A Review of the Strength of Trade Polices in Emerging Economies towards their Goals of Sustainable Economic Development

Purpose: The study aims to offer a review of trade policies and Export Processing Zones (EPZs) policies and their outcomes in developing economies. The EPZs are presented as a trade policy tool by using which the developing economies trying to pursue export-led growth policy can also achieve the goals of sustainable economic development. Design/Methodology/Approach: The study has followed qualitative research design using literature review logical and qualitative text analysis to critically summarize the trade theories, policies and growth theories specially the EPZs based trade policy in developing countries. Finding: The study has revealed that the developing countries are enhancing their economic growth and expanding their economic sectors through international trade. The mercantilist trade policies under infant industry argument or others have not been much successful in spurring long term growth. EPZs are identified as a strategic trade policy tool by which developing countries can achieve economic growth and sustainable development goals (SDGs). Implications/Originality/Value: It is concluded that the infant-industry idea has not helped developing countries regarding economic growth and development. The findings presented herein are useful for political leaders and economic managers in developing countries aspiring to achieve economic growth and SDGs.

Diverse Tools of Industrial Policy in Korea

The chapter presents a Schumpeterian and capability-based view of industrial policy, reflecting upon its practices in Korea over the last several decades. Given that it is typical for many developing countries to suffer from capability failure, industrial policy should go beyond correcting market failure and aim at overcoming capability failure. It is not about picking winners but about picking good students and allowing them time to learn and build capabilities until they are able to compete with incumbent firms from developed countries. This chapter discusses specific industrial policy tools practised in Korea at different stages of its development: tariffs to protect infant industry; technology import licensing to promote building of absorptive capacity; entry control guaranteeing rents for fixed and R&D investment; and public‒private joint R&D to break into higher-end products and sectors. While these tools look different in their concrete contents, they all allow some rents for the targeted sectors, which can be used to pay for building production capabilities in the case of tariffs or technology licensing in the 1970s, investment capabilities in entry control in the 1980s, and technological (R&D) capabilities in the case of public‒private joint R&D in the 1990s.

Dampak Kebijakan Bea Masuk Tindakan Pengamanan terhadap Proteksi dan Daya Saing Produk Baja Lapis Aluminium Seng

Safeguard measures is a trade remedies policies regulated by World Trade Organization (WTO) to recover loss (injury) suffered by domestic industries as a result of liberalization in international trade, as an instrument to protect and increase competitiveness of domestic industries which are still at infant industry stage. In Indonssia, the steel industry sector is designated as a national priority so that its growth must be maintained. Meanwhile, the import surge phenomenon of flat-rolled products from iron or non-alloy steel has threatened the existence of domestic steel industries which produce similar commodities. The Indonesian government responded by setting the Safeguard Measures policy, with the hope that the industry would make structural adjustments during the imposition period so that its competitiveness could be increased. This study uses monthly import data from January 2012 to December 2018 to determine whether the Safeguard Measures has been effective as a protection instrument. To measure competitiveness, Revealed Comparative Advantage (RCA) method and Trade Specialization Index (TSI) were used. The results of this study show that the policy reduced the import of the same and similar steel products which meant it is effective as an instrument of protection. In addition, there has been an increase in competitiveness even though Indonesia is still a net importer.

CPEC: Threat or Opportunity Protecting Local Industry through Infant Industry Theory Framework

China-Pakistan Economic Corridor is a massive investment initiative by China with a whopping amount of $62 billion. The project includes various short term and long term plans for energy, infrastructure, IT and R&D projects. The completion of short term plans by the end of 2018 and initiation of long term projects demand a comprehensive analysis as the project of CPEC presents both threat and opportunities for local producers. The threats include competition for local producers from innovative products of China and technological and managerial superiority of Chinese companies over Pakistani industry. However, the domestic producers feel more optimist as energy and infrastructure projects, and induction of new technology would benefit the business sector in Pakistan. The purpose of this study is to explore and identify the possible threats and opportunities considering “Infant Industry Theory” as an analytical framework. A qualitative and quantitative research methodology is employed and the data is gathered from 20 divergent and potential sector of SMEs through a close ended survey questionnaire. The likert scale is used to evaluate the opinions of respondents for awareness, challenges; and threats and opportunities of CPEC. The results revealed that SMEs owners are now more aware about the CPEC and its related details while the major challenges for producers were to cope with the low access to finance, unavailability of business and legal advisory services and difficulties in market access. Moreover, the majority of selected respondents consider the project of CPE as an opportunity for their businesses, industry and economy of Pakistan. It is thus concluded that business sector in Pakistan is preparing for CPEC, but with the fact that the required results are not possible till the challenges and concerns of local producers are addressed by the government in appropriate way through effective policies and efficient management. Hence, a detailed policy plan for the local industry specifying CPEC is highly recommended.

