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investment.
2. Lee +Hong find that robust growth in East Asia mainly by capital
accumulation: labor input, edu, tfp : positive. To continue growing => rise
rate of factor accumulation + raise productivity.
3. The growth in East Asia can be explained by neoclassical growth model
=> role of human capital + tech catch up.
4. Sachs et al. (2001) find that East Asias rapid growth was due to its
(i)
large potential for catching up;
(ii)
favorable geography and structural characteristics;
(iii) demographic dividend
(iv) economic policies (openness) and strategy that were conducive to
growth.
TFP: factor contribute more to GDP in next 2 decades: VN, malay, korea,
indo, tha, Philip.
Capital stock: used to be major sources , marginal productivity of capital
declines => fall.
2. Selective Intervention:
o Promoting xport (highly selective interventions): shift from
strong bias against xport => pro-export incentive structure but
protect highly domestic market.
o Mild financial repression.
o Xport push trade policies:
HK, Malay, Sing: free trade + Japan, Korea, Taiwan: mixed
regimes => free for xport industries.
Xchange rate liberalized + currency devalued
Conclusion:
Rapid accumulation (human + physical capital):
o Developing human capital:
Initial low inequality of income + public spending focus on
primary => stimulate expansion.
Secondary, tertiary (science + tech education),
Female literacy: more workers, lower fertility rates.
o Creating effective and secure financial systems:
Banking policy => increase integrity + be accessible to
nontraditional savers => rise level financial savings.
Business-friendly environment: from tax policies favoring I
+ policies (avoid high tariff on imported capital goods) =>
keep capital goods price low.
Creating infrastructure complementary to private I.
Reduce moister
Wildfire: heat wave =>
o Flood: inundations of land surface.
Vietnam: change in climate => annual flood Mekong river
delta occurs more often => causing low yield and low crop
=> loss of food stocks + crops in the fields. To the poor, it
represent for a large proportion loss of their assets.
Flood in Chao Phraya Rier basin 4 months of ravaging cost
72mil bath => take away opp of farmers to benefit from
farming rice rise.
Element of food security:
Food availability: sufficient Q of food through import and domestic + food
aid.
Food access: access by individuals to adequate resoirces. Acquiring
appropriate foods for nutritious diet.
Utilization: through adequate diet, clean water, sanitation, healthcare =>
reach nutrition demand.
Stability: can access food anytime. Economic and climatic crises,
agricultural season => need Stability.
Problem of Food Security:
1. Food prices rice (rice, wheat, corn are main food energy of poors diet) =>
limit poor production progress + rise inequality.
2. Affect Economic downturn => affect the poors income => loss
employment + affordability to staple foods => rise recognition about
agricultures vulnerability to climate change ( drought, floods,) => longrun efforts to ensure food security for national + household levels.
3. Food price increase:
a. Demand > Supply, stock depleted=> higher price level early 2ks.
b. High volatility of food prices in 2k9 and II-I2.
Cause of food price change:
Supply side: severe water shortage affect soil erosion, water scarcity,
urban encroachment => agricultural land base.
o Climate change (drought, aridity increasing in South + central Asia.
o Land + crop => biofuels use in US, EU.
o Productivity affect by crop diseases, climate change.
o High price of petroleum => higher input prices => high cost.
Demand side:
KEY CHALLENGES:
1. Refresh agricultural productivity growth in order to feed Asias ever more
urban and
Prosperous population, a challenge that is enlarged by the simultaneous need to
adapt to climate changes and, ideally, creates a more carbon-neutral
agriculture;
2. Ensuring that small, resource-poor farmers have the opportunity to
compete and thrive in modern food value chains; and
3. Tackling Asias persistent malnutrition in a sustainable, financially efficient
manner
Industrialization
Factory Asia: model of regional production networks connecting factories in #
Asian economies, produce parts and components that are then assembled, with
final product shipped largely to advanced economies.
The rise of Asian manufacturing: evident in the increased shared of valueadded in global manufacturing.
Weak economic prospects + labor factor cost rising => erode price
advantages.
Asia focus mainly on global tech/innovators + labor intensive tradable.
Korea: from large trade surplus of labor intensive tradable => deficit
cause higher wage make it Labor Intensive Tradable competitive =>more tech
advanced product => trade surplus in global innovation for locals in automobile
manufacturing => sustain.
