showing that the businesses' burden of regulatory compliance has been on a decreasing trend since 2014, though further improvement is needed with respect to issues such as informal charges (Malesky &lt;i&gt;et al&lt;/i&gt;., &lt;span&gt;2022&lt;/span&gt;). Beyond policy developments, the realities of the private sector also indicate cont","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"19 2","pages":"268-269"},"PeriodicalIF":4.5,"publicationDate":"2024-02-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/aepr.12467","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140424654","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Fiscal Sustainability in Indonesia: Policies and Progress","authors":"Vid Adrison","doi":"10.1111/aepr.12468","DOIUrl":"10.1111/aepr.12468","url":null,"abstract":"<p>This paper investigates fiscal sustainability in Indonesia and draws comparisons with Malaysia and Thailand. The analysis encompasses an evaluation of fiscal rules, fiscal performance, and an assessment of fiscal sustainability across these three countries. Given that the Coronavirus Disease (COVID-19) pandemic affected budget deficits in each country starting in 2020, the empirical assessment utilizes data from 2010 to 2019. Despite persistent fiscal deficits in each country, the results suggest that all three countries maintain fiscal sustainability. A more detailed analysis of the Indonesian case focuses on government revenue and expenditure. The discussion addresses challenges in these areas, aiming to identify feasible policy options for enhancing fiscal sustainability in Indonesia.</p>","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"19 2","pages":"224-247"},"PeriodicalIF":4.5,"publicationDate":"2024-02-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139979210","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Comment on “ASEAN Economic Integration: Addressing Challenges and Embracing Opportunities”","authors":"Marcus Noland","doi":"10.1111/aepr.12465","DOIUrl":"https://doi.org/10.1111/aepr.12465","url":null,"abstract":"&lt;p&gt;Park (&lt;span&gt;2024&lt;/span&gt;) is an accessible overview of the current state of ASEAN, focusing on issues relating to trade integration and the role of regional and global value chains, with particular attention paid to the role of China.&lt;/p&gt;&lt;p&gt;The original ASEAN-5 (Singapore, Malaysia, Thailand, Indonesia, and the Philippines) constituted the second wave of Asian reforming economies, following in the wake of Taiwan and South Korea. Eventually they were joined by oil exporter Brunei, and four lower income economies, Vietnam, Laos, Cambodia, and Myanmar, forming the current ASEAN membership.&lt;/p&gt;&lt;p&gt;The ASEAN economies have generally performed well relative to comparators globally. They have benefitted from technological and policy advances which have supported the rise of cross-border value chains and their proximity to China, which has emerged as a hub. Since 1995, there is clear evidence of convergence in per capita across the membership, though it unclear to what this reflects a simple catch-up process stimulated by domestic policy reforms, and to what extent it can be ascribed to membership in ASEAN per se.&lt;/p&gt;&lt;p&gt;Whatever the impetus, Park documents a clear deepening of regional integration, much of it associated with regional supply chains linked to China. The electronics and automotive sectors have been prominent in this process. ASEAN will presumably remain important in automobiles and parts, through the shift to electric vehicles, which use fewer parts than conventional internal combustion vehicles, will imply a restructuring and possibly a diminution of cross-border exchange. Similarly, increasing industrial policy interventions by the United States, European Union, Japan, and others will affect the structure of the semiconductor industry and electronics more broadly. Moving forward, these regional supply chain networks will be affected by both China's policies and that country's role in the global economy.&lt;/p&gt;&lt;p&gt;Park's (&lt;span&gt;2024&lt;/span&gt;) concluding section describes some of the policy agenda that ASEAN faces, some of its successes, and some successes that have yet to be realized. Implicit is the basic challenge that the group has faced from the start: how far can a diverse organization go in addressing collective action problems with a model based on consensus with little formal structure? Park observes that “enforcing AEC commitments among the member state should be the region's top priority,” but does not address how that might be done.&lt;/p&gt;&lt;p&gt;For example, can ASEAN form a coherent regional response to global warming, arguably the existential issue of our time? ASEAN has deliberately eschewed the legal-bureaucratic model of the European Union, but one wonders if at some point, more binding obligations and enforcement mechanisms are necessary. Is this model adequate for the future? If not, how does ASEAN build adequate institutions? Given the membership's diversity, what role is there for multi-speed commitments (and potentially enforcemen","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"19 2","pages":"196-197"},"PeriodicalIF":4.5,"publicationDate":"2024-02-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/aepr.12465","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141624581","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Comment on “ASEAN Economic Integration: Addressing Challenges and Embracing Opportunities”","authors":"Jong-Wha Lee","doi":"10.1111/aepr.12463","DOIUrl":"https://doi.org/10.1111/aepr.12463","url":null,"abstract":"&lt;p&gt;Over the past several decades, the economies of the Association of Southeast Asian Nations (ASEAN) have made significant progresses in terms of per capita income and living standards. This economic growth in ASEAN has been accompanied by a concurrent increase in cross-border exchanges and a deepening of trade and investment within the region. The interconnectedness was supported by a strong trend of firms building supply chains to cater to both Asian and global markets.