DOCSLIB.ORG

An Empirical Analysis of Malaysian Housing Market: Switching and Non-Switching Models

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
An Empirical Analysis of Malaysian Housing Market: Switching and Non-Switching Models Lincoln University Digital Thesis Copyright Statement The digital copy of this thesis is protected by the Copyright Act 1994 (New Zealand). This thesis may be consulted by you, provided you comply with the provisions of the Act and the following conditions of use: you will use the copy only for the purposes of research or private study you will recognise the author's right to be identified as the author of the thesis and due acknowledgement will be made to the author where appropriate you will obtain the author's permission before publishing any material from the thesis. An Empirical Analysis of Malaysian Housing Market: Switching and Non-Switching Models A thesis submitted in partial fulfilment of the requirements for the Degree of Doctoral of Philospohy in Finance at Lincoln University by Zaemah Zainuddin Lincoln University 2010 Abstract of a thesis submitted in partial fulfilment of the requirements for the Degree of PhD in Finance.ct AN EMPIRICAL ANALYSIS OF MALAYSIAN HOUSING MARKET: SWITCHING AND NON-SWITCHING MODELS by Zaemah Zainuddin Increasing inflows of foreign investment particularly in the real estate sector in the early 1990s, has contributed to the building up of “bubble” in the economies of several Asian countries. In 2004, house prices increased rapidly in several countries such as South Korea, Hong Kong and Singapore (World Report, 2004). The rapid increase in prices has led economists to believe that a ‘bubble’ has form in the housing market. A housing market bubble occurs when house price increases are not justified by macroeconomic fundamentals and other underlying factors (Xia and Tan 2006). The effect of housing bubble bursts is seen in the loss of value to owners of capital, increase unemployment, slowing down of the economy particularly in housing-related sector. This study empirically test whether a bubble exist in the Malaysian Housing Market for the period 1990 to 2004. Using a general to specific approach from a simple multivariate liner regression model (OLS) to more sophisticated models such as Vector Error Correction Model (VECM), Vector AutoRegression (VAR), regime-switching (Markov-Switching),GARCH model and MS-GARCH, our result suggests that a semi-rational bubble does exist in the Malaysian housing market in 1997:Q1 to 1998:Q2. The deviations or fluctuations of the Malaysian House Price Index cannot be explained by the macroeconomic fundamental variables such as income, interest rate and inflation. Furthermore, the result also implies that Malaysian housing market is inefficient market due to the slow adjustment process towards its long run equilibrium price. The mean and variance of the MHPI is significantly different in the two states (boom and burst) which suggest that the Malaysian housing market had experienced a boom and bust of house price bubble prior to the occurrence of the 1997 Asian financial crisis. The results of switching model approach support the changing behaviour of MHPI in different economic states, implying possible existence of bubbles in the Malaysian housing market. Keywords: house price bubbles, regimes switching, GARCH, VECM ii Acknowledgements With the help and guidence by Allah, I was able to complete this thesis. I received a great deal of help and assistance in completing and putting this study together. It is a pleasure to express my appreciation to those who have inspired and motivated me throughout my Phd journey. Above all, I would like to express my deepest appreciation to my supervisor Assoc. Prof Dr Christopher Gan for his constructive comments, guidance, patience and valuable time in helping and editing this study. My sincere gratitude also goes to my associate supervisor, Mr Bert Ward who motivated me in learning and understanding econometric and statistical issues in this study. I would also like to thank my lovely and precious friends Yao, Pat, Lisa, Satit, Suriani, Athiah, Juhaida, Wan, Sabrina, Suraya, and Wan Munirah for all their supports, love and friendship throughout my studies at Lincoln University, New Zealand. I am also indebted to all the staffs at Student Learning Centre and the Faculty of Commerce for their guidance and help. It is my greatest pleasure to have such a wonderful experience studying at Lincoln University. Lastly, I would like to express my greatest appreciation to my parent, Zainuddin and Fatimah, my sisters, Zuhaida, Zahirah and Zuliana, for which I love and care so much. Thank you for your endless love and guidance without whom I would not be what I am today. I do owe a huge debt to my precious and lovely daughter Nur Atilia and my husband Muhamad Nizam. Your love and patience brought joy and happiness to my busy life as a student. Thank you Zaemah Zainuddin iii Table of Contents Acknowledgements .............................................................................................................iii Table of Contents................................................................................................................iv List of Tables......................................................................................................................vii List of Figures ...................................................................................................................viii Chapter 1 Overview of the study......................................................................................... 1 1.0 Introduction .................................................................................................................. 1 1.1 Background of the Study............................................................................................... 