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BORNEO
REVIEW - VOLUME XIII NO. 2 (DEC. 2002)
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TESTING TWIN DEFICITS
CAUSAL LINKAGES: AN EMPIRICAL INQUIRY FROM MALAYSIA
Evan Lau and Hock-Ann
Lee
Abstract
The
quantitative analysis in this paper contributes to the on-going debates
surrounding the issue of twin deficits in Malaysia. The empirical evidence based on the
nonstationarity time-series econometrics analysis leads to the following
conclusions: (i) Using the basic modeling strategy,
cointegration is absence while the existence of cointegration is found in
four-dimensional system; (ii) A bi-directional causality between the two
deficits is found using two-dimensional system; (iii) Two major channels exist
from the four-dimensional system. The
first is the direct channel from budget deficit to current account
deficit. Second is the indirect channel
which runs from budget deficit to higher interest rate, and higher interest
rates lead to appreciation of the currency and this in turn worsens the current
account deficit; and (iv) The continuity process between these variables is in
accordance with the vicious circle pnenomenon existed. Export promotion, exchange rate targeting,
monetary and productivity enhancement complemented with the budget cut policy
would be appropriate policy options.
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CHINA’S ACCESSION INTO THE
WTO: TRADE CONSEQUENCES FOR MALAYSIA
Shankaran Nambiar
Abstract
The
purpose of this paper is to examine how trade relations between China
and Malaysia
are likely to change subsequent to China’s
accession into the World Trade Organisation (WTO). China’s
entry into the WTO carries with it certain commitments. These commitments will result in a range of
changes that will affect tariff rates, employment patterns and the output from
various sectors and industries. It is
against the background of these changes that Malaysia’s
trade with China
will be affected. This paper argues that
the existing pattern of trade will alter depending on the competitiveness of
both countries. China’s
entry into the WTO will result in an expansion in certain sectors and a
contraction in others. Another important
variable that will determine the emerging pattern of trade will be whether the
production process is capital or labour intensive. It will be argued that China’s
entry will threaten some sectors in Malaysia
and provide opportunities in others, thus changing the pattern of trade in
subsequent years.
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ECONOMIC RELATIONS
BETWEEN MALAYSIA AND JAPAN: INVESTMENT, TRADE AND ECONOMIC ASSISTANCE
Fumitaka Furuoka
Abstract
This
paper offers and overview of Malaysia-Japan relations since the time Malaysia
gained independence in 1957. The
relations between the two countries have been often described as – and indeed
have been – “close and friendly”. Japan
has been Malaysia’s
main trade partner as well as a major provider of foreign direct investment and
economic assistance. This special
relation received further impetus when the “Look East” policy was introduced in
Malaysia in
the beginning of the 1980s. This
research paper uses a simple econometric model to analyse the determinants of
Japanese direct investment (JDI). The
findings indicate that there is no significant relation between inflows of JDI
and economic condition of the recipient country – Malaysia.
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GLOBALISATION: CHALLENGES FOR THE INDIGENOUS COMMUNITY IN SABAH
Bilson Kurus
Abstract
Globalisation
is often seen as a “two-edged” sword, bringing with it both positive as well as
negative impacts. At the same time,
these factors are far from evenly distributed among the affected parties. In this respect, two tentative observations
can be made on the likely impacts of globalization on the indigenous community
in Sabah. First, the capacity of the indigenous peoples
to deal with the process of globalization will likely continue to differ. Second, the impacts of globalization on the
indigenous community will also likely continue to vary. Unless these issues are effectively dealt
with, they may ultimately further widen existing gaps between communities as
well as within a given community.
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ADDRESSING THE
CHALLENGES OF URBAN GROWTH IN THE ERA OF GLOBALIZATION
Junaenah Sulehan and
Abdul Hadi Harman Shah
Abstract
This
paper uses the operational definition of the urban growth concept within the
context of a simple understanding of population concentration, as demarcation
of an urban area changes considerably over time. Urban growth is directly related to
demographic changes, i.e. the agglomeration of population in a specific spatial
area (eg. Urban centers), accompanied by the acceleration of industrial and
service sectors development at a much higher scale compared to other
surrounding settlement areas. However,
these demographics are not merely numbers for planning standards. Rather they represent changing needs and
contexts within which urban growth should be considered and the development
results evaluated.
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