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Regardless of the size of the domestic economy, there are ample reasons for firms to extend their markets beyond home shores. These include increasing sales, improving profits, diversifying risks, reaping economies of scale, matching the moves of competitors, enhancing competitiveness or accessing government incentives.Both Indonesia and Malaysia seek to enhance the competitiveness of their micro, small and medium enterprises (MSMEs) by including internationalization goals in their respective national development plans for these enterprises.Findings from fourteen case studies in the two countries indicate that exporting may be a serendipitous discovery, as few of these cases were born global in intent. Shifting to intentional exporting will require entrepreneurs to tap into government and/or private networks and thus connect with international buyers.Indonesian MSMEs are more inclined to depend more on government than private networks as they perceive the former to be more credible. Malaysian cases indicate some firms prefer private to government networks. This is attributed to the differences in the political economy of the two countries.Going forward, both countries need to consolidate their government-run programmes and reduce the fiscal burden. MSMEs should tap more into private networks to bridge the information gap that hinders their access to external markets.ASEAN can facilitate the entry of MSMEs into the ASEAN market by implementing resolutely current plans to reduce technical barriers to trade.
China's rise exerts a powerful pull on ASEAN economies and constitutes an impetus for a resinicization of Overseas Chinese in Southeast Asia.China has become a skilled practitioner of "commercial diplomacy", and as long as it continues to lead the way in regional integration, China's state-led capitalism will seek to integrate itself into the ASEAN Economic Community. This in effect becomes China's essential strategy of desecuritization for the region.With increasing trade and investment between China and ASEAN countries, the ethnic Chinese economic elites have managed to serve as "connectors and bridges" between the two sides, and benefited in the process from joint ventures and business investments. The impact of new Chinese Capitalism on SMEs, however, has not been equally positive.As China rises, Southeast Asia has witnessed increased complexity and variations of "hybrid capitalism", including alliances between state-led capitalism, transnational entrepreneurs emanating from China's "going out" policy and ethnic Chinese in Southeast Asia.Three main forms of Chinese Capitalism in Southeast Asia are neoliberal capitalism, flexible capitalism and Confucian capitalism. These intermingle into a range of local varieties under different socio-economic conditions.
Small and medium-sized enterprises (SMEs) account for more than 90 per cent of all businesses in the Asia-Pacific region -- an area which is rapidly updating its competition laws and regulations to encourage greater entrepreneurship and open, dynamic economies. Yet SMEs are almost invisible when those competition policies and laws are developed and enforced. SMEs are often quite different businesses than large, multinational corporations, but their nature, significance and characteristics are often overlooked. This book seeks to rectify the relative neglect in research and policy discussions on the role of the SME sector in competition policy and law. Drawing on contributions from a wide range of competition regulators, lawyers, academics, consultants and advisers to the SME sector, it addresses such important issues as: - perceptions and views of small businesses about competition law; - regulator engagement and education of the SME sector; - the link between competition law and economic growth; - franchising, SMEs and competition law; - issues in enforcing competition law against SMEs; - the role of Chinese family firms; - trade, professional and industry associations; - country case studies from Vietnam, Singapore, Indonesia, Malaysia, China, South Korea, Hong Kong SAR, Japan and the Pacific Islands. "This book is an important step in remedying the gaps in our knowledge and policy of this important area." -- Dr Alan Bollard, Executive Director, APEC Secretariat
Malaysia established the Digital Free Trade Zone (DFTZ) to facilitate the development of e-commerce and the country's small and medium enterprises' (SMEs') exports. The data revealed thus far indicates an increasing number of SMEs coming on board the DFTZ e-commerce platforms.The publicly disclosed data focus on the value of exports achieved but do not show whether these are from new or existing exporters or whether they are re-exports. They also do not highlight Malaysia's imports through the zone.The overall trend signals that Malaysia is losing its bilateral revealed comparative advantage in exports to China, as well as an increasing use of imports for exporting to China.While the DFTZ facilitates both exports and imports, differing standards and customs processes in different export destinations, including China, will require Malaysian SMEs to know and understand the standards and customs processes governing imports in each export destination involved.Imports are also encouraged by the de minimis rule, which allows duty- and tax-free imports of up to RM800 into Malaysia. Overall, imports can help enhance the competitiveness of Malaysian SMEs, expand choices for Malaysian consumers, as well as facilitate re-exports.A clearer understanding of the role of DFTZ in facilitating trade will require more detailed data collection, and a closer investigation of the imports going through the zone, and their uses.
