Moving up the ladder : development challenges for low and middle-income Asia

267 Pages·2016·3.899 MB·English

by  Hamori, Shigeyuki, Kabe, Shigesaburō, Kinkyo, Takuji, Ushiyama, Ryūichi

MOVING UP
THE LADDER
Development Challenges for
Low and Middle-Income Asia
9801_9789814723565_TP.indd 1 28/1/16 11:02 AM
May2,2013 14:6 BC:8831-ProbabilityandStatisticalTheory PST˙ws
TThhiiss ppaaggee iinntteennttiioonnaallllyy lleefftt bbllaannkk
MOVING UP
THE LADDER
Development Challenges for
Low and Middle-Income Asia
Editors
Shigesaburo Kabe
Nikkei Inc., Japan
Ryuichi Ushiyama
Japan Center For Economic Research, Japan
Takuji Kinkyo
Kobe University, Japan
Shigeyuki Hamori
Kobe University, Japan
World Scientific
NEW JERSEY • LONDON • SINGAPORE • BEIJING • SHANGHAI • HONG KONG • TAIPEI • CHENNAI • TOKYO
9801_9789814723565_TP.indd 2 28/1/16 11:02 AM
Published by
World Scientific Publishing Co. Pte. Ltd.
5 Toh Tuck Link, Singapore 596224
USA office: 27 Warren Street, Suite 401-402, Hackensack, NJ 07601
UK office: 57 Shelton Street, Covent Garden, London WC2H 9HE
Library of Congress Cataloging-in-Publication Data
Moving up the ladder (Kabe and others)
Moving up the ladder : development challenges for low & middle income Asia / [edited by]
Shigesaburo Kabe (Nikkei Inc., Japan) [and three others].
pages cm
Includes bibliographical references.
ISBN 978-9814723565 (alk. paper)
1. Income--Asia. 2. Middle class--Asia. 3. Economic development--Asia. 4. Asia--Economic
conditions--21st century. 5. Asia--Economic policy--21st century. I. Kabe, Shigesaburo, editor.
II. Ushiyama, Ryuichi. Current situation and challenges of Asia’s middle-income economies.
Container of (work): III. Title.
HC415.I5M68 2016
338.95--dc23
2015032181
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library.
Copyright © 2016 by World Scientific Publishing Co. Pte. Ltd.
All rights reserved. This book, or parts thereof, may not be reproduced in any form or by any means,
electronic or mechanical, including photocopying, recording or any information storage and retrieval
system now known or to be invented, without written permission from the publisher.
For photocopying of material in this volume, please pay a copying fee through the Copyright Clearance
Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA. In this case permission to photocopy
is not required from the publisher.
In-house Editors: Harini/Lum Pui Yee
Typeset by Stallion Press
Email: [email protected]
Printed in Singapore
Pui Yee - Moving up the Ladder.indd 1 22/12/2015 8:35:52 AM
January28,2016 20:27 MovingUptheLadder-9inx6in b2267-fm pagev
Contents
About the Editors xiii
Introduction xv
Part I: Current Status and Development Challenges
for Asia 1
Chapter 1. Current Situation and Challenges
of Asia’s Middle-Income Economies 3
Ryuichi Ushiyama
1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . 3
2. The current situation of the Asian economy . . . . . . . . 4
3. The “middle-income trap” . . . . . . . . . . . . . . . . . 8
4. “Trap” and emerging Asia . . . . . . . . . . . . . . . . . 12
5. Why a country falls into the “trap” and how to overcome
the “trap” . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6. Changes in environment . . . . . . . . . . . . . . . . . . . 17
7. Challenges and measures for each country . . . . . . . . . 19
7.1. Malaysia . . . . . . . . . . . . . . . . . . . . . . . . 20
7.2. China . . . . . . . . . . . . . . . . . . . . . . . . . 21
7.3. Thailand. . . . . . . . . . . . . . . . . . . . . . . . 22
7.4. Vietnam . . . . . . . . . . . . . . . . . . . . . . . . 23
7.5. India . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . 24
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
v
January28,2016 20:27 MovingUptheLadder-9inx6in b2267-fm pagevi
vi Moving Up the Ladder
Chapter 2. Determinants of Economic Growth
in East Asia: A BMA Approach 29
Hiroyasu Hasegawa and Shigeyuki Hamori
1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . 29
2. Empirical techniques . . . . . . . . . . . . . . . . . . . . 31
3. Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4. Empirical results . . . . . . . . . . . . . . . . . . . . . . . 34
5. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . 37
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Part II: Common Policy Issues in Asian
Countries 39
Chapter 3. Industrial Structural Change
andProductivity Growthinthe Era
of Global Value Chains (GVCs) 41
Fumihide Takeuchi
1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . 41
2. Industrial structural upgrading in the era of GVCs . . . . 43
2.1. Expansion of GVCs in the 2000s . . . . . . . . . . 43
2.2. Industrial structural upgrading in Asia
and other economies . . . . . . . . . . . . . . . . . 44
2.3. Gross statistics-based comparative advantage
versus net statistics-based comparative
advantage . . . . . . . . . . . . . . . . . . . . . . . 46
2.4. Appropriate indicator to measure industrial
structural upgrading in the era of GVCs . . . . . . 48
3. Econometric analysis . . . . . . . . . . . . . . . . . . . . 50
3.1. International outsourcing and productivity . . . . 50
3.2. Data . . . . . . . . . . . . . . . . . . . . . . . . . . 52
3.3. Empirical methodology and estimation results . . . 53
3.4. Index to measure industrial
structure upgrading . . . . . . . . . . . . . . . . . 56
