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101. Understanding Quality Energy-Related Infrastructure Development in the Mekong Subregion: Key Drivers and Policy Implications

Author:
Han Phoumin, Sopheak Meas, and Hatda Pich An
Publication Date:
03-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Many players have supported infrastructure development in the Mekong Subregion, bridging the missing links in Southeast Asia. While the influx of energy-related infrastructure development investments to the region has improved the livelihoods of millions of people on the one hand, it has brought about a myriad of challenges to the wider region in guiding investments for quality infrastructure and for promoting a low-carbon economy, and energy access and affordability, on the other hand. Besides reviewing key regional initiatives for infrastructure investment and development, this paper examines energy demand and supply, and forecasts energy consumption in the subregion during 2017–2050 using energy modelling scenario analysis. The study found that to satisfy growing energy demand in the subregion, huge power generation infrastructure investment, estimated at around $190 billion–$220 billion, is necessary between 2017 and 2050 and that such an investment will need to be guided by appropriate policy. We argue that without redesigning energy policy towards high-quality energy infrastructure, it is very likely that the increasing use of coal upon which the region greatly depends will lead to the widespread construction of coal-fired power plants, which could result in increased greenhouse gas and carbon dioxide emissions.
Topic:
Development, Energy Policy, Infrastructure, Renewable Energy, and Carbon Emissions
Political Geography:
China, Asia, Vietnam, Burma, Cambodia, Thailand, Southeast Asia, Laos, and Myanmar

102. The Impact of COVID-19 on Global Production Networks: Evidence from Japanese Multinational Firms

Author:
Hongyong Zhang
Publication Date:
03-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Using aggregate-level data on Japanese multinational corporations (MNCs) in major host countries and regions, this paper investigates the impact of COVID-19 on global production and supply chains with a focus on East Asia. I use the numbers of COVID-19 cases and deaths as measures of the impact of the pandemic. I find that the pandemic had substantial impacts on the performance (sales, employment, and investment) of Japanese MNCs and global supply chains (exports to Japan and exports to third countries) in Q1–Q3 2020. China recovered quickly in Q2 and grew in Q3, whilst the countries of the Association of Southeast Asian Nations and the rest of the world had still not fully recovered in Q3 2020. Importantly, lockdown and containment policies in host countries had large negative impacts on the sales and employment of Japanese MNCs. In contrast, I did not find positive effects of economic support policies on firm performance. Interestingly, whilst the firm expectations and business plans of Japanese MNCs were negatively affected by the COVID-19 pandemic, their business confidence increased with strong overall government policy responses in host countries in Q1 2020.
Topic:
Economic Development, Pandemic, COVID-19, and Production
Political Geography:
Japan and Asia

103. Demand and Supply Shocks of COVID-19 and International Production Networks: Evidence from Japan’s Machinery Trade

Author:
Mitsuyo Ando
Publication Date:
03-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper investigated the impacts of COVID-19 on international production networks in machinery sectors by shedding light on negative supply shocks, negative demand shocks, and positive demand shocks. Specifically, we examined changes in trade in the periods of falling trade during the first wave of COVID-19 using Japan’s machinery trade at the most disaggregated level and decomposed them into two intensive margins, i.e. the quantity effect and the price effect, and two extensive margins, i.e. the entry effect and the exit effect. Our empirical results demonstrated that i) trade relationships for parts and components are robust, and international production networks are almost intact, so far; ii) the intensive margin, mostly the negative quantity effect, induces the largest negative effects in the transport equipment sector amongst four machinery sectors; iii) positive demand shocks for specific products that are related to teleworking, disinfection, and stay-home activities partially explain sectoral differences; iv) direct negative supply shocks from China, suggested by a negative quantity effect and a positive price effect, exist in February 2020, with possible indirect negative supply shocks and substitution of source countries; and v) negative demand shocks are confirmed from negative quantity and price effects in many cases. As of October 2020, Japan’s machinery trade seems to have largely recovered. If the COVID-19 pandemic lasts long, however, prolonged negative demand shocks would hurt production networks in East Asia.
Topic:
Demand, Manufacturing, Economic Development, Pandemic, Industry, COVID-19, and Supply
Political Geography:
Japan and Asia