In recent times, the United States, Japan and Australia have all promoted extremely similar visions of a Free and Open Indo-Pacific as the central organizing concept to guide their efforts in the region. The concept is essentially a reaffirmation of the security and economic rules-based order which was cobbled together after the Second World War -- especially as it relates to freedom of the regional and global commons such as sea, air and cyberspace, and the way nations conduct economic relations.Be that as it may, the Free and Open Indo-Pacific is an updated vision of collective action to defend, strengthen and advance that order. It signals a greater acceptance by the two regional allies of the U.S. of their security burden and takes into account the realities of China's rise and the relative decline in dominance of the U.S.There are a number of noteworthy "updates" which include:* A deliberate move from "Asia-Pacific" to "Indo-Pacific" as the primary geo-strategic and geo-economic area of interest and responsibility for the three countries;* An increased emphasis on creating and sustaining a "balance of power" in favour of the rules-based order; and* A greater emphasis on the liberal aspects of a preferred order including the importance of rule-of-law and limitations on how governments wield their power, and greater separation of political and strategic objectives on one hand with commercial activities on the other.While operationalization of the Free and Open Indo-Pacific concept is at an early stage, trilateral strategic cooperation between the U.S., Japan and Australia is significant and quickly deepening. On the other hand, and with respect to misalignment and inconsistency, the economic policies of the Trump administration are causing considerable frustration.The three countries have also been strong supporters for the revival of the Quadrilateral grouping which also includes India. However, and notwithstanding some apprehension in Southeast Asia, about where the "Quad" is heading, the latter grouping is only still a fledgling one and its shape and development will depend on the extent to which the four countries become concerned about China's activities in both Oceans.Finally, the Association of Southeast Asian Nations (ASEAN) and its member states continue to delay any definitive response to the Free and Open Indo-Pacific concept. Although its principles are attractive to many ASEAN member states, long-held conceptions of ASEAN centrality and its meaning gives the organization apparent reason for hesitation. The reasons include fears of diminished centrality and relevance, and reluctance to endorse a more confrontational mindset being adopted by the U.S. and its allies -- including the revival of the Quadrilateral grouping with India -- with respect to China.The reality is that while ASEAN and major member states are focused primarily on the risks of action, there are considerable risks of inaction and hesitation. The current era will either enhance or lessen the relevance of ASEAN in the eyes of these three countries in the years ahead depending on how the organisation and its key member states respond.Indeed, the paper argues that ASEAN is more likely to be left behind by strategic events and developments if it remains passive, and that the ball is in ASEAN's court in terms of the future of its regional "centrality".
For Indonesia, which is keen to accelerate its infrastructure development, Belt and Road Initiative (BRI) is seen as an opportunity to tap into China's huge financial resources and technological capability.There has however been no concrete BRI project agreed to between China and Indonesia so far. While China considers all projects, including infrastructure projects and economic interactions as part of BRI, Indonesia only considers those infrastructure projects initiated during the Xi Jinping period as BRI projects.Indonesia has offered several broad areas for cooperation under the BRI framework and carefully selected project locations to minimize political risk for the Joko Widodo government. But no agreements have been signed yet as China requires detailed project proposals from Indonesia, which it has apparently not received.What appears to hamper progress are four key issues: the perception of China's economic domination, the ethnic Chinese issue, the Natuna issue, and the mainland Chinese workers issue.