January28,2016 20:27 MovingUptheLadder-9inx6in b2267-fm pagevii
Contents vii
4. Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . 58
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Chapter 4. Financial Development, Openness,
and Growth Performance 61
Wang Chen and Takuji Kinkyo
1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . 61
2. The current state of financial development
in East Asia . . . . . . . . . . . . . . . . . . . . . . . . . 63
3. Financial development, openness,
and growth performance . . . . . . . . . . . . . . . . . . 66
3.1. Econometric method and data . . . . . . . . . . . 66
3.2. Estimation results . . . . . . . . . . . . . . . . . . 68
4. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . 75
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Chapter 5. Human Resource Development
in Asia: Expected Role of Higher
Education 81
Shigesaburo Kabe
1. Overview of human resource development
and economic development . . . . . . . . . . . . . . . . . 81
2. Increasing expectations for higher education: Factors
enhancing the significance of higher education . . . . . . 83
2.1. Globalisation . . . . . . . . . . . . . . . . . . . . . 84
2.2. Increasing populations and economic power:
China and India . . . . . . . . . . . . . . . . . . . 85
2.3. Low fertility and aging populations . . . . . . . . . 86
3. The current situation of high education in Asia . . . . . . 89
4. Expected role of higher education . . . . . . . . . . . . . 92
5. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . 96
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
January28,2016 20:27 MovingUptheLadder-9inx6in b2267-fm pageviii
viii Moving Up the Ladder
Part III: Case Studies: Current State and
Challenges of Five Asian Countries 101
Chapter 6. Affirmative Action and
Transformation in Malaysia 103
Hwok-Aun Lee
1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . 103
2. Affirmative action: Concept and Malaysia context . . . . 104
2.1. Defining affirmative action . . . . . . . . . . . . . . 104
2.2. The new economic policy (NEP) . . . . . . . . . . 105
2.3. Affirmative action and transformation . . . . . . . 107
3. Affirmative action programs . . . . . . . . . . . . . . . . 109
3.1. Higher education . . . . . . . . . . . . . . . . . . . 109
3.2. High level occupations . . . . . . . . . . . . . . . . 112
3.3. Managerial and enterprise development . . . . . . 112
3.4. Equity and wealth ownership . . . . . . . . . . . . 113
4. Affirmative action outcomes . . . . . . . . . . . . . . . . 114
4.1. Higher education . . . . . . . . . . . . . . . . . . . 115
4.2. High level occupations . . . . . . . . . . . . . . . . 117
4.3. Managerial and enterprise development . . . . . . 119
4.4. Equity and wealth ownership . . . . . . . . . . . . 120
5. Current policy discourses . . . . . . . . . . . . . . . . . . 121
6. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . 123
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
Chapter 7. Vietnam: New Doi Moi: Strategy
and Priorities of Development
Policies for Lower Middle
Income Country 129
Nguyen Cao Duc
1. Overview of current economic situation in Vietnam . . . 129
1.1. Current macroeconomic situation of Vietnam:
2007–2014 . . . . . . . . . . . . . . . . . . . . . . . 129
1.2. Brief introduction of three biggest challenges
of Vietnam . . . . . . . . . . . . . . . . . . . . . . 131
January28,2016 20:27 MovingUptheLadder-9inx6in b2267-fm pageix
Contents ix
2. The process of Doi Moi policy and its evaluation
and challenges . . . . . . . . . . . . . . . . . . . . . . . . 131
2.1. The objective and content of Doi Moi policy
in Vietnam . . . . . . . . . . . . . . . . . . . . . . 131
2.2. Performance of Doi Moi policy in Vietnam . . . . . 132
2.3. Evaluation of Vietnam’s Doi Moi policy . . . . . . 140
2.4. Challenges of Doi Moi policy under Vietnam’s
new context . . . . . . . . . . . . . . . . . . . . . . 142
3. New renovation policy: its objectives, contents,
and evaluation . . . . . . . . . . . . . . . . . . . . . . . . 142
3.1. Vietnam’s new renovation policy . . . . . . . . . . 142
3.2. Evaluation of Vietnam’s new
renovation policy . . . . . . . . . . . . . . . . . . . 147
3.3. Challenges of the new renovation under
the new context . . . . . . . . . . . . . . . . . . . . 149
3.4. Perspectives of the new renovation to avoid
middle-income trap . . . . . . . . . . . . . . . . . . 150
4. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . 150
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152
Chapter 8. Thailand: How to Consolidate
Social Security Systems: Universal
Healthcare/Pension Systems 155
Worawan Chandoevwit, Tirnud Paichayontvijit
and Yos Vajragupta
1. Overview of the current economic situation
in Thailand . . . . . . . . . . . . . . . . . . . . . . . . . . 156
2. Challenges for further development
of the Thai economy . . . . . . . . . . . . . . . . . . . . . 160
3. Universal health care coverage . . . . . . . . . . . . . . . 163
3.1. Moving from targeting programs
to an entitlement program . . . . . . . . . . . . . . 165
3.2. The issue of inequity . . . . . . . . . . . . . . . . . 172
4. Public pension for elderly . . . . . . . . . . . . . . . . . . 176
4.1. Social assistance program for the elderly . . . . . . 178