5 1.2 Problem Statement...................................................................................................... 12 1.3 Research Objectives.................................................................................................... 15 1.4 Significance of the Study ............................................................................................ 15 1.5 Organization of Thesis................................................................................................ 16 Chapter 2 An Overview of the Housing Market in Malaysia........................................... 18 2.0 Introduction ................................................................................................................ 18 2.1 Background of Malaysia ............................................................................................. 18 2.2 Overview of the Malaysian Property Market............................................................... 21 2.2.1 The Characteristic of Malaysian Housing Market ............................................ 23 2.2.2 Malaysian House Price Structure..................................................................... 26 2.2.3 Property Cycles in Malaysia ............................................................................ 29 2.3 The Mortgage Market in Malaysia.................................................................................. 38 2.4 Malaysian Housing Policy.............................................................................................. 41 2.5 Capital Control in Malaysia............................................................................................ 42 2.6 New Policies and Guidelines by Malaysian Government to Restructure the Real Estate Market after the 1997 Asian Financial Crisis............................................................... 44 2.7 Summary........................................................................................................................ 46 Chapter 3 Theories of Housing Bubbles ........................................................................... 47 3.0 Introduction ................................................................................................................ 47 3.1 The Concept of Bubble in the Housing Market............................................................ 47 3.1.1 Definition of Bubbles ......................................................................................... 48 3.2 Theories of Housing Bubbles...................................................................................... 52 3.2.1 Supply Side Economics Theory.......................................................................... 53 3.2.2 Keynesians and Shiller Theory........................................................................... 54 3.2.3 The Austrian School of Thoughts ....................................................................... 55 3.3 Price Expectation Theories.......................................................................................... 55 3.3.1 Rational Expectation Hypothesis (REH)............................................................. 57 3.3.2 Adaptive Expectation Hypothesis (AEH) ........................................................... 60 3.3.3 Exogenous Expectation Hypothesis (EEH)......................................................... 63 3.4 Signs and indication of bubbles in the housing market ................................................ 63 3.4.1 Phases of Bubbles in the Housing Market........................................................... 64 3.5 Review on Housing Bubbles Studies .............................................................................. 71 3.6 Conclusions.................................................................................................................... 79 Chapter 4 Housing Bubble Model....................................................................................
Load more

Recommended publications
  • Revisiting Transnational Media Flow in Nusantara: Cross-Border Content Broadcasting in Indonesia and Malaysia
    Southeast Asian Studies, Vol. 49, No. 2, September 2011 Revisiting Transnational Media Flow in Nusantara: Cross-border Content Broadcasting in Indonesia and Malaysia Nuurrianti Jalli* and Yearry Panji Setianto** Previous studies on transnational media have emphasized transnational media organizations and tended to ignore the role of cross-border content, especially in a non-Western context. This study aims to fill theoretical gaps within this scholarship by providing an analysis of the Southeast Asian media sphere, focusing on Indonesia and Malaysia in a historical context—transnational media flow before 2010. The two neighboring nations of Indonesia and Malaysia have many things in common, from culture to language and religion. This study not only explores similarities in the reception and appropriation of transnational content in both countries but also investigates why, to some extent, each had a different attitude toward content pro- duced by the other. It also looks at how governments in these two nations control the flow of transnational media content. Focusing on broadcast media, the study finds that cross-border media flow between Indonesia and Malaysia was made pos- sible primarily in two ways: (1) illicit or unintended media exchange, and (2) legal and intended media exchange. Illicit media exchange was enabled through the use of satellite dishes and antennae near state borders, as well as piracy. Legal and intended media exchange was enabled through state collaboration and the purchase of media rights; both governments also utilized several bodies of laws to assist in controlling transnational media content. Based on our analysis, there is a path of transnational media exchange between these two countries.