FAKTOR PENGHAMBAT DIPLOMASI CPO INDONESIA DI PASAR EROPA

Indonesia merupakan negara penghasil kelapa sawit terbesar di dunia. Selama puluhan tahun Indonesia memasok CPO ke pasar internasional termasuk Uni Eropa sebagai bahan baku industry pangan, kosmetik, obat-obatan, dan lain-lain. Namun sejak 2015 ekspor CPO Indonesia mengalami hambatan nontariff yaitu isu deforestasi, kebijakan labelling “palm oil free”, isu kesehatan, dan lain-lain. Penelitian ini menggunakan pendekatan kualitatif, metode deskriptif, dan data sekunder dari sumber ilmiah berupa jurnal, dokumen, laporan, publikasi media massa beberapa tahun terakhir, dan rilis website resmi. Hasil penelitian menunjukkan bahwa faktor penghambat diplomasi CPO Indonesia ke pasar Eropa dibagi dalam dua penyebab yaitu faktor internal berupa sertifikasi lahan sawit (ISPO) yang tidak diakui oleh Eropa, kegagalan pemerintah me-lobby APEC untuk memasukkan perkebunan sawit dalam kategori hutan, dan kurangnya sinergi lintas instansi untuk satu suara menghasilkan strategi nasional. Sedangkan hambatan eksternal berupa kebijakan proteksionisme terhadap infant industry, label non environmental goods yang mengandung CPO pada produk makanan yang beredar di Eropa, promosi Renewable Energy Directive (RED) kepada semua negara Uni Eropa untuk segera memberlakukan kebijakan tersebut, paradoks Kebijakan UE yang mengangkat isu lingkungan tetapi upayanya memperluas perkebunan minyak nabati local dengan menggusur lahan pertanian lainnya dan tidak mampu menyerap gas emisi karbon karena hanya jenis tanaman pendek yang penyerapan tidak lebih maksimal dari tanaman kelapa sawit, dan terakhir adalah joint campaign negara produsen CPO. Kata kunci: CPO, diplomasi, hambatan nontarif, Uni Eropa

Resource Allocation to Upgrade the Economic Structure: Experience from South Korea's Industrial Policy

“Climb up” the global division of labour ladder or upgrading the economic structure is a very hard job, requiring a smart industrial policy with the capability of choosing key sectors suitably and having appropriate and effective policy to allocate resources to these sectors. When climbing up, some countries may skip several levels with the support of appropriate industrial policy, but they can slip if they try to jump too many steps at once with the rush of industrialization. Based on an analysis of the academic perspectives related to industrial policy and evidences from the sector selection process as well as the mechanism for allocating resources for the development of key South Korean industries, the paper will draw some important lessons for developing countries, including Vietnam, in order to bridge the gap with leading nations. Keywords Resource allocation, industrial policy, South Korea References [1] Lin, J.Y., 2012. New structural economics: A framework for rethinking development and policy. The World Bank.[2] Kuznets, S, Murphy, J. T. 1966. Modern economic growth: Rate, structure, and spread, Yale University Press New Haven.[3] Mah, J. S. 2007. Industrial policy and economic development: Korea’s experience. Journal of Economic issues, 41, 77-92.[4] Njue, N. 2010. The Role of the Government in Resource Allocation: Korea vs. Kenya. Master, KDI School of Public Policy and Management.[5] Stiglitz, J. E., Lin, J. Y., Monga, C. 2013. Introduction: the rejuvenation of industrial policy. The Industrial Policy Revolution I. Springer.[6] Lin, J. Y., Monga, C. 2014. The evolving paradigms of structural change. International Development: Ideas, Experience, and Prospects.[7] Winters, L. A., Lim, W., Hanmer, L., Augustin, S. 2010. Economic growth in low income countries: How the G20 can help to raise and sustain it. University of Sussex, Brighton.[8] Ohno, K. 2009. Avoiding the middle-income trap: renovating industrial policy formulation in Vietnam. ASEAN Economic Bulletin, 26, 25-43.[9] Lin, Y. J. 2013. The industrial policy revolution I: The role of government beyond ideology, Springer.[10] Baldwin, R. E. 1969. The case against infant-industry tariff protection. Journal of political economy, 77, 295-305.[11] Saure, P. 2007. Revisiting the infant industry argument. Journal of Development Economics, 84, 104-117.[12] Westphal, L. E. 1990. Industrial policy in an export propelled economy: lessons from South Korea's experience. The Journal of Economic Perspectives, 4, 41-59.[13] IMF DataMapper, 2018. GDP per capita, current prices, [Online], Available at: https://www.imf.org/external/datamapper/NGDPDPC@WEO/ADVEC/WEOWORLD/KOR; Accessed 21/11/2018. [14] AHN, S. 2013. Evolution of Industrial Policy and Green Growth in Korea. World Trade Organization. March, 12.[15] Cooper, R. 1970. Fiscal policy in Korea. Macroeconomic policy and adjustment in Korea, 1990, 111-144.