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1. Improving Digital Connectivity For E-commerce: A Policy Framework and Empirical Note for ASEAN

Author:
Lurong Chen
Publication Date:
03-2020
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Global cross-border e-commerce has become increasingly important in the international economy. The next Asian miracle of growth could be born out of the region's digital transformation. Digital connectivity is the cornerstone that will make change feasible and smoothen the transformation. Digital connectivity consists of not only physical connectivity that facilitates the movement of raw materials, intermediate goods, and goods, but also cyber connectivity to support free flows of data, information, and services. This paper proposes a policy framework of promoting digital connectivity to support the development of e-commerce. Policy efforts to improve data connectivity, logistics, and online payment can help the Association of Southeast Asian Nations narrow the development gaps in information and communications technology infrastructure, both cross-border and within countries. Improving institutional connectivity and service development play a significant role. Digital connectivity is essential for the digital-friendly ecosystem that will facilitate digital transformation, which will affect not only e-commerce but also countries’ overall economic performance.
Topic:
International Trade and Finance, Science and Technology, Digital Economy, and Connectivity
Political Geography:
ASEAN

2. Energy Reality and Emissions in ASEAN: Energy Modelling Scenarios and Policy Implications

Author:
Han Phoumin, Fukunari Kimura, and Jun Arima
Publication Date:
11-2020
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
The Association of Southeast Asian Nations (ASEAN) faces tremendous challenges regarding the future energy landscape and how the energy transition will embrace a new architecture – including sound policies and technologies to ensure energy access together with affordability, energy security, and energy sustainability. Given the high share of fossil fuels in ASEAN’s current energy mix (oil, coal, and natural gas comprise almost 80%), the clean use of fossil fuels through the deployment of clean technologies is indispensable for decarbonising ASEAN’s emissions. The future energy landscape of ASEAN will rely on today’s actions, policies, and investments to change the fossil fuel-based energy system towards a cleaner energy system, but any decisions and energy policy measures to be rolled out during the energy transition need to be weighed against potentially higher energy costs, affordability issues, and energy security risks. This paper employs energy modelling scenarios to seek plausible policy options for ASEAN to achieve more emissions reductions as well as energy savings, and to assess the extent to which the composition of the energy mix will be changed under various energy policy scenarios. The results imply policy recommendations for accelerating the share of renewables, adopting clean technologies and the clean use of fossil fuels, and investing in climate-resilient energy quality infrastructure.
Topic:
Energy Policy, Science and Technology, Green Technology, Renewable Energy, and Fossil Fuels
Political Geography:
ASEAN

3. Potential Renewable Hydrogen from Curtailed Electricity for ASEAN’s Clean Energy: Policy Implications

Author:
Han Phoumin, Jun Arima, and Fukunari Kimura
Publication Date:
11-2020
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
The power generation mix of the Association of Southeast Asian Nations (ASEAN) is dominated by fossil fuels, which accounted for almost 80% in 2017 and are expected to account for 82% in 2050 if the region does not transition to cleaner energy systems. Solar and wind power is the most abundant energy resource but contributes negligibly to the power mix. Scalable electricity production from wind and solar energy faces tremendous challenges due to system integration practices in ASEAN. Investors in solar or wind farms face high risks from electricity curtailment if surplus electricity is not used. Technologies for battery storage (lithium-ion batteries) have been developed to handle surplus electricity production from wind and solar energy but they remain costly. Hydrogen produced from electrolysis using surplus electricity, however, has numerous advantages that complement battery storage, as hydrogen can be stored as liquid gas, which is suitable for many uses and easy to transport. Employing the policy scenario analysis of the energy outlook modelling results, this paper examines the potential scalability of renewable hydrogen production from curtailed electricity in scenarios of high share of variable renewable energy in the power generation mix. The study intensively reviewed potential cost reduction of hydrogen production around the world and its implications for changing the energy landscape. The study found many social and environmental benefits as hydrogen can help increase the share of renewables in decarbonising emissions in ASEAN.
Topic:
Energy Policy, Science and Technology, Renewable Energy, and Fossil Fuels
Political Geography:
ASEAN