    [Show full text]
  • The Malaysian Intellectual:A Briefsari Historical 27 (2009) Overview 13 - 26 of the Discourse 13
    The Malaysian Intellectual:A BriefSari Historical 27 (2009) Overview 13 - 26 of the Discourse 13 The Malaysian Intellectual: A Brief Historical Overview of the Discourse DEBORAH JOHNSON ABSTRAK Kertas ini memperkatakan wacana yang melibatkan intelektual di Malaysia. Ia menegaskan bahawa sesuai dengan perubahan sosio-politik, ‘bidang makna’ yang berkaitan konsep ‘intelektual’ dan lokasi sosial sebenar para intelektual itu sudah mengalami perubahan besar sepanjang abad dua puluh. Ini menimbulkan cabaran kepada sejarahwan yang ingin melihat masa lampau dengan kaca mata masa kini tetapi yang sepatutnya perlu difahami dengan tanggapan yang ikhlas sesuai dengan masanya. Selain itu, ia juga menimbulkan cabaran kepada penyelidik sains sosial untuk mengelak dari mengaitkan konsep masa lampau kepada konsep masa terkini supaya dapat memahami sumbangan ide dan kaitannya kepada masa lampau. Sehubungan itu, makalah ini memberi bayangan sekilas tentang persekitaran, motivasi dan sumbangan beberapa tokoh intelektual yang terkenal di Malaysia. Kata kunci: A Samad Ismail, intelektual, wacana, Alam Melayu ABSTRACT This paper focuses on the discourse in Malaysia concerning intellectuals. It asserts that in concert with political and sociological changes, the ‘field of meanings’ associated with the concept of ‘the intellectual’ and the actual social location of intellectual actors have undergone considerable change during the twentieth century. This flags the challenge for historians who are telling today’s stories about the past in today’s terms, but who have to try to understand that past on its own terms. Further, it flags the challenge for social scientists to not merely appropriate the concepts of past scholars in tying to understand the present, but rather to also understand the context in which those ideas had relevance.
    [Show full text]
  • Only Yesterday in Jakarta: Property Boom and Consumptive Trends in the Late New Order Metropolitan City
    Southeast Asian Studies, Vol. 38, No.4, March 2001 Only Yesterday in Jakarta: Property Boom and Consumptive Trends in the Late New Order Metropolitan City ARAI Kenichiro* Abstract The development of the property industry in and around Jakarta during the last decade was really conspicuous. Various skyscrapers, shopping malls, luxurious housing estates, condominiums, hotels and golf courses have significantly changed both the outlook and the spatial order of the metropolitan area. Behind the development was the government's policy of deregulation, which encouraged the active involvement of the private sector in urban development. The change was accompanied by various consumptive trends such as the golf and cafe boom, shopping in gor­ geous shopping centers, and so on. The dominant values of ruling elites became extremely con­ sumptive, and this had a pervasive influence on general society. In line with this change, the emergence of a middle class attracted the attention of many observers. The salient feature of this new "middle class" was their consumptive lifestyle that parallels that of middle class as in developed countries. Thus it was the various new consumer goods and services mentioned above, and the new places of consumption that made their presence visible. After widespread land speculation and enormous oversupply of property products, the property boom turned to bust, leaving massive non-performing loans. Although the boom was not sustainable and it largely alienated urban lower strata, the boom and resulting bust represented one of the most dynamic aspect of the late New Order Indonesian society. I Introduction In 1998, Indonesia's "New Order" ended.
