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Asean

Rebuilding Nepal requires a long-term vision

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Author: Sujeev Shakya, Nepal Economic Forum

It only lasted for 20 seconds, but the magnitude 7.8 earthquake that rocked Nepal at midday on 25 April 2015 has impacted the country on an unprecedented scale. More than 8000 Nepalese were killed. Twice as many were injured. Many people have been left homeless after their houses were destroyed. Others, scared of aftershocks, now sleep under the open sky.

Just over two weeks later, on Tuesday 11 May, another 7.4 magnitude earthquake hit the country. The casualty list continues to grow.

Nepalese earthquake survivors build a makeshift shelter at a devastated area in Bungamati, Nepal, 14 May 2015.  (Photo: AAP)

Although the initial quake also hit the capital city of Kathmandu, the worst affected areas are in the adjoining districts — some so remote that it took a week for the first batch of relief materials to arrive. In the capital, the heritage sites of centuries old temples and palaces were razed to the ground and many houses — both old and new — collapsed. Pictures of cracked high-rise apartment buildings, the icons of Nepal’s economic progress, flooded social media. Many people believe that the impact would have been a lot more devastating had the earthquake not taken place on a Saturday, when offices and schools were closed.

While the response from the army, police and Nepal’s friendly neighbours were immediate, key government officials, political parties and political civil society have still found responding difficult, and efforts were often made by individuals rather than Nepalese society. The Prime Minister of Bhutan Tshering Tobgay personally delivered a check of US$1 million and a team of 68 people, comprising of doctors and paramedics. Air traffic controllers worked overtime and managed 450 flights on a single day at Tribhuvan, Nepal’s only international airport.

Many arms of the government worked well. The state-owned Nepal Telecom provided free text and phone calls as more international service providers like Skype and Viber joined in to make calls to Nepal free. The electricity grid was restored quickly and some key officials in the government worked non-stop co-ordinating relief work.

But the major political parties were completely absent from the scene. These parties, who boast of raising of hundreds of volunteers at political rallies and enforcing nationwide strikes, could not garner the support needed to deliver relief to the very people who voted them into power. The absence of a national mechanism amongst the coalition government hampered co-ordination and impacted relief efforts. It took the government a week to clarify its position on whether NGOs could receive charity money and goods for relief or be given customs waivers. This lack of clear-cut directives and strategic thinking comes at the cost of forgone donations.

Initial relief efforts were conducted by volunteers who spontaneously gathered to start delivering tents, food and medicines to affected people. These groups were organised through social media to meet demand and supply. They delivered relief at zero cost, paying for their own food, water and fuel.

The political impasse in Nepal — which is blocking progress on finalising a replacement for the interim constitution in the second Constituent Assembly — does not provide the right backdrop for managing such a disaster. The credibility of the prime minister’s relief fund is continuously questioned. International donors prefer to work through international agencies rather than give cash to the government. The absence of local governments for the past 14 years in the villages and towns has resulted in powerful political syndicates known as All Party Mechanism (APM). These APMs disburse money to party workers in a system that is ridden with corruption. Relief efforts being caught up in the political and bureaucratic system continue to be reported by the media.

As people get back to their lives, the challenge now is how to sustain relief and move to the phase of rehabilitation and reconstruction. Some global organisations are already here and it is important to be cautious that they do not convert this disaster into extended international engagement in Nepal. Resurrecting Nepal will require a long-term vision, but this is unlikely to come from the weak coalition government. India and China have shown keen interest in the redevelopment efforts, but the challenge is how they are seen coordinating efforts rather than competing with each other in helping Nepal.

Even before the earthquake, Nepal required a serious long-term view, especially towards infrastructure development. In preliminary findings, the National Planning Commission has estimated that about US$120–150 billion is required to build the infrastructure needed for Nepal to become a middle income country by 2030. The earthquake has been a setback, but hopefully it provides an opportunity to think of a long-term vision.

Sujeev Shakya is Chair of Nepal Economic Forum, a private sector-led economic thought centre.

 

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Rebuilding Nepal requires a long-term vision

Asean

ASEAN weathering the COVID-19 typhoon

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Vietnam's Prime Minister Nguyen Xuan Phuc addresses a special video conference with leaders of the Association of Southeast Asian Nations (ASEAN), on the coronavirus disease (COVID-19), in Hanoi 14 April, 2020 (Photo:Reuters/Manan Vatsyayana).