&lt;/p&gt;&lt;p&gt;Park (&lt;span&gt;2024&lt;/span&gt;) explores the macroeconomic and developmental policies necessary to stimulate economic integration and growth within ASEAN while also discussing the current outlook and risks facing the region. The paper offers insights into economic transformation and integration through trade and investment in ASEAN, serving as a useful reference for readers seeking to comprehend the status and future challenges of ASEAN economies.&lt;/p&gt;&lt;p&gt;I have a few comments.&lt;/p&gt;&lt;p&gt;Section 3 of Park (&lt;span&gt;2024&lt;/span&gt;) provides valuable data and insights into ASEAN's economic integration via trade and investment, emphasizing the significant role of China in the region's trade. ASEAN's merchandise trade with China accounted for 18.6% of total ASEAN trade, comparable to its trade among ASEAN members at 22.3% in 2022.&lt;/p&gt;&lt;p&gt;This section also analyzes the progress of global value chains (GVC) and regional value chains (RVC) in ASEAN. The GVC participation rate, defined as the share of value-added contents in ASEAN's gross exports exported for further processing overseas, reached 78.2% in 2022. Meanwhile, the ASEAN-to-ASEAN gross RVC participation rate, defined as “the share of ASEAN's merchandise exports that involves production in at least two economies using cross-border production networks to total gross exports with linkages all within the ASEAN region” (ADB, &lt;span&gt;2023&lt;/span&gt;), reached 54.8%. Therefore, ASEAN's RVC intensity is much lower than ASEAN's GVC intensity. This low RVC intensity must be associated with the important role of other Asian economies, notably China, in the global and regional production networks of ASEAN, as well as the industry and trade structure of ASEAN economies. We expect that ASEAN will continue to emerge as one of the most important regional hubs for GVC as the region experiences strong growth and develops more technologically intensive industries. The region may also witness a heightened intensity of RVC with deeper intraregional trade integration and industry upgrading.&lt;/p&gt;&lt;p&gt;Section 3 also emphasizes that foreign direct investment (FDI) has played a pivotal role in driving economic growth and transformation within the ASEAN region. It is important to highlight that the strong economic connections between ASEAN and East Asian economies, particularly with China, played a significant role in attracting FDI to the region. Historically, the USA, European Union (EU), and Japan have been the primary sources of inbound FDI for ASEAN. However, with the e","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"19 2","pages":"194-195"},"PeriodicalIF":4.5,"publicationDate":"2024-02-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/aepr.12463","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141624580","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"ASEAN Economic Integration: Addressing Challenges and Embracing Opportunities","authors":"Cyn-Young Park","doi":"10.1111/aepr.12462","DOIUrl":"https://doi.org/10.1111/aepr.12462","url":null,"abstract":"<p>This paper examines the macroeconomic and development policies to spur economic integration and growth in the Association of Southeast Asian Nations (ASEAN). It reviews how economic transformation and integration have fueled growth and job creation in the region. ASEAN's increased participation in global and regional value chains, with the People's Republic of China (PRC) as a regional hub, laid the solid foundation of regional production networks. However, with the changing role of the PRC in global value chains, the region needs to renew policy initiatives to address the development challenges and seize new growth opportunities with its single market goals. The analysis suggests the region requires strategic plans for infrastructure development, digitalization, and greater integration reinforced by the removal of trade barriers, increased labor mobility, and foreign direct investment mobilization. The region's successful future also depends on cooperative policy efforts around developing e-government and digital value chains, strengthening micro-, small- and medium-sized enterprises and startups, and building smart cities.</p>","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"19 2","pages":"172-193"},"PeriodicalIF":4.5,"publicationDate":"2024-02-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/aepr.12462","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141624569","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Comment on “Flexible Inflation Targeting and Macroeconomic Performance: Evidence from ASEAN”","authors":"Somkiat Tangkitvanich","doi":"10.1111/aepr.12466","DOIUrl":"10.1111/aepr.12466","url":null,"abstract":"&lt;p&gt;Nookhwun and Waiyawatjakorn (&lt;span&gt;2024&lt;/span&gt;) represent the first systematic empirical assessment of Association of Southeast Asian Nations' (ASEAN) inflation targeting frameworks. Specifically, Nookhwun and Waiyawatjakorn examine the role of ASEAN countries' inflation targeting frameworks in reducing inflation levels and volatility, stabilizing economic growth, and maintaining a robust financial system. Nookhwun and Waiyawatjakorn conclude that the frameworks primarily aid in reducing inflation levels. Yet, they also highlight that ASEAN nations, grappling with capital flow volatility and domestic financial imbalances, have evolved their monetary frameworks to integrate diverse policy instruments like foreign exchange interventions, macroprudential policies, and capital flow measures.&lt;/p&gt;&lt;p&gt;Despite its brevity and clarity, Nookhwun and Waiyawatjakorn (&lt;span&gt;2024&lt;/span&gt;) could be enhanced by briefly discussing various complementary policies and public perceptions of inflation.