4. Effects of Business Continuity Planning on Reducing Economic Loss due to Natural Disasters

Author:
Takahiro Ono and Venkatachalam Anbumozhi
Publication Date:
11-2020
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
The Association of Southeast Asian Nations (ASEAN) economy has developed rapidly since the 1980s, centred on the automobile industry, and has been connected to economic regions around the world, including Japan, through supply chains. However, the ASEAN region is one where natural disasters frequently occur, and a region damaged by a disaster will have an impact on the region's economy, and the region’s supply chain will have a major impact on the world.　Protecting the fast-growing and supply chain-connected ASEAN region from frequent natural disasters and reducing economic damage are important to Japan and the rest of the world. In 2015, the 3rd United Nations World Conference on Disaster Risk Reduction adopted the Sendai Framework, which focused on economic loss. To reduce economic loss caused by natural disasters, companies’ capability to continue doing business must be strengthened. Japan’s government has promoted business continuity planning to minimise economic loss. This paper examines the policy, reviews several devastating disaster case studies, and recommends policies for utilising the policy to reduce economic loss in the ASEAN region.
Topic:
Science and Technology, Natural Disasters, Business, and Supply Chains
Political Geography:
ASEAN

5. Determinants of School Enrolment: Relationship between Minimum Wage and Human Capital Investment

Author:
Dyah Pritadrajati
Publication Date:
12-2020
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Most economic research on minimum wage has focused on employment effects. Research analysing the effects of minimum wage on skill acquisition and educational investment is limited, especially in developing countries. To fill the gap in the literature, this paper investigates the relationship of minimum wage and human capital investment using the National Socioeconomic Survey (Susenas). This study is an effort to further analyse whether the minimum wage policy supports or even hinders recent government efforts to keep students in school. The government may be unaware of the possible interaction of different policies, especially in a developing country where inter-sectoral policy coordination is limited. This paper finds that minimum wage legislation has significant negative substitution effect on educational investment, i.e. individuals are more likely to drop out of senior secondary school due to an increase in minimum wage. There is no evidence of gender bias in human capital investment, at least as a response to increasing minimum wage. Even though the response to an increase in minimum wage amongst low-income households is positive, the results of a regression incorporating an interaction term suggest that the substitution effect is the dominant factor. Therefore, the positive result amongst low-income households might be generated by a fall in the probability of obtaining low-skilled employment that offsets the substitution effect.
Topic:
Education, Children, Human Capital, and Minimum Wage
Political Geography:
ASEAN

6. Troubled Waters? Seeking a New Maritime Order in East Asia

Author:
Min Gyo Koo
Publication Date:
08-2011
Content Type:
Working Paper
Institution:
East Asia Institute (EAI)
Abstract:
Without a doubt, the most heated and persistent maritime disputes in the world are in the East Asia region. The vast bodies of water included in this region are the Northwest Pacific, the East Sea, the West Sea, the East China Sea, and the South China Sea. The diplomatic spat in the fall of 2010 between China and Japan over the Senkaku/Diaoyu Islands in the East China Sea was a strong indication that any mishandling of maritime issues can disrupt the subtle balance of power and interests in the region. Equally problematic are the disputes in the South China Sea, where China’s growing assertiveness has provoked concern among not only its Southeast Asian neighbors but also with the United States. Since the end of the Cold War, the United States has been the main provider of maritime security in the East Asia region but now faces the challenge of a rising China. In May 2011, a Chinese patrol boat cut the cable of a Vietnamese petroleum and gas probe vessel in the South China Sea. From this incident, tensions escalated to the brink of armed conflict. As countries in the region participate in tit-for-tat military exercises, the atmosphere has become worse. Under such conditions, many considered that the South China Sea issue, tangled with conflicts between China and ASEAN and the United States could flare up significantly. However at the 18th ASEAN Regional Forum (ARF) held from July 22-23 2011 a new perspective developed as China stated that “the importance of the freedom of navigation in the South China Sea is clear and all countries should be beneficiaries of such freedom.” Furthermore, during the China-ASEAN ministerial of the 2011 ARF Beijing stepped back by adopting the guidelines for the implementation of the Declaration on the Conduct of Parties in the South China Sea, which was agreed upon in 2002. Washington welcomed this move as it suggested an effort to decrease tensions with respect to the South China Sea. This is in stark contrast to the 2010 ARF meeting where confrontations arose between the United States and China with U.S. Secretary of State Hillary Clinton stating “a peaceful resolution of the South China Sea conflict directly relates to U.S. national interest.” From such developments, one can assess that the ARF has made important progress with respect to the South China Sea issue. However, the 2002 Declaration of Conduct that establishes the principle for peaceful resolution of maritime disputes in line with the United Nations Convention on the Law of the Sea (UNCLOS) lacks binding capacities and the newly adopted guidelines are mostly declaratory and lack specific details. Thus it would be too soon to consider the 2011 ARF meeting as a success with respect to the South China Sea dispute. Considering that China tends to use such multilateral channels as a ground for making peace but then is more forceful in its bilateral relations, the outcome of the recent ARF meeting could come to have less significance than expected.
Topic:
Security, International Law, Maritime Commerce, and Maritime
Political Geography:
China, Asia, South China Sea, and ASEAN