|
on Confederation of Independent States |
|
Issue of 2017‒03‒26
sixteen papers chosen by |
| By: | Zoryana Olekseyuk |
| Abstract: | Ukraine's revolution, Russia's continued aggression in Eastern Ukraine and the annexation of Crimea have drawn the world community's attention. Being in a situation of political and economic crises with high external and public debt, Ukraine is now in receipt of urgent and necessary economic assistance from the US, the EU, as well as various international organizations such as the International Monetary Fund (IMF) and the World Bank. The EU aims to strengthen Ukraine by integrating it to its huge common market. The already signed and ratified Association Agreement/Deep and Comprehensive Free Trade Area (AA/DCFTA) gives Ukraine a chance to increase its competitiveness on the world markets, attract new investments and get better access to the European market. However, a large number of reforms as well as economic modernization of Ukraine is needed for the implementation of this new type of agreement which involves more than just bilateral import tariff elimination. It additionally envisages the harmonization of Ukraine's regulations on competition policy, state aid, public procurement, sanitary and phyto-sanitary measures, technical regulations and service trade liberalization. In this paper we conduct a comprehensive analysis of the DCFTA's potential effects. Therefore, we look not only at tariff and nontariff measures (trade facilitation and non-tariff barriers), but also at liberalization of barriers to foreign direct investments in services in order to consider the full implications of the DCFTA and stress the importance of FDI. The analysis is helpful in providing the parties with valuable information about the transitional impacts. Furthermore, this will help to resolve the misunderstandings concerning the implementation of the DCFTA during the ongoing consultations between Ukraine, Russia and the EU, which are planned due to Russia's concerns to be negatively affected by this agreement. Analyzing different potential FTAs between Ukraine and the EU, Emerson et al. [2006], Ecorys & CASE-Ukraine [2007] and Maliszewska et al. [2009] show that the DCFTA would have a stronger positive impact on Ukraine's welfare compared to the simple one (incorporating tariff reductions only) where the effects are small or even slightly negative. Movchan & Giucci [2011] find a positive welfare effect up to 11.8% from the DCFTA with the EU, while the customs union with Russia, Belarus and Kazakhstan is unfavorable with a welfare loss of up to 3.7%. In the most recent study Balistreri & Olekseyuk [2014] analyze the potential effects of the DCFTA by implementing the following trade structures for services and manufactured goods: a.) a standard specification of perfect competition based on the Armington [1969] assumption of regionally differentiated goods; b.) monopolistic competition among symmetric firms consistent with Krugman [1980]; and c.) a competitive selection model of heterogeneous firms consistent with Melitz [2003]. This study illustrates a novel result that there is little danger of deindustrialization dominating the overall welfare gains as the welfare results under monopolistic competition are substantially lower compared to the standard Armington structure. This occurs because Ukraine intensifies production and exports of agriculture and other sectors which it has a traditional comparative advantage in, while the increasing returns sectors (producing under monopolistic competition) shrink in the face of the EU based import competition. However, the majority of previous studies does not include the liberalization of barriers to FDI in services. According to Tarr [2012], it is important to have a modeling framework which allows for analysis of this kind of liberalization due to the growing importance of services trade and FDI in services. Summarizing the results from different studies he finds that liberalization of barriers against FDI in services yields welfare gains several times larger than the usual estimates from traditional CGE models, which focus on goods trade. This occurs due to the fact that a reduction or elimination of FDI barriers in services sectors (e.g. telecommunication, banking, insurance, transportation and other business services) improves domestic firms' access to high-quality services and, consequently, leads to a reduction of costs of doing business, increases firms' productivity and improves the economy's competitiveness on the world markets (e.g. Ruthherford & Tarr [2006], Jensen & Tarr [2011]). Regarding Ukraine, Jensen et al. [2005] indicate that the aggregate welfare gains from Ukraine's WTO accession are mainly driven by the FDI reforms. They