WORKING PAPERS DATABASE

TitleResearchersDescriptionSeries TypeResearch Center
A Composite Forecast Approach for Market Demand Using Regression with Simulation to Predict the Palm Oil MarketAsad AtaThere is a dearth of literature with econometric models that use a combination of different forecasting approaches to make predictions for market demand especially for commodity products. Procurement needs for many products for example bleaching earth that is used in the refinement of crude palm oil as an example depend directly on the forecast of palm oil. This research develops an econometric model to determine the market size with crude palm oil as an example in the context of Indonesian market. Key factors of market demand such as production and consumption factors, factors determining export and import of crude palm oil and biodiesel consumption factors, in the context of palm oil are identified from existing literature and case studies. A multilinear regression approach with time series analysis is used to study the interaction of these factors, modelling their behaviour and predicting their coefficients in determining the overall market size.Working PaperThe Center of Technology, Strategy & Sustainability (CTSS)
Insights from GAP Execution for Yield Intensification Among Independent Smallholder Farmer for Oil PalmAsad Ata, Kee En Lim, Vasagi Ramachandran, Muhilan Ratnam, Rizal Mohamad, Aiman Hashim, Chua Soon Tat, Hanafi MansorOil palm productivity today is well below its actual potential worldwide and much more so with Independent Smallholder (ISH) farmers. The national average oil yield in Malaysia remains at the 3 to 4 tons per hectare level, with growth in palm oil production in the last three decades having come mainly from increased area cultivated. The ISH sector contributes a total of 16.8% of the total area of palm plantations in Malaysia. This study looks at encouragement of Good Agricultural Practices (GAP) implementation to drive sustainable yield intensification in ISH farms, leading to better ISH livelihoods that alleviate their cost burden for certification to sustainable production standards that discourage deforestation and opening of new land for oil palm cultivation. In large plantations, decades of field experimentation have led to the development of GAP proven to drive yield improvement, but similar work is lacking for oil palm ISH. The GAP of large growers may also not be directly applicable or easily transferable to ISH whose farms are very small and discontinuous, and who have low capital and limited access to resources and knowledge. In this study, we set out to assess the impact of selected GAP that we considered most relevant for ISH in our project area, as well as the challenges faced by the participating ISH in implementing and sustaining the GAP in their farms. We measured the impact of the implemented GAP on fresh fruit bunch (FFB) yield and sales revenue in a group of ISH farms, called Learning Farms (LeFa), by comparison against a group of similar farms where normal practices of ISH continued. The status of implementation and maintenance of GAP in the LeFa was assessed in periodic field audits. Key insights were gained on the ability of ISH to implement the GAP. While GAP implementation was below par, the impact on FFB yield and sales revenue showed promiseWorking PaperThe Center of Technology, Strategy & Sustainability (CTSS)
Achieving Sustainable Development Goals – An NDPE and Certification Strategy for Independent Smallholder Farmers for Oil PalmAsad Ata, Kee En Lim, Vasagi Ramachandran, Yusof Nursaiyidah, Muhilan RatnamMillions of smallholders depend on palm oil for their livelihoods, but their adaptation to sustainable agriculture practices are hindered by access to resources, knowledge, and awareness of sustainability. Addressing these challenges required an integrated approach to engaging in complex sustainability issues while empowering stakeholders. The Center for Sustainable Small-owners (CSS) was established to facilitate and empower Independent Smallholders (ISH) in promoting ethical and responsible production of oil palm with a commitment to no deforestation, no new plantation on peatlands, and no exploitation (NDPE) in the supply chain. The CSS approach is to execute it through two strategies i.e., empowering communities, ensuring sustainability through certification and compliance building farmer associations to safeguard their interests, and sourcing responsibly ensuring ethical and sustainable oil palm production while improving livelihoods through yield intensification. The research aims to demonstrate how through such initiatives CSS has been able to support sustainable development goals (SDG). Through the following six activities viz. Traceability and Verification, Training, Certification and Compliance, Livelihood Improvement, Community Development, and Monitoring and Guidance. CSS contributes directly to SDG 2, 8, 12, 15, and 17.Working PaperThe Center of Technology, Strategy & Sustainability (CTSS)
ESG Practice in ASEAN & Korea: Pathways Towards SustainabilityAsia School of Business ASEAN Research Center, Malaysia, Korea University ASEAN Center, KoreaIn recent years, environmental, social, and governance (ESG) has emerged as crucial metrics of evaluating the sustainability and ethical impact of business and investment, gaining significant prominence in the global business landscape. The adoption of ESG practices and adaptability to evolving regulations, albeit not an entirely novel concept, has now assumed paramount importance for businesses striving to thrive in the era of Sustainable Development Goals (SDGs). Today, the integration of ESG principles is not merely a commendable initiative but an imperative, serving as a foundational criterion for the successful operation of businesses committed to making a positive impact.Working PaperASEAN Research Center
