Educational Reforms & Challenges in Southeast Asia

Southeast Asia’s traditional export of relatively low-skilled products is facing increased competition. There is therefore a general need to upgrade production in the region, which requires a more skilled and educated labour force. Historically, education has not been emphasized in Southeast Asia but there are indications that this is about to change. This paper starts with a general discussion on the educational situation and changes in the region. It continues with a close look at three ASEAN countries – Indonesia, Malaysia, and Singapore – with special focus on some of the obstacles for reforms, such as financial and political constraints, that are present in these countries.Education; Southeast Asia; Structural Change; Economic Crisis

Economic Recovery in Indonesia: The Challenge of Combining FDI and Regional Development

Indonesia has been severely hurt by the recent economic crisis, which has been accompanied by social tensions. Still, there are reasons to be optimistic about Indonesia's future. The economic crisis may have bottomed out and the difficult transition to democracy has started. For a sustainable long-term recovery, it is essential that Indonesia is able to attract FDI inflows, and manages to achieve a reasonably equal spatial development of growth. Unfortunately, there is a possible contradiction between FDI and even regional development since FDI tends to locate in concentrated clusters. This paper discusses some requirements for a long-term recovery of Indonesia, which special focus on FDI and an even spatial development.Indonesia; Economic Growth; Foreign Direct Investment; Regional Development

WHO DO YOU TRUST? ETHNICITY AND TRUST IN BOSNIA AND HERZEGOVINA

Bosnia and Herzegovina has experienced a turbulent post-independence transition. It can be argued that the level of trust is likely to have been negatively affected by this turbulence and that it is important to restore trust to achieve sustainable political and economic development. This paper looks at trust in Bosnia and Herzegovina and puts a special focus on the role of ethnicity. We find generalized trust to be low in Bosnia and Herzegovina and it seems to have declined in recent years. Moreover, generalized trust is negatively affected by the degree of ethnic heterogeneity in the region. However, a further and more detailed examination of trust reveals a more complex relationship between ethnicity and trust: people tend to show low levels of trust in all other people irrespective of their ethnic belongings. We argue that ethnic distribution might capture some other regional specific characteristics that also affect the level of trust. One possibility is that ethnically heterogeneous regions tended to be severely affected by the war and that this has negatively affected the level of trust towards all people outside of a person’s family.Trust; Social Capital; Ethnicity; Southeast Europe; Bosnia and Herzegovina

POPULATION GROWTH AND JOB CREATION IN TIMOR-LESTE

Timor-Leste began its independence as one of the poorest nations in the world. Substantial progress has been made thereafter but the challenges for future development are numerous. High population growth and modest growth of GDP means that per capita income is declining and that the extent of poverty is increasing. For this situation to change, income opportunities other than those provided by subsistence agriculture are needed. Considering the low level of education and the keen competition for skilled personnel this, however, is difficult. So far, it seems that most skilled workers are being absorbed by the public sector and that this is pushing up the already high skilled wage level. That, in turn, affects the competitiveness of the private sector negatively and acts as an obstacle to the creation of employment opportunities outside agriculture.Timor-Leste; Job Creation; Development; Industry

HOST COUNTRY IMPACTS OF INWARD FDI: WHY SUCH DIFFERENT ANSWERS?

A substantial literature has grown up around the issue of how inward direct investment affects host countries. On almost every aspect of this question, there seems to be a wide range of empirical results in academic literature, and little sign of convergence. It is our purpose here to try to understand why contradictory results seem to be found by different investigators. Is it that the statistical techniques are different? Or are the countries they examine different? Or are they asking different questions under the same labels of wages, productivity, or spillovers? We try to answer these questions in two ways. One is to review the individual studies themselves to clarify the questions asked and the data used. The other is to survey studies on data for Indonesia, which cover a long period and are detailed and accessible, to test the implications of different definitions and methods.FDI; Wages; Productivity; Spillovers

THE OIL RESOURCES OF TIMOR-LESTE: CURSE OR BLESSING?

Timor-Leste is among the youngest nations in the world. It started its independence under difficult circumstances: poverty is widespread, education is poor, the industrial sector is non-existent, and political turbulence is on the rise. On the positive side, future oil revenues are predicted to be substantial, which could potentially be of large help in Timor-Leste’s strive for development. This paper examines critically the possibility for Timor-Leste to use oil revenues to achieve economic development. It describes how difficult it is to estimate the future revenues because of volatile prices, territorial disputes, and insufficient seismological mapping. It continues with a discussion of the “resource curse”: the difficulty of combining natural resources with economic development. Moreover, the particular challenges for Timor Leste’s development are dealt with at some length, as are possible ways to avoid the resource curse.Timor-Leste; Oil; Resource Curse; Economic Development