find a welfare increase of 2.3% from the reduction of barriers that discriminate against foreign services providers, whereas the average welfare effect amounts to 4.7%. Moreover, Shepotylo & Vakhitov [2012] show a strong positive impact on the productivity of Ukrainian firms from better access to services and from services liberalization. In particular, a standard deviation increase in services liberalization is associated with a 9% increase in the total factor productivity. Following this literature, we contribute to the ongoing discussion by analyzing the DCFTA between Ukraine and the EU in the new modeling framework combining the latest developments in trade theory (i.e., Melitz [2003]) with explicit consideration of foreign direct investments in business services. For this purpose we extend the GTAP based multi-region general-equilibrium simulation model developed by Balistreri & Olekseyuk [2014] allowing for the presence of multinational firms providing business services in Ukraine. This means that while in manufacturing foreign firms supply Ukrainian markets only on a cross-border basis, business services can be supplied by foreign firms both operating in Ukraine (FDI case) and abroad (cross-border supply). Therefore, we take not only the traditional gains from trade into account, but also: a.) the additional gains from new varieties due to monopolistic competition; b.) the aggregate productivity growth due to within industry reallocation of resources (according to the Melitz trade structure); c.) the productivity growth of the manufacturing sectors due to increased access to business services. This framework gives us a chance to find out whether the FDI consideration can mitigate or even eliminate the deindustrialization impact found by Balistreri & Olekseyuk [2014]. As EU firms are strongly engaged in the FDI flows to Ukraine (77.6% of Ukrainian FDI inflows are coming from the EU member countries), we find that simulating the DCFTA in this framework leads to an increase of the number of EU varieties while increasing demand for workers in Ukraine, which mitigates the aforementioned deindustrialization impact. Thus, our analysis illustrates the importance of the FDI part of the agreement and, therefore, gives some guidelines for the future reforms. |
| Keywords: | Ukraine, EU, CIS, General equilibrium modeling, Impact and scenario analysis |
| Date: | 2015–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:008007:8391&r=cis |
| By: | Jakovljevic, Mihajlo; Potapchik, Elena; Popovich, Larisa; Barik, Debasis; Getzen, Thomas E. |
| Abstract: | Global health spending share of low/middle income countries continues its long-term growth. BRICS nations remain to be major drivers of such change since 1990s. Governmental, private and out-of-pocket health expenditures were analyzed based on WHO sources. Medium-term projections of national health spending to 2025 were provided based on macroeconomic budgetary excess growth model. In terms of per capita spending Russia was highest in 2013. India's health expenditure did not match overall economic growth and fell to slightly less than 4% of GDP. Up to 2025 China will achieve highest excess growth rate of 2% and increase its GDP% spent on health care from 5.4% in 2012 to 6.6% in 2025. Russia's spending will remain highest among BRICS in absolute per capita terms reaching net gain from $1523 PPP in 2012 to $2214 PPP in 2025. In spite of BRICS' diversity, all countries were able to significantly increase their investments in health care. The major setback was bold rise in out-of-pocket spending. Most of BRICS' growing share of global medical spending was heavily attributable to the overachievement of People's Republic of China. Such trend is highly likely to continue beyond 2025. |
| Keywords: | BRICS; global health; health expenditure; trend; medical spending; emerging markets; future forecasts; projections |
| JEL: | I11 I15 |
| Date: | 2016–02–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:77221&r=cis |
| By: | Mikheev, Vasily (Russian Academy of Sciences (RAS) - Institute of World Economy and International Relations); Shvydko , Vitaly G. (Russian Academy of Sciences (RAS) - Institute of World Economy and International Relations) |