An Energy Justice Index for The Energy Transition in The Global SouthRenato Lima-de-OliveiraMiddle-income economies such as Malaysia, which are integrated into global value chains, have both significant domestic carbon emissions as well as sizeable opportunities for nature-based carbon offsets. While they face pressures to reduce carbon emissions from their international trade and investment partners, these countries are also ineligible for official development aid, and they therefore need to mobilize domestic funds to finance reductions in carbon emissions. Malaysia launched a domestic Voluntary Carbon Market (VCM) in December 2022 as part of the government’s climate change policies. The VCM appears to have been implemented relatively quickly, having only been announced in September 2021. This paper traces the origins of the VCM and analyzes the economic and regulatory context of the market in terms of the domestic supply and demand for carbon credits in Malaysia. The analysis reveals that Malaysia, as a middle-income economy that has significant potential for nature-based carbon offsets, faces a number of unique domestic political-economic challenges involving carbon trading, which are not faced by high-income economies nor by low-income economies.Research PaperThe Center of Technology, Strategy and Sustainability (CTSS)
Malaysia’s New Voluntary Carbon Market: Origins, Ecosystem and ProspectsPieter E. Stek, Thessa Vasudhevan, Renato Lima-de-OliveiraMiddle-income economies such as Malaysia, which are integrated into global value chains, have both significant domestic carbon emissions as well as sizeable opportunities for nature-based carbon offsets. While they face pressures to reduce carbon emissions from their international trade and investment partners, these countries are also ineligible for official development aid, and they therefore need to mobilize domestic funds to finance reductions in carbon emissions. Malaysia launched a domestic Voluntary Carbon Market (VCM) in December 2022 as part of the government’s climate change policies. The VCM appears to have been implemented relatively quickly, having only been announced in September 2021. This paper traces the origins of the VCM and analyzes the economic and regulatory context of the market in terms of the domestic supply and demand for carbon credits in Malaysia. The analysis reveals that Malaysia, as a middle-income economy that has significant potential for nature-based carbon offsets, faces a number of unique domestic political-economic challenges involving carbon trading, which are not faced by high-income economies nor by low-income economies.Working PaperThe Center of Technology, Strategy and Sustainability (CTSS)
Science and Engineering Knowledge Production in ASEAN: Global Emergence, Fading RegionalismPieter E. StekThe policy recommendations presented in this policy brief were developed in cooperation with Malaysian energy experts during two stakeholder workshops held in November 2021 with 22 participants from various sectors, including the finance sector, think-tanks, civil society and NGOs, industry, and academia. The Malaysian energy system was modelled by the ISIGET research team of the IASS Potsdam using stakeholder-driven Cross Impact Balance Analysis to determine factors preventing or facilitating a sustainable energy future. The subsequent succession analysis reveals the factors that need to be addressed in order to trigger changes in the entire modelled system. The recommendations discussed by the Malaysian experts are based on the results of the succession analysis, which suggests that a trajectory change would require action across multiple fields to break up established decision-making patterns, liberalise the energy market, and channel post-pandemic recovery measures and long-term development plans towards green growth. More details on the method will be available in a forthcoming study.Working PaperThe Center of Technology, Strategy and Sustainability (CTSS)
Unlocking a Low-Carbon Future for MalaysiaRenato Lima de OliveiraThe policy recommendations presented in this policy brief were developed in cooperation with Malaysian energy experts during two stakeholder workshops held in November 2021 with 22 participants from various sectors, including the finance sector, think-tanks, civil society and NGOs, industry, and academia. The Malaysian energy system was modelled by the ISIGET research team of the IASS Potsdam using stakeholder-driven Cross Impact Balance Analysis to determine factors preventing or facilitating a sustainable energy future. The subsequent succession analysis reveals the factors that need to be addressed in order to trigger changes in the entire modelled system. The recommendations discussed by the Malaysian experts are based on the results of the succession analysis, which suggests that a trajectory change would require action across multiple fields to break up established decision-making patterns, liberalise the energy market, and channel post-pandemic recovery measures and long-term development plans towards green growth. More details on the method will be available in a forthcoming study.Working PaperThe Center of Technology, Strategy and Sustainability (CTSS)