104. Demand and Supply Shocks of COVID-19 and International Production Networks: Evidence from Japan’s Machinery Trade

Author:
Mitsuyo Ando
Publication Date:
03-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper investigated the impacts of COVID-19 on international production networks in machinery sectors by shedding light on negative supply shocks, negative demand shocks, and positive demand shocks. Specifically, we examined changes in trade in the periods of falling trade during the first wave of COVID-19 using Japan’s machinery trade at the most disaggregated level and decomposed them into two intensive margins, i.e. the quantity effect and the price effect, and two extensive margins, i.e. the entry effect and the exit effect. Our empirical results demonstrated that i) trade relationships for parts and components are robust, and international production networks are almost intact, so far; ii) the intensive margin, mostly the negative quantity effect, induces the largest negative effects in the transport equipment sector amongst four machinery sectors; iii) positive demand shocks for specific products that are related to teleworking, disinfection, and stay-home activities partially explain sectoral differences; iv) direct negative supply shocks from China, suggested by a negative quantity effect and a positive price effect, exist in February 2020, with possible indirect negative supply shocks and substitution of source countries; and v) negative demand shocks are confirmed from negative quantity and price effects in many cases. As of October 2020, Japan’s machinery trade seems to have largely recovered. If the COVID-19 pandemic lasts long, however, prolonged negative demand shocks would hurt production networks in East Asia.
Topic:
Demand, Manufacturing, Economic Development, Pandemic, Industry, COVID-19, and Supply
Political Geography:
Japan and Asia

105. Demand and Supply Shocks of COVID-19 and International Production Networks: Evidence from Japan’s Machinery Trade

Author:
Mitsuyo Ando
Publication Date:
03-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper investigated the impacts of COVID-19 on international production networks in machinery sectors by shedding light on negative supply shocks, negative demand shocks, and positive demand shocks. Specifically, we examined changes in trade in the periods of falling trade during the first wave of COVID-19 using Japan’s machinery trade at the most disaggregated level and decomposed them into two intensive margins, i.e. the quantity effect and the price effect, and two extensive margins, i.e. the entry effect and the exit effect. Our empirical results demonstrated that i) trade relationships for parts and components are robust, and international production networks are almost intact, so far; ii) the intensive margin, mostly the negative quantity effect, induces the largest negative effects in the transport equipment sector amongst four machinery sectors; iii) positive demand shocks for specific products that are related to teleworking, disinfection, and stay-home activities partially explain sectoral differences; iv) direct negative supply shocks from China, suggested by a negative quantity effect and a positive price effect, exist in February 2020, with possible indirect negative supply shocks and substitution of source countries; and v) negative demand shocks are confirmed from negative quantity and price effects in many cases. As of October 2020, Japan’s machinery trade seems to have largely recovered. If the COVID-19 pandemic lasts long, however, prolonged negative demand shocks would hurt production networks in East Asia.
Topic:
Demand, Manufacturing, Economic Development, Pandemic, Industry, COVID-19, and Supply
Political Geography:
Japan and Asia

106. The COVID-19 Pandemic and the World Trade Network

Author:
Kozo Kiyota
Publication Date:
03-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Global trade is expected to suffer a significant contraction as a result of the COVID-19 pandemic. Did the relative importance of countries in the world trade network change as a result of the pandemic? The answer to this question is particularly important for Association of Southeast Asian Nations (ASEAN) countries because of their strong trade linkages with China, where the COVID-19 virus originated. This paper examines how the world trade network has changed since the COVID-19 pandemic, with a particular focus on ASEAN countries. Tracking the changes in centrality from January 2000 to June 2020, we find no evidence that centrality changed significantly after the pandemic started for most ASEAN countries. Our results suggest that the relative importance of the ASEAN countries in the world trade network is unchanged and will remain unchanged even after the pandemic.
Topic:
Globalization, International Trade and Finance, Pandemic, and COVID-19
Political Geography:
Asia and Southeast Asia

107. How Is the Asian Economy Recovering from the COVID-19 Pandemic? Evidence from the Emissions of Air Pollutants

Author:
Kazunobu Hayakawa
Publication Date:
03-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This study empirically examines how economic and social activities in Asia were affected by the COVID-19 pandemic by using the emissions amounts of various air pollutants to represent those activities. Review of the emissions data suggests that from 2019 to 2020, the amount of emitted air pollutants decreased in most subnational regions in Asia. Data also show how economic and social activities have restarted in some regions; regression analyses are used to uncover the regions that restarted early. Regional characteristics are identified by employing a remotely sensed land cover dataset (i.e. ESALC) and OpenStreetMap. Results reveal that for Association of Southeast Asian Nations (ASEAN) members, economic and social activities in cropland, industrial estates, accommodations, restaurants, education, and public services still have not returned to normal.
Topic:
Environment, Economy, Pandemic, COVID-19, Air Pollution, and Economic Recovery
Political Geography:
Asia and Southeast Asia