Factory Asias rise in Japanese manufacturing: in 2k, trade surplus in
global technologies + innovation. Electronics migrates a lot => trade surplus
drop => machinery + automobile manufacturing becomes larger surplus for
Global innovation for locals.
Todaro + smith (20II): structural change theory focus on mechanism by
which underdeveloped economies transform their economic structure from
heavy emphasis on traditional subsistence agri => modern and urbanized
industrially diverse manufacturing and service economy.
Factory Asia will be dominant driver of growth if its adapts to trends and
transforms itself.
TREND AND ISSUE:
Changing global economic landscape + evolving consumer taste =>
affect D for factory Asias product.
1. economic prospects after global financial crisis:
a. slow recovery + weak after financial crisis, high fiscal/deficits.
b. Aging population => lower demand on manufacturing, higher in
medical + health serv.
c. Falling trade barriers (cheaper transportation cost, capital mobility
improvement, efficient communication)
=> advanced economies shift to emerging economies.
Policy Recommendation: support domestic Demand, forge effective
regional + south-south cooperation, multilateral zingfree trade, smart
incentives for targeting regional markets.
2. Asias Expanding middle class => Factory Asia must cater their demand:
CHAP 6:
Sustainable development suggests that the crux of the matter is how to
describe value so that it does not underestimate futures interests and utilities;
future is given an equal treatment.
Green economics is
about provisioning for the needs of all people and nature as beneficiaries of
sustainable economic transactions, but not as throw away inputs.
Covers all aspects of sustainability: poverty, environmental degradation,
green accounting, green GDP, business ethics and governance, green
jobs, green generations, the underprivileged and special children, social
justice and equity, climate change, gender inequality and women
empowerment, mass consumption, biodiversity, and many more.
improved human well-being and social equity, while significantly reducing
environmental risks and ecological scarcities.
Inagreeneconomy,growthinincomeandemploymentshouldbedrivenbypublicandprivateinvestmentsthat
reducecarbonemissionsandpollution,enhanceenergyandresourceefficiency,andpreventthelossof
biodiversityandecosystemservices.
MalaysiaproductivityinagriculturedeclinevGHG+Co2uncontrolled=>warmer.
Adaptation projects such like dam construction, monitoring weather extremes, developing disaster
preparation strategies and communal capacities buildings
Malaysiashasplansfortheclimatechangeprogrammesfor20082012
(i)
improvingdatamanagementsystemofgreenhousegasemissionsandozonedepletingsubstance
consumption
(ii)
(ii)removalofbarriersforincreasedenergyefficiencyandrenewableenergyinitiativesimplementation
targetingatincreasedrenewableenergymappingandphysicalcapacity,establishinganinstitutional
frameworkforimplementingbuildingenergyefficiencyandidentificationofenergyefficiencypotentialin
thetransportationsector,and
(iii)
(iii)extensionofruralelectrificationutilizingrenewableenergysourcestargetingatestablishingapolicy
frameworkforruralelectrificationonrenewableenergy
Reality
It has been known that in short term, growth was always being highly favour
compare to environment. Governments, factories, organization look for short
term, reality profit. Thus discussing environment problem is on scale of longterm.
Asia has troubles in these sections:
- Freswater resources: water is being polluted, especially in high
population city.
- Air quality: emerging air pollution and green houses gases problem.
Land and forests: Degradation and deforestation.
o Asia used to have lots of virgin forest
o Now only around 4 percent.
Chung and Quah (2010): raised 3 problems that threaten green growth in Asia:
- 1. The problem of sitting environmentally unfriendly facilities (NIMBY) and
NIAB syndrome
o Example: factories that burn rubbish, waste processor, nuclear
factory.
o In short, facilities that people do not want them in their backyard.
-
Role of environment
-
Enforceable.
The ideas of effective property rights are ideal, far from reality. The limitation for
environmental goods can be understood as this:
- Who owns the fish in open seas?
- Environmental goods like public goods, often indivisible, non exclusive,
even invisible.
Economic incentives
o For example: permit to release waste
o Carbon credit you can sell your carbon credit if you release under
allow limitation.
Tenure reform