| Abstract: | Korean Abstract: 역사가 증명하듯이, 주요 경제자산을 모두 정부(공공부문)가 소유하고 정부부처가 제반 경제활동을 직접 관리하는 중앙계획식 경제모델은 변화하는 환경에 대한 적응력과 효율성이 떨어진다. 그렇기 때문에 과거 이 모델을 채택하였던 모든 구소련국가들과 중국 등 아시아 사회주의 국가들은 자본주의 경제모델로 전환하였다. 북한에서도 중앙계획식 경제모델은 공식경제의 악화와 위기를 낳았으며, 그 결과 점차 준시장경제체제가 자리잡고 있다. 하지만 공산주의 이데올로기의 공식적인 철폐나 사적영역의 합법화로 이어지지는 않고 있어 현재의 준시장체제는 대규모 부패의 온상이 되고 있다. 따라서 북한이 당국의 승인 하에 시장자본주의 체제로 전환하는 것은 불가능하지는 않지만 현재로서는 그 개연성이 작다고 할 수 있다. 이론적으로 체제전환은 적응을 통한 점진적 진화(중국식 모델)나 위기에 따른 급진적 전환(소련식 모델) 등 2가지 방식 중 하나의 경로를 밟게 된다. 첫 번째 시나리오는 최고지도층의 지도하에 정치, 경제, 사회적 충격을 최소화하면서 점진적이고 계산된 자유화 과정을 밟는 것을 의미한다. 두 번째 시나리오는 최고지도층이 필요한 변화를 지속적으로 지연시킴에 따라 결국 체제의 급진적 붕괴가 초래되는 상황을 의미한다. 북한의 현재 경제상황 및 제도와 1970년대말 중국, 그리고 1980년대 중반 소련의 상황을 비교해보면 향후 북한의 경제체제 전환은 소련식 모델을 따라갈 개연성이 큰 것으로 보인다. 산업에서 농업부문이 차지하는 비중이 상대적으로 작다는 점, 제조업 내 군수산업의 비중이 매우 크다는 점, 지도층이 사적 소유에 대해 매우 부정적 시각을 갖고 있다는 점, 그리고 모든 정치적 변화를 강하게 억제하고 있다는 점 등 현재 북한은 1980년대 중반 소련의 상황과 유사하다. 또한 최후 몇 년 동안 소련이 그랬던 것처럼, 북한 지도자들 역시 변화하는 현실과 비효율적인 구체제 간의 간극을 줄이기 위한 개혁에서 무능함을 보여주고 있다. 소련 지도자들은 이 간극을 겉치레와 부패로 채워 장기적으로 구체제의 붕괴를 필수불가결하게 만들고 말았다. 소련의 위기와 체제전환 후 경험을 바탕으로 향후 북한의 체제전환과 관련한 몇 가지 정책적 교훈을 얻을 수 있다. 첫째, 기업에 자율적 결정권을 양도하기 전에 먼저 시장규제를 법제화하고 관련기관을 설립해야 한다는 점이다. 둘째, 공적 재산이 사적인 이득을 위해 사용되지 않도록 사적-공적 재산의 구분을 뚜렷하게 설정해야 한다는 점이다. 셋째, 정부재산을 사유화하는 데서 현실에 맞는 적절한 모델을 선택하는 것이 매우 중요하다는 점이다. 넷째, 사회적 불안정이나 소요로 인해 체제전환 과정이 정체되거나 왜곡되지 않도록 구체제의 수혜자들을 포함해서 사회 모든 부문에게 기회의 창을 열어두어야 한다는 점이다. 마지막으로 중앙계획식 경제로부터의 전환과 근대화 과정이 곧바로 서구적 정치모델로의 전환을 의미하지는 않는다는 점이다. 자본주의 경제체제로의 성공적 전환을 위해서는 경제민주화가 필수적이지만 러시아의 경험이 보여주듯이 새로운 정치체제의 구축은 상당히 보수적인 과정이 될 수도 있다. (후략) English Abstract: Transition of North Korea to a capitalist market economy remains a probable though relatively distant possibility. The model of centrally planned economy based on government (public) ownership of all major economic assets and direct regulation of economic activities by authorized state bodies (usually termed "the Soviet model" by Russian economists) has revealed lack of efficiency and ability to adapt to changing conditions. For that reason it has been replaced with a capitalist economic model in all countries of the former Soviet bloc, as well as in China and other former "socialist countries" of Asia. This system has already led to degradation and actual crisis of official economy in North Korea and to its partial replacement with semi-legal quasi-market economy, which combines administrative distribution of major resources with private initiative and de-facto market distribution of an increasing number of products and services. As this has not led to official abandonment of communist ideology and legalization of private sector, the current quasi-market system includes wide-scale corruption as its vital integral part. The likely pattern of future transformation of North Korean economic system into a full-fledged capitalist market model is likely to be determined by the present state and structure of North Korean economy. Theoretically speaking, the process of transformation may take the form of gradual evolution through adaptation ('Chinese model'), or of acute crisis and abrupt replacement ('Soviet model'). The first of these two options implies gradual and measured liberalisation that would allow keeping political, economic and social situation in the country under control of the top leadership. The second one means that the necessary adaptation is constantly delayed by the authorities according to "too little, too late" scenario, which makes inevitable the collapse of old economic and political system. Comparison of the present economic situation and institutions in North Korea to that of China in the end of 1970's and that of the USSR in mid-1980's suggests that the future transformation of economic system in North Korea is more likely to follow the Soviet path. Commonalities include comparatively low share of rural economy, dominant position of military production in manufacturing industry, strong aversion of the leadership to the idea of private property, strong resistance to political change of any kind. Like in the case of the Soviet Union during last years of its existence, North Korean communist leaders demonstrate their inability to narrow the gap between changing realities and outdated ineffective institutions by implementing thought-out reforms. Instead, they cover the gap with pretence and corruption, thus making eventual collapse of the old economic and political system inevitable in the long run. (The rest omitted) |
| Keywords: | Economic Reform; Economy; North Korea; Centrally Planned Economy; Market Economy; Economic Transformation; Russia |
| Date: | 2015–12–30 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kieppa:2015_042&r=cis |
| By: | Vladimir Hlasny |
| Abstract: | Economic inequality across Asia has been growing, but dimensions of this inequality and their development are unclear. This paper evaluates income inequality using household surveys from China, India, Japan, Korea, Russia and Taiwan. These countries may be viewed as jointly representative of Asia’s population, covering countries with various income levels, inequality and demographic profiles. This study assesses income gaps between various demographic groups in regard to households’ residence, administrative region, education, employment status and gender at various income quantiles, using unconditional quantile regressions. Gaps are decomposed into parts due to differentials in household endowments and due to differentials in returns to endowments. Rural/urban income gaps are evident across all evaluated countries, particularly in China, India and Russia, but have been falling in Russia and Taiwan. Inequality between disadvantaged and advantaged regions is high in China and India, followed by Taiwan. This gap stagnated in Taiwan and further deepened in Russia. |