108. The COVID-19 Pandemic, Air Transport Perturbation, and Sector Impacts in ASEAN Plus Five: A Multiregional Input–Output Inoperability Analysis

Author:
Tamat Sarmidi, Norlin Khalid, Sufian Jusoh, and Muhamad Rias K.V. Zainuddin
Publication Date:
04-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This study simulates the sector impacts of demand-side perturbations on air transport sectors due to the COVID-19 pandemic, focusing on ASEAN members plus Australia, China, Japan, the Republic of Korea, and New Zealand. This study involves (i) the generation of a multiregional input–output table from the latest Global Trade Analysis Project data, (ii) a network analysis to determine the importance of the air transport industry in each country, (iii) multiplier and linkages analyses, (iv) determinations of sector impacts from demand-side perturbations on air transport sectors due to the COVID-19 pandemic, and (v) simulation of the effect of fiscal and monetary measures to mitigate the pandemic’s impact. This study demonstrates that the aviation industry is a key sector in domestic and regional economic activities, and the reduction in air transport consumer demand due to the pandemic is estimated to cause gross domestic product (GDP) reductions from 0.4% to 2.1%. Government intervention, through fiscal and monetary policies, has, however, mitigated severe impact, moderating GDP and value-added losses. Thus, a viable policy prescription for the aviation industry is of utmost importance.
Topic:
Globalization, International Trade and Finance, Pandemic, COVID-19, and Travel
Political Geography:
Asia and Southeast Asia

109. COVID-19 and Services Trade in ASEAN+6: Implications and Estimates from Structural Gravity

Author:
Anirudh Shingal
Publication Date:
04-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Given the importance of services for economic activity in general and the salience of reducing service link costs for overcoming the economic and health challenges emanating from COVID-19, we examine the implications of the pandemic for services trade in the original group of ASEAN+6 countries that began negotiating the Regional Comprehensive Economic Partnership agreement. Our analysis reveals that with the exception of the Philippines and Viet Nam for services exports, and Cambodia and India for services imports, up to half of total services trade for all other sample countries could be adversely affected by the pandemic. In the absence of bilateral services trade data for 2020, we proxy the impact of COVID-19 on services trade using bilateral data on announced greenfield investment in services sectors from fDi Markets. Structural gravity estimates suggest that a 1% increase in COVID-19-related deaths in the source country may have reduced ASEAN+6 bilateral greenfield investment by US$0.15 million in 2020 relative to the corresponding value in 2019.
Topic:
Investment, Services, Pandemic, and COVID-19
Political Geography:
Asia and Southeast Asia

110. The Effect of the COVID-19 Pandemic on Global Production Sharing in East Asia

Author:
Archanun Kohpaiboon and Juthatip Jongwanich
Publication Date:
04-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper examines the effect of the COVID-19 pandemic on global production sharing in ASEAN Member States. Product-level analysis – on hard disk drives, air conditioners, microwaves, televisions, washing machines, and automotive parts – is undertaken to examine trade patterns between January 2019 and October/November 2020. The key finding suggests that the pandemic caused parts shortages, but this effect has been short-lived. There is no strong evidence that multi-national enterprises have altered their supply chains or means of sourcing parts and components in response to the pandemic. There is some indication that multi-national enterprises are moving away from China, but whether this reflects a ‘COVID-19 effect’ or the trade war between the United States and China is not clear. COVID-19, a once-in-a-century event, may not alone be a compelling reason to restructure supply chain management relating to global production sharing, which has been a structural phenomenon driving economic globalisation.
Topic:
Globalization, Pandemic, COVID-19, Supply Chains, and Production
Political Geography:
East Asia, Asia, and Southeast Asia

111. COVID-19 and Socio-Economic Inequalities in Indonesia: A Subnational-level Analysis

Author:
Aloysius Gunadi Brata, Eusebius Pantja Pramudya, Esther Sri Astuti, Heffi Christya Rahayu, and Heronimus Heron
Publication Date:
04-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This study examines if COVID-19 has worsened socio-economic inequalities across provinces in Indonesia, and if it has affected the spatial disparity in provincial-level socio-economic indicators. Secondary provincial-level data are used from BPS for March 2015 to March 2020. Results indicate that provinces with more COVID-19 cases tend to have increased inequality in urban areas, but inequality in rural areas decreases, as measured by the Gini Index. Also, provinces with many COVID-19 cases tend to have a decrease in their poverty headcount ratios. Thus, COVID-19 may have various implications on the spatial inequality of the Gini Index and poverty headcount ratio.
Topic:
Inequality, Pandemic, COVID-19, and Socioeconomics
Political Geography:
Indonesia, Asia, and Southeast Asia