    [Show full text]
  • Rpr-2009-7-1
    ACKNOWLEDGEMENT The Comprehensive Asia Development Plan (CADP) is the crystallization of various academic efforts, especially the strong leadership, rigorous analysis, deep insight and relentless efforts of Dr. Fukunari Kimura and Mr. So Umezaki, with support from many other scholars including, Dr. Mitsuyo Ando, Dr. Haryo Aswicahyono, Dr. Ruth Banomyong, Dr. Truong Chi Binh, Dr. Nguyen Binh Giang, Dr. Toshitaka Gokan, Dr. Kazunobu Hayakawa, Dr. Socheth Hem, Dr. Patarapong Intarakumnerd, Dr. Masami Ishida, Mr. Toru Ishihara and his team, Dr. Ikumo Isono, Dr. Souknilan Keola, Dr. Somrote Komolavanij, Dr. Toshihiro Kudo, Dr. Satoru Kumagai, Dr. Moe Kyaw, Dr. Mari-Len Macasaquit, Dr. Tomohiro Machikita, Mr. Mitsuhiro Maeda, Dr. Sunil Mani, Dr. Toru Mihara, Dr. Avvari V. Mohan, Dr. Siwage Dharma Negara, Dr. Leuam Nhongvongsithi, Dr. Ayako Obashi, Dr. Apichat Sopadang, Dr. Chang Yii Tan, Dr. Masatsugu Tsuji, Dr. Yasushi Ueki and Dr. Korrakot Yaibuathet. ERIA also owes grateful thanks to research groups in Nippon Koei and the National University of Singapore. ERIA is also grateful for valuable guidance and instructions provided by the ASEAN Secretariat and inter-alia His Excellency Dr. Surin Pitsuwan, Secretary-General of ASEAN, in making the CADP properly responsive to the needs of policy makers and in providing great support for our activities. Additionally ERIA would like to express its deepest gratitude to the Asian Development Bank (ADB), the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP), and various donor agencies including the Japan International Cooperation Agency (JICA) for providing valuable information related to infrastructure projects, and other inputs. Especially we thank ADB for making time to conduct informal discussions with our team, and for the insights provided which were really useful for our analysis.
    [Show full text]
  • The Executive Summary of Our Real Estate Report
    “THE SKY’S THE LIMIT“. BUT IS THIS STILL TRUE FOR TODAY’S REAL-ESTATE MARKETS? The bank for a changing world Highlights of the report The past can be used to suggest many things, with history City of London fell by 6%, sacrificing equity appreciation believed to repeat itself. Some examples: returns even more (depending on leverage, source: CBRE United Kingdom Monthly Index of July 2016). In “Property values will fall if interest rates rise”. Which addition, Norway’s sovereign wealth fund did not await interest rates? Nominal rates? Real rates? What type of convincing property data to revise down the value of property: prime or secondary? Which areas? its UK holdings by 5% in the second quarter. And the Brexit outcome was very tough for the UK’s open- “Property cycles are linked to economic cycles”. Is ended property funds, as 7 large property vehicles had the relationship between economic fundamentals and to suspend trading almost straightaway amid volatile real estate performance clearly defined? Are capital market conditions. markets capable of distorting this linkage? Has property management progressed more professionally in recent • The performance of the world’s major housing years, allowing for better performances anyway? markets is dispersed to an increasing extent, marking a differentiated price pattern. Hong Kong’s overvalued “UK property markets will suffer a disastrous slump due residential market saw property prices tumble by to Brexit as they did in the early nineties.” Are UK interest around 30% between October and July 2016 (depending rates hovering at similar levels presently? Can the impact on sources).