| Keywords: | Economic inequality; unconditional quantile regression; Blinder-Oaxaca decomposition; Asia; Luxembourg Income Study. |
| JEL: | D31 D63 N35 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:lis:liswps:691&r=cis |
| By: | Alexander Libman (Ludwig-Maximilians-University of Munich and ICSID, National Research University Higher School of Economics); Janis N. Kluge |
| Abstract: | Which incentives have the strongest impact on the size of the shadow economy? Is it about government’s pressure against entrepreneurs operating in this sector, or is it about the benefits of legality? The goal of this paper is to explicitly contrast the role of sticks (court repressiveness) and carrots (financial aid to small and medium-sized firms) as factors determining the size of the shadow economy, using the case of the Russian taxi market. It uses a unique dataset of taxi licensing data from regional transport departments and indicators for taxi market demand to estimate the extent of informal business. When controlling for market demand, it finds a strong and robust positive effect of sanctions on the size of the official market, with higher repressiveness leading to a smaller shadow economy. In contrast, the effect of carrots was insignificant. The results suggest that the effectiveness of carrot policies is compromised when entrepreneurs operate informally to avoid dealing with corrupt bureaucrats and have low trust in the government. |
| Keywords: | shadow economy; bureaucracy; corruption; development policy |
| JEL: | D73 D78 O17 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:ost:wpaper:364&r=cis |
| By: | Amat Adarov (The Vienna Institute for International Economic Studies, wiiw); Vasily Astrov (The Vienna Institute for International Economic Studies, wiiw); Rumen Dobrinsky (The Vienna Institute for International Economic Studies, wiiw); Vladimir Gligorov (The Vienna Institute for International Economic Studies, wiiw); Richard Grieveson (The Vienna Institute for International Economic Studies, wiiw); Doris Hanzl-Weiss (The Vienna Institute for International Economic Studies, wiiw); Peter Havlik (The Vienna Institute for International Economic Studies, wiiw); Mario Holzner (The Vienna Institute for International Economic Studies, wiiw); Gabor Hunya (The Vienna Institute for International Economic Studies, wiiw); Sebastian Leitner (The Vienna Institute for International Economic Studies, wiiw); Isilda Mara (The Vienna Institute for International Economic Studies, wiiw); Olga Pindyuk (The Vienna Institute for International Economic Studies, wiiw); Leon Podkaminer (The Vienna Institute for International Economic Studies, wiiw); Sandor Richter (The Vienna Institute for International Economic Studies, wiiw); Hermine Vidovic (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | Summary Growth in the CESEE economies will strengthen gradually, surpassing on average 3% by 2019. This growth will be driven by consumption and increasing investment, amid a largely supportive international economic environment. Despite a rise in ULCs, competitiveness will not be endangered. Although the size of labour forces in CESEE is stagnating, data indicate an improvement in educational levels of workers. Meanwhile the tightness of labour markets will propel wage growth. The CESEE region as a whole is back on a convergence track, with an average positive growth differential of 1.2 pp vis-à-vis the euro area over the forecast horizon. Downside risks are significant, mostly stemming from political factors. The CESEE countries and Europe more broadly, together with the rest of the world, will be haunted by the spectre of political uncertainty; it is only to be hoped that, once fully roused, the ‘animal spirits’ of economic agents will shrug off the gloom. For the economies of CESEE, the international economic environment appears generally positive. In 2017-2018, GDP growth in the euro area is expected to hover around 1.7%. The international financial markets have stabilised and the current economic mood is improving. Because of the global recovery, the US Fed is expected to increase interest rates further in 2017, while oil prices are likely to rise. In the EU, disbursements from the payments cycle of the European