112. Facilitating Trade in Pharmaceuticals: A Response to the COVID-19 Pandemic

Author:
Ben Shepherd
Publication Date:
04-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper reviews trade in pharmaceutical products, focusing on ASEAN countries. Trade in this sector is of singular policy importance as a result of the COVID-19 pandemic. First, the paper shows that pharmaceuticals are traded within Global Value Chains, which in turn means that international linkages are complex. Second, the paper shows that policy reforms can help boost trade in the sector, which has important human development implications during the pandemic period.
Topic:
Globalization, International Trade and Finance, Pandemic, Global Value Chains, COVID-19, and Pharmaceuticals
Political Geography:
Asia and Southeast Asia

113. Could the COVID-19 Crisis Affect Remittances and Labour Supply in ASEAN Economies? Macroeconomic Conjectures Based on the SARS Epidemic

Author:
Alberto Posso
Publication Date:
04-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Debates on resilience to economic shocks in the ASEAN region focus on what policymakers can do to mitigate negative impacts associated with financial-economic crises. The COVID-19 pandemic has made it clear that the region is also vulnerable to health-economic crises. This study applies a difference-in-difference strategy to data from the 2003 SARS epidemic to shed light on how a global pandemic can affect labour supply and remittances in ASEAN economies. Findings suggest that even a relatively short-lived epidemic can have long-lasting effects on labour supply.
Topic:
Economics, Labor Issues, Pandemic, COVID-19, and Supply
Political Geography:
Asia and Southeast Asia

114. Financial Market Responses to Government COVID-19 Pandemic Interventions: Empirical Evidence from South-East and East Asia

Author:
Hai Anh La and Riyana Miranti
Publication Date:
04-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This study investigates the impact of various government interventions on the spread of COVID-19 as well as stock markets in South-East and East Asia. It finds that stricter interventions – including gathering restrictions, public event cancellations, and mask requirements – helped mitigate the severity of the pandemic significantly in the region. Total border closures had a moderate effect on flattening COVID-19 spread, especially during the onset of the pandemic. Other policies, such as school closures or stay-at-home orders, worked effectively later in the pandemic. The study also shows evidence of herding behaviours in regional stock markets during the pandemic. School closures, gathering restrictions, stay-at-home orders, domestic travelling bans, robust testing policies, and government income support programmes tended to reduce herding behaviour. More stock market integration is found during the onset of the pandemic, compared to the periods before and later in the pandemic, implying the short-term impact of a sudden shock from COVID-19.
Topic:
Governance, Financial Markets, Pandemic, COVID-19, Stock Markets, and Financial Development
Political Geography:
Asia and Southeast Asia

115. How ASEAN Can Improve Its Response to the Economic Crisis Generated by the COVID-19 Pandemic: Inputs drawn from a comparative analysis of the ASEAN and EU responses

Author:
Antonio Fanelli
Publication Date:
05-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper conducts a comparative review of the evolution of the economic crisis generated by the coronavirus disease (COVID-19) pandemic and the responses enacted by the Association of Southeast Asian Nations (ASEAN) and the European Union. It highlights differences and common elements in the strategic approaches, the intensity of the interventions, and governance structures. In the final section, it identifies short- and medium-term actions, inspired by the comparative analysis, which could contribute to improve the ASEAN response.
Topic:
Regional Cooperation, Governance, European Union, Leadership, Pandemic, and COVID-19
Political Geography:
Europe, Asia, and Southeast Asia

116. East Asian Production Networks Amidst the COVID-19 Shock

Author:
Ayako Obashi
Publication Date:
06-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
In the East Asian context, previous studies showed that trade occurring through production networks remained relatively steady amidst an economic shock and recovered faster and stronger once the shock was over. Using finely disaggregated product-level monthly bilateral trade data, we examine whether network trade in the East Asian region has been robust and resilient in face of the COVID-19 crisis, as well as in normal times, by conducting a series of survival analyses. We find a new set of empirical evidence suggesting the robustness of East Asian network trade in normal times and its resilience even amidst the COVID-19 shock.
Topic:
International Trade and Finance, Public Health, Pandemic, COVID-19, and Production
Political Geography:
East Asia, Asia, and Southeast Asia