    [Show full text]
  • CADP 2.0) Infrastructure for Connectivity and Innovation
    The Comprehensive Asia Development Plan 2.0 (CADP 2.0) Infrastructure for Connectivity and Innovation November 2015 Economic Research Institute for ASEAN and East Asia The findings, interpretations, and conclusions expressed herein do not necessarily reflect the views and policies of the Economic Research Institute for ASEAN and East Asia, its Governing Board, Academic Advisory Council, or the institutions and governments they represent. All rights reserved. Material in this publication may be freely quoted or reprinted with proper acknowledgement. Cover Art by Artmosphere ERIA Research Project Report 2014, No.4 National Library of Indonesia Cataloguing in Publication Data ISBN: 978-602-8660-88-4 Contents Acknowledgement iv List of Tables vi List of Figures and Graphics viii Executive Summary x Chapter 1 Development Strategies and CADP 2.0 1 Chapter 2 Infrastructure for Connectivity and Innovation: The 7 Conceptual Framework Chapter 3 The Quality of Infrastructure and Infrastructure 31 Projects Chapter 4 The Assessment of Industrialisation and Urbanisation 41 Chapter 5 Assessment of Soft and Hard Infrastructure 67 Development Chapter 6 Three Tiers of Soft and Hard Infrastructure 83 Development Chapter 7 Quantitative Assessment on Hard/Soft Infrastructure 117 Development: The Geographical Simulation Analysis for CADP 2.0 Appendix 1 List of Prospective Projects 151 Appendix 2 Non-Tariff Barriers in IDE/ERIA-GSM 183 References 185 iii Acknowledgements The original version of the Comprehensive Asia Development Plan (CADP) presents a grand spatial design of economic infrastructure and industrial placement in ASEAN and East Asia. Since the submission of such first version of the CADP to the East Asia Summit in 2010, ASEAN and East Asia have made significant achievements in developing hard infrastructure, enhancing connectivity, and participating in international production networks.
    [Show full text]
  • Man-Made Island Not Yet Clear for Launch
    Volume 14 Issue 21 News Desk - Tel: 076-236555 May 26 - June 1, 2007 Daily news at www.phuketgazette.net 25 Baht The Gazette is published Teenager dies in association with Man-made island not in night of yet clear for launch gang violence IN THIS ISSUE By Sompratch Saowakhon NEWS: Tsunami evacuation By Stephen Fein PHUKET CITY: One teenager drills set; Film Fest coming; died on May 20 after a night of Princess visits Phuket. PHUKET: Following reports that gang threats and retaliations Pages 2 & 3 a man-made island was set to be ended in a fatal shooting. The 17- built off the east coast of Phuket year-old victim, Kanchit “Phai” INSIDE STORY: Phi Phi ferry to accommodate a marina for Trupsin, was found at 3 am out- fire. Pages 4 & 5 super-yachts, the Marketing side Muslim Puenrak restaurant AROUND THE REGION: Rough Manager at Royal Phuket Ma- on Anuphas Phuket Kan Rd. weather emergency force. rina clarified that the project is Police were told the inci- Page 7 still in the early planning stages dent began when a passenger and faces many obstacles before riding pillion on a motorbike AROUND THE SOUTH: Security the island can rise from the sea. drove past a group of about 30 force budget request halved. RPM Marketing Director youths in Saphan Hin and pointed Page 8 Wilaiporn Titimanaaree told the a gun at them. Although he did AROUND THE NATION: Happi- Gazette that developer Gulu Lal- not fire the weapon, the group ness index down in the vani would hold a press confer- of 30 gave chase.