Industry 4.0 Technology Adoption in Malaysian Manufacturing: Strategies for Enhancing CompetitivenessRenato Lima de Oliveira, Tan Zhai Gen, Deborah Chow, Vaisnavi Mogan RaoNew technologies related to the Fourth Industrial Revolution (IR 4.0) are driving changes in global value chains (GVCs). These changes are already impacting Malaysia which has been deindustrializing and losing its competitive advantage in labour-intensive manufacturing to neighbouring countries, which offer lower labour cost while they are quickly improving their infrastructure. While this is a general trend for Malaysia, a notable exception is the state of Pulau Pinang, which has maintained its industrial base and shifted towards high-technology manufacturing. The research findings suggest that IR 4.0 technology adoption are used to improve productivity and quality, and rely on close collaboration with local technology suppliers. The development of local technology suppliers is an area in which Malaysia can move up to higher value-added activities within the GVC, including R&D and design. Importantly, workers are generally receptive to IR 4.0 technologies, as it improves the quality of their work. However, these technologies can also reduce employment for low-skilled repetitive work, which is an area in which Malaysia’s manufacturing competitiveness is already declining. To achieve successful IR 4.0 technology deployment, manufacturing firms need government support, especially in the area of skills and training, both to upskill current workers, and to ensure new workers have the right educational foundation. Training programs initiated by industry, but funded by government, appear to be successful in addressing some of the skills gaps. Viewed more broadly, the improving quality of work and increased productivity due to IR4.0 technology adoption, could play a role in making small- and medium-sized manufacturers more attractive as employers. This would help them hire and retain skilled Malaysian workers, who might otherwise opt to work for multinationals, or overseas. Working PaperThe Center of Technology, Strategy and Sustainability (CTSS)
De jure benchmark bondsEli Remolona, James YetmanAs the most liquid of instruments, benchmark bonds play an important role in price discovery. Where markets fail to create them, however, can governments do so? In Indonesia, Malaysia and Thailand, authorities have designated specific bonds as benchmarks. We measure these bonds’ liquidity and find that they succeed as benchmarks about 55% of the time. In contrast to the experience of large advanced markets, our estimates suggest that choosing on-the-run issues as de jure benchmark bonds is a poor strategy. Instead, what leads to success in emerging markets is choosing seasoned bonds that already have a record of superior liquidity.Working PaperNIL
Norms, Trust, and Increasing Vaccine Registration in Malaysia - Preliminary ResultsMelati Nungsari, Sam Flanders, N. Izzatina Abdul Aziz, Chin Kar Yern, Shenyi Chua, Tan Zhai Gen, Fatin Nadhirah Binti JamalolailThis report summarizes preliminary findings from a survey experiment with 1307 Malaysian respondents. We study 1) trust levels in institutions and norms surrounding the choice to get vaccinated in this country, 2) perceptions on state “carrots” versus “sticks” in incentivizing vaccinations, and 3) whether a cash lottery of RM 500 is an effective intervention to increase the number of registrations for vaccinations. Although our sample is not representative of the entire Malaysian society, they are suggestive and can provide some insights on incentivizing pro-social behaviour with regards to vaccination. Specifically, we found that incentives can encourage vaccine registration.Working PaperASEAN Research Center
Business Shutdowns and COVID-19 MortalityGabriele CiminelliThis paper zooms in on business shutdowns and investigates their effectiveness in reducing mortality. We leverage upon highly granular death registry data for over 4,000 Italian municipalities in a diff-in-diff approach that allows us to credibly mitigate endogeneity concerns. Working PaperNIL
Digital Transformation: Some Implications for Financial and Macroeconomic StabilityHans GenbergVirtual AI-assisted financial intermediation is challenging financial intermediation and payment services that are based on personal contacts. Digital transformation is changing how and by whom financial services are provided, how payments are made within an economy and across borders, and how and where goods and services are produced in a globalized economy. These transformations bring significant benefits in the form of greater variety and convenience of financial services, faster speed of payment transactions, and more efficient production processes. But there are also potential costs. Traditional commercial banking models are challenged by unregulated FinTech and BigTech firms, possibly threatening systemic financial stability. Globalization of production processes has led to greater spillovers of economic fluctuations across borders, thereby complicating macroeconomic policy decisions.Working Paper
The COVID-19 Hardship Survey: An Evaluation of the Prihatin Rakyat Economic Stimulus PackageSam Flanders, Melati NungsariThe COVID-19 pandemic has caused a global crisis, and, while Malaysia has controlled the infection more than most countries with early exposure to the virus, the Movement Control Order (MCO) has required major economic sacrifices. This, in addition to a COVID-19-caused global economic slowdown, threatens a budget crisis for Malaysian households.Discussion
COVID-19 in Italy: an Analysis of Death Registry DataGabriele CiminelliWe analyze daily death registry data for a sample of 1,161 Italian municipalities in the 7 regions most severely hit by COVID-19. Daily deaths almost tripled in the first thirty days since the onset. Overall, COVID-19 might have killed 0.1% of the local population in just forty days. Working Paper