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Effects of ASEAN Transport Connectivity Enhancement

Smith, Michael, Gunasekera, Don, Wimalasuriya, Rukman, Newth, David and Voak, Adam 2019, Effects of ASEAN Transport Connectivity Enhancement, Australasian Agribusiness Review, vol. 27, pp. 149-176.

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Title Effects of ASEAN Transport Connectivity Enhancement
Author(s) Smith, Michael
Gunasekera, DonORCID iD for Gunasekera, Don orcid.org/0000-0003-4515-492X
Wimalasuriya, Rukman
Newth, David
Voak, Adam
Journal name Australasian Agribusiness Review
Volume number 27
Article ID 7
Start page 149
End page 176
Total pages 28
Publisher University of New England
Place of publication Armidale, NSW
Publication date 2019
ISSN 1833-5675
Keyword(s) ASEAN
transportation
productivity gains
economy-wide modelling
Summary There is a recognition that trade costs along domestic and international supply chains can be significantly reduced by improving the logistics performance in each mode of transport involved in various chain transactions. These improvements may be conveniently facilitated by the optimisation of the transitioning strategies from unimodal to multimodal (or combined) transport services. In this context, we examine here the status of current multimodal connectivity in freight transport practiced in the ASEAN region. We have focussed on the potential economic impacts of enhancing the levels of supply chain multimodal connectivity on the emerging economies of this region.

Our methodology has two stages. First, we estimated a ‘multimodal transport index’ for ASEAN economies, using available data on performance indicators for maritime, air and land transport, combined with indicators of current logistics competence. Second, the Global Trade Analysis Project (GTAP) economy-wide model is used to estimate the economic impacts of ongoing transport connectivity enhancements in the ASEAN region, focussing on the emerging ASEAN members such as Cambodia, the Lao PDR, Myanmar and Viet Nam. It is important to note in this respect that the 10 ASEAN member economies are heterogeneous in nature in terms of economic growth and development. There are, for example, the more advanced economies such as Singapore and Malaysia, which contrast with the four emerging economies in the region.

Our analysis of logistics performance in the ASEAN economies shows that (i) Singapore leads in performance indicators related to maritime transport, road density and logistics, (ii) Indonesia leads in primary airports and secondary airports, while (iii) Viet Nam has recorded the highest score in rail density. In addition, with respect to the performance indicators for maritime, primary airports, secondary airports and road density, there is a wide gap between the regional leader and most of the other ASEAN member economies, whilst our analysis of the logistics competence indicator shows moderately good performance in all of the ASEAN economies.

Of particular interest to this investigation, is our analysis of the estimated multimodal transport index which indicates that, although Singapore appears to be leading in overall multimodal transport performance, Indonesia’s economy has drawn almost level. Their performance is followed closely by Thailand, Viet Nam and Malaysia. The Philippines and Myanmar have modest, and similar levels of multimodal transport performance, whilst at the other end of the spectrum, the Lao PDR, Cambodia and Brunei have relatively low levels of multimodal transport performance.

The economy-wide analysis shows that all else being equal, a 1.0 per cent improvement in factor productivity of the transport services in ASEAN will likely raise the real GDP in Cambodia, the Lao PDR, Myanmar and Viet Nam by 0.26, 0.15, 0.12 and 0.09 per cent respectively. Furthermore, it is estimated that a 1.0 per cent improvement in factor productivity of the transport services will increase consumer welfare in Cambodia, the Lao PDR, Myanmar and Viet Nam by US$ 28.9 million, US$ 11.7 million, US$ 73.5 million, and US$ 168.6 million respectively.
Language eng
Indigenous content off
Field of Research 0701 Agriculture, Land and Farm Management
HERDC Research category C1 Refereed article in a scholarly journal
Free to Read? Yes
Persistent URL http://hdl.handle.net/10536/DRO/DU:30133533

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Every reasonable effort has been made to ensure that permission has been obtained for items included in DRO. If you believe that your rights have been infringed by this repository, please contact drosupport@deakin.edu.au.