Structural and Investment Funds are only just beginning, indicating higher co-financed investments in the EU‑CEE countries from this year onwards. Over recent quarters, GDP growth throughout almost the entire CESEE region has stabilised in positive territory. The only exception is Belarus, where growth is still in negative territory (albeit less so than was the case in 2015). The country is going through a painful adjustment process triggered by accumulated macroeconomic imbalances and its excessive dependence on Russia. Current wiiw CESEE GDP growth forecasts for 2017-2019 point to growth of around 3% for most of the region, with a slightly upward trend. The EU-CEE sub-region and the Western Balkan economies in particular should manage to attain average GDP growth rates of up to 3% and in some countries, such as Hungary, Romania, Slovakia, Albania and Kosovo, the levels may be even higher. In Turkey, where growth slowed down markedly in 2016 to below 2% (down from around 6% in prior years) on account of the domestic political turmoil and deterioration in foreign relations, we also expect growth to be closer to 3% by the end of the forecast horizon. The CIS-3 economies will record increasing GDP growth rates, rising from more than 1% in 2017 to over 2% in 2019, given the higher oil prices. Over the same forecast period, economic growth in Ukraine is projected to accelerate gradually to 3% by 2018-2019 – barring all-out warfare in Donbas and abortion of the IMF programme. Private consumption and increasing investment will continue to be the main growth drivers over the forecast horizon. After the investment slump in 2016 attributable to the switch from the previous to the current EU (co-) financing period, investment in the EU-CEE economies will recover in the years ahead. Meanwhile the mood among consumers is improving and, due to changing spending patterns in the EU-CEE sub-region, this trend should prove durable. Tightening labour markets are conducive to major wage increases. Despite the general rise in unit labour costs, competitiveness does not seem to be endangered. Most of the latest industrial production figures for the CESEE countries are encouraging; they point to an ongoing improvement in industry structure and, in several cases, to re-industrialisation. Longer-term FDI trends hold particular promise for the Western Balkans. In Romania and Slovakia the prospects for future FDI increases are also quite good, especially in the automotive sector. Although the size of the labour force in CESEE countries is more or less stagnating, a marked improvement in education levels is evident, as a younger and better educated generation enters the work force. This hints at a potential general increase in labour quality across the region’s economies. Nevertheless, heightened uncertainties following the UK referendum on Brexit in June 2016 and the US presidential elections in November have cast a cloud over the improved economic conditions noted above. A number of worrying scenarios are quite conceivable that could ultimately make our forecasts appear upbeat and overoptimistic. Thanks to US President Donald Trump, a rise in global protectionism is possible, which would harm industry in the region. Mr Trump has also questioned post-war European security arrangements, thus causing consternation in some EU-CEE countries. Meanwhile, the growing irritation with the EU-CEE sub-region among some older EU Member States and the fallout from Brexit could possibly pose a threat to west-east fiscal transfers and the free movement of labour in their current forms. In the Western Balkans, any confrontational interventions by Russia and uncertainties as to developments in Turkey could prove quite disruptive, were the influence of the EU and USA in the region to decline. Increasing uncertainties in the CIS and Ukraine are mostly related to future commodity price developments (most importantly oil prices) and heightened geopolitical tensions. Three special sections of the forecast report shed more light on the issue of heightened uncertainties in the EU-CEE, the Western Balkans and the CIS+UA regions. |
| Keywords: | CESEE, economic forecast, Europe, Central and East Europe, Southeast Europe, Western Balkans, new EU Member States, CIS, Belarus, Russia, Ukraine, Kazakhstan, Turkey, growth convergence, political uncertainties, external risks, EU funds, investment, consumption-led growth, unemployment, employment, wage growth, inflation, competitiveness, industrial production |
| JEL: | E20 O47 O52 O57 P24 P27 P33 P52 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:wii:fpaper:fc:spring2017&r=cis |
| By: | Iskakov, Aziz |
