Trade diversion in an ASEAN Free Trade Area

Article Abstract:

Philippines experiences the highest trade diversion rates among ASEAN nations, accounting for 10% of its 1990 exports to other ASEAN countries. Singapore follows at 8%, Thailand at 6%, Malaysia at 5% and Indonesia at 3%. In the short term, if trade creation is included, Indonesia and Thailand will have net gain in welfare, and there will be a net loss for Malaysia and Singapore. In the long term, the positive dynamic impacts of enhanced competition, economies of scale and the benefits of intra-industry trade dominate the short term effects. The study probes the trade diversion effect.

Foreign trade zones

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Malaysia's bond market: the further reforms required to escape underdevelopment

Article Abstract:

The secondary market in Malaysian Government Securities (MGS) requires certain reforms to combat underdevelopment and create an active and liquid corporate bond market. The major reforms of the 1980s failed in this endeavor due to shortage of MGS and lack of institutional borrowing. Development of cash and futures markets can ensure the active participation of investors in trading on interest rates, and on spread in yields between the cash and futures markets. The reforms will allow borrowing of securities against the collateral of cash under a global securities lending agreement.

Reports, Supply and demand, Malaysia, Securities, Government securities, Economic stagnation

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The ASEAN financial sector: a drag or a leader?

Article Abstract:

There is a need for ASEAN countries to aggressively work towards the development of their offshore financial centers on a competitive basis. Investment flows and inflation pressures should be handled properly. Domestic financial markets should be deregulated. Financial sectors of all Southeast Asian countries with the exception of Singapore suffer from overregulation and overprotection of their financial sectors, which has resulted in financial institutions' dependence on the less regulated and more competitive goods-producing sector.

Analysis, Financial markets, Financial institutions, Southeast Asia

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