    [Show full text]
  • SOUTHEAST ASIAN GLOBALIZATION Responses To
    Loh & NIAS Democracy in Asia series, 10 Öjendal (eds) SOUTHEAST ASIAN RESPONSES TO GLOBALIZATION Restructuring Governance and Deepening Democracy SOUTHEAST ASIAN RESPONSES TO GLOBALIZATION Edited by Francis Loh Kok Wah and Joakim Öjendal It is now apparent, especially in the aftermath of the regional financial crisis of 1997, that globalization has been impacting upon the Southeast Asian economies and societies in new and harrowing ways, a theme of many SOUTHEAST ASIAN recent studies. Inadvertently, these studies of globalization have also high- lighted that the 1980s and 1990s debate on democratization in the region Responses to – which focused on the emergence of the middle classes, the roles of new social movements, NGOs and the changing relations between state and civil society – might have been overly one-dimensional. GLOBALIZATION This volume revisits the theme of democratization via the lenses of globalization, understood economically, politically and culturally. Although globalization increasingly frames the processes of democracy and develop- restructuring governance and ment, nonetheless, the governments and peoples of Southeast Asia have deepening democracy been able to determine the pace and character – even the direction of these processes – to a considerable extent. This collection of essays (by some distin- guished senior scholars and other equally perceptive younger ones) focuses on this globalization–democratization nexus and shows, empirically and ana- lytically, how governance is being restructured and democracy sometimes
    [Show full text]
  • Urban Ecosystem Studies in Malaysia
    Urban Ecosystem Studies in Malaysia A study of change Edited by NOORAZUAN MD HASHIM Faculty of Social Science and Humanities, Universiti Kebangsaan Malaysia, Malaysia [email protected] RUSLAN RAINIS School of Humanities Universiti Sains Malaysia, Malaysia [email protected] In association with the Malaysian Research Group, United Kingdom Universal Publishers Florida USA, 2003 Cover design: Ruslan Rainis & Mustapha Abd Talip Cover photo: A view of the Kuala Lumpur city centre, the largest and most developed urban area in Malaysia. Photo courtesy of Professor Morshidi Sirat and Abdul Aziz Majid, Geography Section, School of Humanities, Universiti Sains Malaysia, Penang Urban Ecosystem Studies in Malaysia: A Study of Change Copyright © 2003 Noorazuan Md Hashim & Ruslan Rainis All rights reserved. The content of the papers in this publication reflect the opinions/works of the authors and the Editors take no responsibility of the view expressed or material used by the authors. Universal Publishers/uPUBLISH.com USA • 2003 ISBN: 1-58112-588-7 www.uPUBLISH.com/books/hashim-rainis.htm Preface The book, ‘Urban Ecosystem Studies In Malaysia-A study of change’ is the first publication from the Malaysian Research Group (MRG), a voluntary research-networking group for Malaysian researchers based in Manchester, United Kingdom. The group was established in August 2001 after a series of discussions between Malaysian researchers in Manchester and H.E. the High Commissioner of Malaysia to the United Kingdom and Eire, TYT Dato' Salim Hashim; the Director of Science, Ministry of Science, Technology and Environment, Dr. Mustaza Ahmadun; and the Director of Malaysian Student Department, Dr. Kamarudin Mohd Nor concerning the roles of Malaysian researchers in this country.
    [Show full text]
  • C E P Fl L MACROECONOMIC ADJUSTMENTS and the REAL ECONOMY in KOREA and MALAYSIA SINCE 1997
    Documentos de proyectos /%,/V' f BiBÜOTF.CA , - V - | > K0YU¡>- hiAC'0--:"c: ';í'i!,OAS \ ' n SAMTíAGO ■ V?^h, CHi'" Macroeconomic adjustments and the real economy in Korea and Malaysia since 1997 Zainal-Abidin Mahani Kwanho Shin Yunjong Wang NACIONES UNIDAS C E P fl L MACROECONOMIC ADJUSTMENTS AND THE REAL ECONOMY IN KOREA AND MALAYSIA SINCE 1997 Zainal-Abidin Mahani Kwanho Shin Yunjong Wang LC/W.7 October 2004 This document was prepared by Kwanho Shin, Professor at the University of Korea; Yunjong Wang, Investigator at the Korea Institute for International Policy (KIEP); and Zainal-Abidin Mahani, Professor at the University of Malaysia, within ECLAC research project on Management of Volatility, Financial Globalization and Growth in EEs, supported by the Ford Foundation. The authors gratefully acknowledge Ricardo Ffrench-Davis for detailed comments on the earlier and revised draft. Also, they wish to thank Ariel Buira, Roy Culpeper, José de Gregorio, Barry Herman, Manuel Montes, José Antonio Ocampo, Arturo O’Connell, John Williamson, Heriberto Tapia, and other participants of two seminars organized by ECLAC, for their useful suggestions and comments on the revised version. The authors alone are responsible for all opinions expressed in this paper. Contents Abstract........................................................................................................................................................................ 5 Introduction ................................................................................................................................................................