| Abstract: | It is well known that the final result of any process depends on a number of its components: the source material, the production process itself, quality control and qualification of the performer, as well as internal and external factors. The present work is intended to consider these elements, as applied to the evaluation of the effectiveness of the administration of state programs. The production process is the implementation of program documents, while quality control is represented by monitoring and control functions. Under the staffing and its quality, we mean the employees of the body responsible for state planning and their qualifications. It should be noted that internal and external factors are not considered within the framework of this article. The hypothesis of this study is the assumption that the current system of state planning in Republic of Kazakhstan has a hidden development potential that is not realized due to the low level of qualification of the involved personnel. To prove the hypothesis, such research methods as comparative analysis and analysis of normative legal acts were used. During the course of this study a number of recommendations were developed, presented during the open discussion of the draft state program "Digital Kazakhstan-2020". The author of this article proposed 21 proposals for changes in the system of target indicators, proposed projects and activities, as well as the formats for their implementation. 18 of them were adopted positively and included in the draft state program. |
| Keywords: | monitoring, evaluation, project management, program management, public administration |
| JEL: | H43 H83 O38 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:77570&r=cis |
| By: | Belke, Ansgar; Dreger, Christian; Dubova, Irina |
| Abstract: | The financial crisis led to a deep recession in many industrial countries. While large emerging countries recovered relatively quickly from the financial crisis, their performance deteriorated in the recent years, despite the modest recovery in advanced economies. The higher divergence of business cycles is closely linked to the Chinese transformation. During the crisis, the Chinese fiscal stimulus prevented a decline in GDP growth not only in that country, but also in resource‐rich economies. The Chinese shift to consumption‐driven growth led to a decline in commodity demand, and the environment became more challenging for many emerging markets. This view is supported by Bayesian VARs specified for the BRIC (Brazil, Russia, India, and China) countries. The results reveal a strong impact of international variables on GDP growth. In contrast to the other countries, China plays a crucial role in determining global trade and oil prices. Hence, the change in the Chinese growth strategy puts additional reform pressure on countries with abundant natural resources. |
| Keywords: | Business cycle divergence,Chinese transformation,Bayesian VARs |
| JEL: | F44 E32 C32 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:37&r=cis |
| By: | Lukáš Rečka; Milan Ščasný |
| Abstract: | What is the optimal strategy for the Czech energy sector: Stay by brown coal dominance, build new nuclear power reactors or increase the share of natural gas and renewables? Will it be profitable to build two new nuclear reactors and to open new brown mines with parallel investments into current and new brown coal power and CHP plants at the same time? We try to find the answer to these highly topical questions. A public tender process for contractors to build two new nuclear reactors was cancelled in its final stage in April 2014. But there is a plan to open new tender in 2016. At the same time, public and political discussion about opening new brown coal mines is back in the game. This is all occurring in a situation when power market prices are at their long term minimum. Monthly average baseload power prices are in a downward trend since 2012 August and since the second quarter of 2013 they have been fluctuating slightly above the level of 30 €/MW. Neither increasingly important role of renewables in the power mixes of many European countries nor the low carbon prices bring incentives for significant rise of the power price in the near future. In the Central and Eastern Europe and in the Czech Republic as well, only a few partial equilibrium or CGE models with special focus on energy sector have been applied so far (Rečka & Ščasný, 2013, Ščasný, et al., 2009), therefore we construct partial equilibrium, Czech energy model in TIMES model generator (Filar & Haurie, 2010) taking into account externalities from emitting classical air pollutants and CO2 during heat and power generation. We quantify the externalities using so called ExternE method (see for instance Weinzettel et al., 2012) and incorporate their monetary values into