Growing urbanization, increasing trade and investment due to integration, and emerging new business models like e-commerce are accelerating the demand for efficient logistics in each ASEAN country.The logistics sector is inherently complex due to its scope, ranging from physical infrastructure covering four modes of transport, customs, and services. Each of these sub-sectors is regulated by different government agencies, leading to complex challenges in each country's logistics sector.Policymaking has a tendency to be done piecemeal rather than integratively, while a more or less fragmented governance structure impedes implementation. ASEAN liberalization commitments focusses on raising the cap on foreign equity, while regulatory reform remains untouched. Also, flexibility offered in these commitments allows for non-compliance.Going forward, developing seamless logistics requires ASEAN countries to first overcome their domestic challenges. Each country needs to develop comprehensive plans, and effective implementation of these is essential. Liberalization commitments should complement domestic reforms in each country.
The global centre of gravity continues to shift to the Asia-Pacific, the most dynamic region in the world. These economies have generally grown faster for longer periods of time than any other major region in world history. Their embrace of globalization has been a central feature, and driver, of their dynamism. The management of Asia-Pacific economic integration and globalization is crucial not only for the countries themselves but also for the state of the global economy, including importantly latecomer developing economies who look to the region for analytical and development policy lessons. Twenty-eight leading international authorities in the field, drawn from nine countries, provide a comprehensive examination of the causes, consequences and challenges of globalization, in a volume that celebrates the distinguished career of Professor Prema-Chandra Athukorala. Among the major issues examined are the region's distinctive approach to trade liberalization, the effects of economic growth on poverty reduction and the labour market, the special challenges of by-passed regions, the role of ideas in influencing policy making, the modalities of connecting to global production networks, and the importance of remittances in economic development. Several country case studies provide in-depth analyses of development processes and outcomes. These include episodes in economic development, the challenges faced by transition economies, the macroeconomics of adjusting to slower growth and rising debt in advanced economies, and the so-called middle-income trap phenomenon.
The level of outward foreign direct investment (OFDI) flows from ASEAN countries has increased rapidly in past two decades. This book examines OFDI trends and patterns in the ASEAN region including the impact of the ASEAN Economic Community. It also provides analyses of country policies affecting OFDI and the drivers of OFDI in Indonesia, Malaysia, Singapore and Vietnam. Myanmar is studied as an investment frontier for other ASEAN countries. "The dynamic economies of Southeast Asia have historically been very large recipients of foreign direct investment (FDI). As global capital markets have opened up, and these economies have developed their technological and commercial capabilities, in more recent years Southeast Asia has emerged as a significant source of outward FDI both within the region and beyond. This important volume, by a group of leading regional scholars, offers a timely, comprehensive, accessible and authoritative analysis of this phenomenon." -- Hal Hill, H.W. Arndt Professor of Southeast Asian Economies, Arndt-Corden Department of Economics, Crawford School of Public Policy, Australian National University "A timely, rich and comprehensive study filling a major gap in the literature on the increasingly important phenomenon of foreign investment flowing out from regions including developing and middle-income countries." -- Luke Nottage, Professor of Comparative and Transnational Business Law; Associate Director, Centre for Asian and Pacific Law at the University of Sydney
In this volume, a leading group of scholars pose the question, has the Philippine economy rejoined the dynamic East Asian mainstream and, if so, what set of policies and priorities are required to maintain the strong economic momentum of recent years? Successive chapters address issues related to growth and poverty, infrastructure and urbanization, education, health, the environment, energy, development finance, and governance and institutions. The book has been written with a broad audience in mind. First and foremost it is for readers in, and interested in, this fascinating and important country with a population that now exceeds a hundred million. Second, it will appeal to those in the broader development community with an interest in the analytical and policy challenges that democratic, middle-income countries face as they struggle to lift their citizens out of poverty and to achieve broad-based and environmentally sustainable growth.