&lt;/p&gt;&lt;p&gt;My first comment relates to complementary policies, in particular, fiscal policy. In addition to the inflation targeting framework, Nookhwun and Waiyawatjakorn note that ASEAN countries also use energy subsidies, price control, and other methods to address short-term global commodity market shocks and inflation. However, they fail to discuss fiscal policy's role in stabilizing economic growth during major crises like the 2008–2009 Global Financial Crisis and the COVID-19 pandemic. The surge in public debt in many ASEAN countries, due to unprecedented government spending, underscores fiscal policy's significance in economic stability during economic shocks. Future research should address the interaction between fiscal and monetary policies.&lt;/p&gt;&lt;p&gt;My second comment relates to inflation expectations and the public's understanding of inflation targeting. The success of inflation targeting is contingent upon the public's expectations being anchored within the bounds set by central banks. Nookhwun and Waiyawatjakorn utilize professional forecasters' short- and medium-term expectations based on Consensus Economics to illustrate that inflation expectations are well-aligned with central banks' targets, implying that the inflation targets announced by central banks have been credible.&lt;/p&gt;&lt;p&gt;However, they overlook the potential limitations in this approach, given the lack of a robust theory on the formation of inflation expectations. In fact, there is a notable gap between the theoretical role of monetary policy in controlling inflation and the corresponding public understanding of this policy. For example, a Bank of Thailand study (Apaitan &amp; Tantasith, &lt;span&gt;2019&lt;/span&gt;) revealed a common misconception among the media that associated inflation control more with price regulation entities (such as the Ministry of Commerce) than with the central bank. This raises questions about the efficacy of inflation targeting in anchoring inflation expectations as the public remains ","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"19 2","pages":"222-223"},"PeriodicalIF":4.5,"publicationDate":"2024-02-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/aepr.12466","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139910512","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Comment on “Challenges in Searching for Vietnam's Growth Drivers Through 2030”","authors":"Kenichi Ohno","doi":"10.1111/aepr.12461","DOIUrl":"10.1111/aepr.12461","url":null,"abstract":"&lt;p&gt;Can and Dang (&lt;span&gt;2024&lt;/span&gt;) argue that Vietnam's traditional growth drivers no longer work or face diminishing returns, and the country requires a new set of growth drivers to avoid a middle-income trap. The need for a policy phase shift has been recognized widely in Vietnam, and Can and Dang reinforce this shared vision. Concerns are covered broadly while no new evidence is offered. Facts and data are cited from the existing literature. Therefore, to assess this study, we must ask if Can and Dang state Vietnam's challenges and solutions in a balanced, concrete, and convincing way to inform and guide policymakers.&lt;/p&gt;&lt;p&gt;Can and Dang list four drivers of past growth: (i) economic liberalization; (ii) knowledge diffusion from trade and foreign direct investment (FDI); (iii) the robust performance of manufacturing; and (iv) young and low-cost labor. This selection is mostly acceptable though quibbles may be raised regarding details.&lt;/p&gt;&lt;p&gt;In particular, Vietnam's knowledge absorption from the foreign sector was not very fast. It took Korea only several years to learn steelmaking, shipbuilding, automobile, and electronics from Japan and attain global competitiveness. Vietnam, like most other economies in the Association of Southeast Asian Nations (ASEAN), has learned more slowly and produced fewer global giants. It surely learned how to sew T-shirts and operate machines at the bottom of the Smile Curve but learning on the value-creating segments of the Smile Curve such as product design, the supply of reliable components, and global marketing was limited. We must see if Vinfast will succeed in conquering the global electric vehicle (EV) market. Technology spillovers do not occur spontaneously but require proper conditions on the recipient side.&lt;/p&gt;&lt;p&gt;Global digital transformation is presented as an advantage but it is also regarded as a risk for Vietnam as discussed in later sections of Can and Dang. For every developing country, digital technology poses both an opportunity and a challenge. Digital leapfrogging is possible for some but digital delays and divides are realities for countries without the necessary conditions. These conditions include the fostering of digital engineers, incentives and opportunities to retain and mobilize these engineers in the home country, excellent Internet infrastructure, and effective policy support for startups and innovators. As Can and Dang admit, Vietnam's track record so far is not very encouraging.&lt;/p&gt;&lt;p&gt;Can and Dang point to five disadvantages for Vietnam. They are: (i) trade risks; (ii) unskilled and aging labor; (iii) infrastructure shortage; (iv) low-quality institutions; and (v) premature deindustrialization. Regarding (i), it must be noted that Vietnam is in a relatively good position to gain from the China-US trade war as well as a thick network of free trade agreements (FTAs) and regional agreements it has concluded with its major trading partners. [Correction added on 27 May 2024, after first o","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"19 2","pages":"270-271"},"PeriodicalIF":4.5,"publicationDate":"2024-02-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/aepr.12461","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139805535","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}