the model objective function. We assess several policy and market development scenarios to bring more light into the strategic decision making about new energy sources in the Czech Republic. We use TIMES model generator (Filar & Haurie, 2010) to construct partial equilibrium model of Czech energy sector with detail technological structure. We quantify the externalities from emitting classical air pollutants and CO2 during heat and power generation using the so called ExternE method (see for instance Weinzettel et al., 2012) and incorporate them into the model objective function. This approach allows us to internalise the externalities from heat and power generation. The model includes the interconnection with and the import and export of electricity is an endogenous variable depending on power spot market price. In our scenarios, we focus on remaining brown coal reserves in currently operating mines and brown coal reserves available only after opening new coalmines that has been prohibited by a government resolution since 1991. Allowing or not allowing construction of two new nuclear reactors is second important dimension for our scenarios (It is more or less political decision because the government owns the majority in the largest power company in the Czech Republic that is supposed to build the new nuclear reactors.). We take into account the new 2030 framework for climate and energy policies agreed on 23 October 2014 by the EU leaders. Last set of important scenario parameters includes subsidy for renewable energy sources, fuels and carbon prices development. We compare our baseline scenario assuming current and ongoing environmental regulation and no restriction on new nuclear power plants with scenarios assuming introduction of proposed environmental regulation; relaxing the prohibition of opening new brown coalmines; and continuation of new renewable energy sources subsidizing. A special scenario reacts on a possible threat of the natural gas deliveries from Russia via Ukraine. We provide a sensitivity analysis on European power, fuels and carbon prices for all scenarios.The preliminary results show that: 1) The price of CO2 allowances is the main factor for decision about installation of new nuclear power plant. From €20 per ton of CO2 it is reasonable to build new nuclear power plant 2) It is not necessary to open new brown coal mines to satisfy the Czech’s power demand even without the construction of new nuclear reactors. However, it will be highly recommended to introduce regulatory measures on the usage of the brown coal from the operating brown coal mines to avoid destabilization of district heating sector if no new coal mines open; 3) Future advanced renewable technologies (mainly wind and biomass) will be competitive without any submissions. The final results will provide projection of emissions and optimal fuel mix and technology portfolio under the assumptions defined in each scenario. Based on these results and sensitivity analysis, we will provide a policy recommendation for optimal energy policy of the Czech Republic. |
| Keywords: | The Czech Republic and its interconnection with neighbouring countries., Forecasting and projection methods, Energy and environmental policy |
| Date: | 2015–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:008007:8510&r=cis |
| By: | Inui , Tomohiko (Gakushuin University); Kwon , Hyeog Ug (Nihon University) |
| Abstract: | Korean Abstract: 남북한의 통일은 통일한국에 엄청난 인프라투자 수요를 가져올 것임에 틀림없다. 새롭게 창출되는 거대한 투자수요는 2008년 글로벌 금융위기와 중국의 경제성장 둔화로 심각한 수요부족 상태에 놓여있는 한국경제에 재도약의 기회를 제공할 것으로 예상된다. 한국경제뿐만 아니라 한국과 경제적으로 긴밀한 관계를 갖고 있는 일본, 중국, 미국, 그리고 러시아에도 큰 이익을 줄 것으로 전망된다. 본 연구는 신고전파의 솔로경제성장 모형과 국제 산업연관표를 이용하여 통일 후 북한지역에 대한 인프라투자가 북한의 경제성장과 일본, 중국, 미국, 그리고 러시아에 미치는 영향을 실증적으로 분석하였다. 본 연구로부터 얻은 주요한 결과는 다음과 같다. 첫째, 남북한 통일 이후 북한지역의 급속한 경제성장을 위해서는 방대한 인프라 투자가 필수불가결하다는 것을 알 수 있었다. 인프라 정비에 착수하면 통일 후 북한지역은 빠른 시간(20년) 안에 현재의 한국경제 수준을 따라잡을 수 있다. 둘째, 북한지역 인프라 정비에 필요한 방대한 자금 수요를 통일한국의 저축만으로 조달할 수는 없다는 것이다. 그 간극을 메우기 위해 일본이 자금과 기술의 제공자로서 중요한 역할을 해야 한다는 점을 보였다. 셋째, 북한지역에 대한 인프라투자의 증가가 한국뿐만 아니라 일본, 중국, 러시아, 그리고 미국에 상당한 산출 증가를 가져올 것이라는 점을 분명히 하였다. 북한지역에 대한 인프라투자가 각 국의 산출 증가에 미치는 효과는 한국보다 일본, 중국, 러시아, 미국이 더 크다는 점을 알 수 있었다. 특히, 서비스 산업에서의 산출 증가 효과가 현저한 미국이 최대 수혜자로 예상된다. 남북한 경제의 통일은 현재의 한국이나 북한의 경제발전뿐만 아니라 주요 주변국이나 세계경제의 성장에 크게 공헌할 것이다. 본 연구의 분석은 다음과 같은 한계를 가지고 있다. 첫째, 가장 큰 한계는 현재의 북한 경제에 관한 데이터 부족이다. 북한에 관한 정확한 정보 없이는 인프라투자의 효과를 올바르게 계측하는 것은 극히 어려운 일이다. 북한 내부로부터 정확한 데이터를 얻는 것은 어려우므로 우선 인구나 건강 조사와 같이 국제기관과 협력하여 정확한 상황을 파악할 수 있는 데이터를 확보할 필요가 있다. 본 연구와 같은 인프라 정비의 상황에 관해서는 세계은행이나 그 외의 개발금융기관과 협력함으로써 보다 정확한 정보를 얻을 수 있을 것으로 생각된다. 특히 전력·교통 관련 인프라 데이터가 중요하다. 또한 북한과 중국·러시아와의 교역 데이터를 확보할 필요가 있다. 수출·수입 데이터는 북한의 경제상황을 가장 잘 반영하는 데이터이므로 공식적인 교역뿐만 아니라 비공식적으로 행해지고 있는 교역에 대해서도 중국·러시아 정부나 민간 기관과 협력하여 조사할 필요가 있다. 