117. A ‘She-session’? The Impact of COVID-19 on the Labour Market in Thailand

Author:
Sasiwimon W. Paweenawat and Lusi Liao
Publication Date:
06-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper studies the impact of COVID-19 on different demographic groups in the Thai labour market using the Labour Force Survey in 2018 and 2019. We construct a new set of COVID-19 impact indicators capturing both the degree of risk in industries and degree of occupational flexibility in the Thai context. Our results show that the impact of the COVID-19 pandemic is highly unequal across demographic groups and it may further worsen the pre-existing inequality in the Thai labour market as a result of the composition of industrial sectors and occupations. The results suggest that education attainments and income levels play a significant role in protecting individuals from the current crisis, indicating the important contribution of human capital. In addition, marriage affects men and women differently in the COVID-19 crisis, with married women suffering more. Finally, our study highlights the need for government supports that target vulnerable groups, including workers with low education, informal workers, private employees, older women, and the young, who are more likely to be affected by COVID-19.
Topic:
Labor Issues, Governance, Employment, Pandemic, COVID-19, and Labor Market
Political Geography:
Asia, Thailand, and Southeast Asia

118. COVID-19 Tourism Recovery in the ASEAN and East Asia Region: Asymmetric Patterns and Implications

Author:
Stathis Polyzos, Anestis Fotiadis, and Aristedidis Samitas
Publication Date:
06-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
The aim of this paper is to produce forecasts for tourism flows and tourism revenue for ASEAN and East Asian countries after the end of the COVID-19 pandemic. By implementing two different machine-learning methodologies (the Long Short Term Memory neural network and the Generalised Additive Model) and using different training data sets, we aim to forecast the recovery patterns for these data series for the first 12 months after the end of crisis. We thus produce a baseline forecast, based on the averages of our different models, as well as a worst- and best-case scenario. We show that recovery is asymmetric across the group of countries in the ASEAN and East Asian region and that recovery in tourism revenue is generally slower than in tourist arrivals. We show significant losses of approximately 48%, persistent after 12 months, for some countries, while others display increases of approximately 40% when compared to pre-crisis levels. Our work aims to quantify the projected drop in tourist arrivals and tourism revenue for ASEAN and East Asian countries over the coming months. The results of the proposed research can be used by policymakers as they determine recovery plans, where tourism will undoubtedly play a very important role.
Topic:
Tourism, Economy, Public Health, Pandemic, and COVID-19
Political Geography:
Asia and Southeast Asia

119. How Do Sectoral Employment Structures Affect Mobility during the COVID-19 Pandemic?

Author:
Donny Pasaribu, Deasy Pane, and Yudi Suwarna
Publication Date:
06-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
As people’s mobility determines the spread of COVID-19 virus, this paper scrutinises factors that drive their mobility responses during the pandemic. Utilising Google mobility data, labour force statistics and daily COVID-19 data, this study finds that mobility changes are induced by various heterogeneous behavioural responses across provinces in Indonesia. Variations in the pre-pandemic labour structure, people’s perception of health risks and local policy settings define the mobility changes. In addition, behavioural responses are larger in the early pandemic phase, indicating the importance of arrangements to manage the situation in the early period.
Topic:
Labor Issues, Employment, Mobility, Public Health, Pandemic, Job Creation, and COVID-19
Political Geography:
Asia and Southeast Asia

120. The Effect of Non-Tariff Measures on Global Value Chain Participation

Author:
Upalat Korwatanasakul
Publication Date:
06-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This study examines the impact of non-tariff measures (NTMs) on global value chain (GVC) participation and the underlying mechanisms. Our study employs a novel approach using an additional compliance requirement indicator as a relative proxy for NTMs to measure their impact on GVC participation. We conduct a cross-sectional analysis at the industry level, spanning 19 industrial sectors in 30 countries in 2015. We combine our additional compliance requirement indicator dataset calculated from NTM data in the Trade Analysis Information System, with our dataset on trade in value added estimated from the Organisation for Economic Co-operation and Development Inter-Country Input–Output Table. Our analysis finds that, while NTMs and tariffs both negatively impact backward GVC participation, the impact of NTMs is greater than that of tariff measures. Moreover, the estimated results show that inward foreign direct investment is positively associated with backward GVC participation. Therefore, policies that reduce trade costs from policy barriers, especially NTMs, and attract more foreign direct investment can help promote GVC participation.
Topic:
Globalization, International Trade and Finance, Industry, Global Value Chains, and Non-Tariff Measures
Political Geography:
Asia and Southeast Asia