    [Show full text]
  • PPP Book 2013.Pdf
    REPUBLIC OF INDONESIA MINISTRY OF NATIONAL DEVELOPMENT PLANNING/ NATIONAL DEVELOPMENT PLANNING AGENCY PUBLIC PRIVATE PARTNERSHIPS INFRASTRUCTURE PROJECTS PLAN IN INDONESIA 2013 Jakarta, November 2013 ii PUBLIC PRIVATE PARTNERSHIPS INFRASTRUCTURE PROJECTS PLAN IN INDONESIA FOREWORD BY THE MINISTER OF NATIONAL DEVELOPMENT PLANNING AND HEAD OF NATIONAL DEVELOPMENT PLANNING AGENCY (BAPPENAS) he Government of Indonesia is consistently sustaining the momentum of Public Private Partnership (PPP) development in order to accelerate the provision of infrastructure. The TPPP model has gained increasing in presence since the pronouncement of the Master plan for the Acceleration and Expansion of Indonesia’s Economic Development (MP3EI) in 2011. The MP3EI reiterates the Government of Indonesia’s determination to use the PPPs as one of the keys to financing the country’s economic development. The Government holds a proactive approach and continues to evaluate and strengthen policy in order to support the provision of infrastructure using PPPs. Firstly, through the establishment of the regulatory framework for PPPs, comprising Presidential Regulation 67/2005 on Cooperation between Government and Business Entities in Infrastructure Provision and its subsequent amendments PR 13/2010, PR 56/2011 and PR 66/2013. Secondly, by providing supporting regulations to address major issues affecting the implementation of PPP projects, v.g.Law 2/2012 on land acquisition for public infrastructure projects and Regulation 223/PMK.011/2012 of the Ministry of Finance on the Viability Gap Fund. Bappenas has also updated Ministerial Regulation on PPP Operational Guidelines 4/2010 with Ministerial Regulation 3/2012 to reflect the evolution of the legal framework and to improve the PPP preparation process.
    [Show full text]
  • The Archipelago Economy: Unleashing Indonesia's Potential
    McKinsey Global Institute McKinsey Global Institute The archipelago economy: Unleashing Indonesia’s potential Unleashing Indonesia’s economy: The archipelago September 2012 The archipelago economy: Unleashing Indonesia’s potential The McKinsey Global Institute The McKinsey Global Institute (MGI), the business and economics research arm of McKinsey & Company, was established in 1990 to develop a deeper understanding of the evolving global economy. Our goal is to provide leaders in the commercial, public, and social sectors with the facts and insights on which to base management and policy decisions. MGI research combines the disciplines of economics and management, employing the analytical tools of economics with the insights of business leaders. Our micro-to-macro methodology examines microeconomic industry trends to better understand the broad macroeconomic forces affecting business strategy and public policy. MGI’s in-depth reports have covered more than 20 countries and 30 industries. Current research focuses on six themes: productivity and growth, financial markets, technology and innovation, urbanisation, labour markets, and natural resources. Recent research has assessed the diminishing role of equities, progress on debt and deleveraging, resource productivity, cities of the future, the future of work in advanced economies, the economic impact of the Internet, and the role of social technology. MGI is led by three McKinsey & Company directors: Richard Dobbs, James Manyika, and Charles Roxburgh. Susan Lund serves as director of research. Project teams are led by a group of senior fellows and include consultants from McKinsey’s offices around the world. These teams draw on McKinsey’s global network of partners and industry and management experts. In addition, leading economists, including Nobel laureates, act as research advisers.
    [Show full text]