Author: Sandra Seno-Alday, Sydney University

The roughly 20 typhoons that hit Southeast Asia each year pale in comparison to the impact on the region of COVID-19 — a storm of a very different sort striking not just Southeast Asia but the world.

 

Just how badly is the COVID-19 typhoon thrashing the region? And what might the post-crisis recovery and reconstruction look like? To answer these questions, it is necessary to investigate the strengths and vulnerabilities of Southeast Asia’s pre-COVID-19 economic infrastructure.

Understanding the structure of the region’s economic house requires going back to 1967, when Southeast Asian countries decided to pledge friendship to one another under the ASEAN framework. While other integrated regions such as NAFTA and the European Union have aggressively broken down trade barriers and significantly boosted intra-regional trade, ASEAN regional economic integration has chugged along slower.

Southeast Asian countries have not viewed trade between each other as a top priority. The trade agreements in the region have been forged around suggestions for ASEAN countries to lower tariffs on intra-regional trade to within a certain range and across limited industries. This has lowered but not eliminated barriers to intra-regional trade. Consequently, a relatively significant share of Southeast Asian trade is with countries outside the region. This active extra-regional engagement has resulted in ASEAN countries’ successful integration into global value chain networks.

A historically outward-facing region, in 2010 around 75 per cent of Southeast Asian commodity imports and exports came from countries outside of ASEAN. This share of extra-regional trade nudged closer to 80 per cent in 2018. This indicates that ASEAN’s global value chain network embeddedness has deepened over time.

Around 40 per cent of ASEAN’s extra-regional trade is with the rest of Asia. From 2010 to 2018 Southeast Asian countries forged major trade relationships with four Asian countries: China, Japan, South Korea and India. Outside Asia, the United States is the region’s major trading partner. ASEAN’s trade focus on Asia’s largest markets is not surprising. Countries tend to establish trade relationships with large, geographically close, and culturally similar markets.

Fostering deep relationships with a few large markets, however, is a double-edged sword. While it has allowed ASEAN to benefit from integration in global value chains, it has also resulted in increased vulnerability to the shocks affecting its network connections.

ASEAN’s participation in global value chains has allowed it to transition from a net regional importer in 1990 to a net regional exporter in 2018. But the region’s deep embeddedness in a small and tightly-coupled network cluster of extra-regional global value chain partners has exposed it to disruption to any and all of its external partners. By contrast, ASEAN’s intra-regional trade network structure is much more loosely-coupled: a consequence of persistent intra-regional trade barriers and thus lower intra-regional trade intensity.

In the pre-COVID-19 period, ASEAN built for itself an economic house held up by just five extra-regional markets, while doing less to expand and diversify its intra-regional trade network. The data shows that ASEAN trade became increasingly concentrated in these few external markets between 2010 and 2018.

This dependence on a handful of markets does not bode well for risk and crisis management. All of the region’s major trading partners have been significantly affected by COVID-19 and this in turn is blowing the ASEAN economic house down.

What are the ways forward? The immediate task at hand is to get a better picture of the region’s position in global value chain networks and to get on top of managing its network risk exposure. Already there are red flags around the region’s food security arising from its position in food value chains. It is critical to look for ways to introduce flexibility into existing supply chains for greater agility in responding to crises.

It is also an opportune time for ASEAN to harness the technology transfer gains of global value chain participation and invest in innovation-driven diversification of products and markets. The region’s embeddedness in global value chain networks certainly places it in a strong position to readily access large export markets not just in Asia but also Europe and the Americas.

Over the longer term, ASEAN is faced with the question of whether it should seriously look…

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Markets

Tiger Trade Launches SGX Trading, Meeting Demand from Asian Investors

Access to the Singapore Exchange (SGX) adds to Tiger Brokers’ current menu of stock exchanges, such as the New York Stock Exchange (NYSE) and the Nasdaq Stock Market (NASDAQ), the world’s two largest stock exchanges, as well as the Hong Kong Stock Exchange (HKEX).

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SINGAPORE (ACN Newswire) – Tiger Trade, a one-stop mobile and online trading application by Tiger Brokers, has launched access to the Singapore Exchange (SGX).

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Asean

Can Asia maintain growth with an ever ageing population ?

To boost productivity in the future, Asian governments will have to implement well-targeted structural reforms today.

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Asia has been the world champion of economic growth for decades, and this year will be no exception. According to the latest International Monetary Fund Regional Economic Outlook(REO), the Asia-Pacific region’s GDP is projected to increase by 5.5% in 2017 and 5.4% in 2018. (more…)

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