Batam's economic transformation has been accompanied by a marked degradation of its natural environment. Enforcement to protect the environment has often been inadequate on many fronts, exacerbated by population increases.Though regulations exist for the provision of public amenities like wastewater and sewerage treatment, existing facilities are run-down and ill-equipped to cope with the present demands.The capacity of reservoirs to meet the present demand for water is also strained because of the large population base, with illegal intrusion and squatters further threatening supplies.Economic and environmental imperatives can be reconciled if more emphasis and resources are put into enforcing regulations and protecting the environment.
Twenty-five years ago, the governments of Singapore, Malaysia, and Indonesia agreed to jointly promote the city-state, the state of Johor in Malaysia, and the Riau Islands in Indonesia. Facilitated by common cultural references, a more distant shared history, and complementary attributes, interactions between the three territories developed quickly. Logistics networks have proliferated and production chains link firms based in one location with affiliates or transport facilities in the other territories. These cross-border links have enabled all three locations to develop their economies and enjoy rising standards of living. Initially economic in nature, the interactions between Singapore, Johor, and the Riau Islands have multiplied and grown deeper. Today, people cross the borders to work, go to school, or avail of an increasing range of goods and services. New political, social, and cultural phenomena have developed. Policymakers in the various territories now need to reconcile economic imperatives and issues of identity and sovereignty. Enabled by their proximity and increasing opportunities, families have also begun to straddle borders, with resulting questions about citizenship and belonging. Using the Cross-Border Region framework - which seeks to analyse these three territories as one entity simultaneously divided and bound together by its borders - this book brings together scholars from a range of disciplines. Its 18 chapters and more than 20 maps examine the interaction between Singapore, Johor, and the Riau Islands over the past quarter-century, and seek to shed light on how these territories could develop in the future.
Asia has witnessed a proliferation of free trade agreements (FTAs) since the turn of the millennium. The first regional agreement - the ASEAN FTA - was transformed into the ASEAN Economic Community at the end of 2015. In the meantime, ASEAN forged five ASEAN+1 FTAs and began to negotiate a sixteen-member Regional Comprehensive Economic Partnership (RCEP) Agreement. In parallel, the U.S.-led Trans-Pacific Economic Partnership (TPP), supporting U.S. foreign policy of "Pivot to Asia," was broadly agreed in October 2015. The RCEP and the TPP are accompanied by other mega-regional integration processes developing elsewhere in the world, including the Transatlantic Trade and Investment Partnership for the European Union and the United States, and the Pacific Alliance among four Latin American member states. Meanwhile, APEC is also striving to meet its Bogor Goal targets and create a Free Trade Area of the Asia-Pacific.
Vietnam has officially admitted its failure to achieve industrialized economy status by 2020. This failure is partly due to its inability to grow a strong local manufacturing base and develop key strategic industries.The participation of Vingroup, the country's largest private conglomerate, in the automotive industry has sparked new hopes for Vietnam's industrialization drive. The company, through its subsidiary Vinfast, aims to become a leading automaker in Southeast Asia with an annual capacity of 500,000 units and a localization ratio of 60 per cent by 2025.Challenges that Vinfast faces include its unproven track record in the industry; the limited size of the national car market; the lack of infrastructure to support car usage in Vietnam; the intense competition from foreign brands; and its initial reliance on imported technologies and know-hows.However, Vinfast enjoys certain advantages in the domestic market, including the large potential of the Vietnamese automotive market; its freedom as a new automaker to define its business strategies without having to deal with legacy issues; Vingroup's sound business and financial performance and its ecosystem; strong support from the Vietnamese government; and nationalist sentiments that will encourage certain Vietnamese customers to choose its products.If Vinfast is successful, it will boost Vietnam's GDP growth and reinvent the country's automotive industry. Its success will also contribute significantly to the realization of Vietnam's industrialization ambitions and bring private actors into the centre stage of the economy. If the company fails, however, it will cause considerable problems for both Vingroup and the Vietnamese economy.