나아가 수집한 데이터를 이용하여 국민경제 계산, 산업연관표, 물가지수와 같은 기본적인 통계 데이터 베이스를 산업·품목별로 상세하게 구축해야 한다. 이처럼 북한의 경제상황을 파악할 수 있는 데이터 베이스를 구축할 수 있다면 인프라 정비가 가져오는 효과를 보다 정확하게 계측할 수 있고, 어떠한 정책이 보다 효과적인지에 대해 논의할 수 있을 것이다. (후략) English Abstract: Unification of the two Koreas will no doubt bring about massive demands for infrastructure investment in the unified Korea. The newly created mass scale investment demand is predicted to provide a new opportunity for South Korea’s economic growth, which is currently facing serious lack of demand due to the 2008 Global financial crisis and China's economic slowdown. We also predict that this would not only benefit South Korea, but also benefit countries that have close ties with South Korea such as Japan, China, US and Russia. This research adapts Solow's neoclassical growth model and inter-industry relationship table and empirically analyzed how fast North Korean economy would grow after unification through infrastructure investment in the North Korean region and how such infrastructure investment would affect not only South Korea but also Japan, China, US and Russia. The main findings of this research are as follows: First, we found that for rapid economic growth in the North after unification there must be massive amounts of infrastructure investment. Once they begin building infrastructure, the Northern region will be able to catch up to South Korea’s current level of economic development (in 20 years). Second, the massive demand for funding needed for necessary infrastructure building which is a must in order for unified Korea to achieve economic growth in the Northern region cannot be procured only through domestic savings in unified Korea. To fill this gap we believe Japan has an important role as a provider of funds and technology. Third, we showed that the massive increase in infrastructure investment in North Korea will bring about big increase in output in not only South Korea but also Japan, China, Russia and the US. Results show that increase in infrastructure demand in North Korea will result in higher output increase effects in Japan, China, Russia and the US than in Korea. In particular, the US was the biggest beneficiary of output increase effects in the service industries. It is evident that economic integration of the two Koreas will not only contribute to economic growth of current South or North Korea, but also to the growth of neighboring countries or the world. There is no doubt that there are many limitations in this research, as listed in the following: First, the biggest limitation in analyzing the effects of the Korean unification is the lack of North Korea's economic data. Without exact information on North Korea it is extremely difficult to have a correct estimate of the effects of infrastructure investment. Since it is difficult to obtain accurate data from within North Korea, we need to obtain accurate data through partnerships with international organizations that collect data related to population and health. We believe that through collaboration with development financial institutions such as the World Bank, we would be able to obtain more accurate information regarding infrastructure building situation used in this research. In particular, data on infrastructure building data related to electricity and transportation is important. After that, we also need to obtain information on trade between North Korea and its major trading partners such as China and Russia. Import and export data well reflect North Korea’s economic situation and therefore there needs to be cooperative investigation between Chinese and Russian governments and civilian institutions that have access to not only official trade but also unofficial trade statistics. In order to accurately understand and analyze North Korean economy through the obtained current data we need to create a detailed database consisting of system of national accounts, inter-industry relation table, and price index categorized by industry and by product. If we are able to create such a database that would enable us to understand North Korea’s current economic situation we will be able to more accurately estimate the effects of infrastructure establishment as well as discuss what kind of policies would be effective. (The rest omitted) |
| Keywords: | Economic Reform; Economy-North Korea; Infra Investment; North Korea; Japan |
| Date: | 2015–12–30 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kieppa:2015_041&r=cis |
| By: | Eduardo da Motta e Albuquerque (Cedeplar-UFMG) |
| Abstract: | This paper evaluates contemporary Russia's variety of capitalism. This variety of capitalism - peripheric, state-led, oligarchic and with managed democracy - resulted from a transition based on shock terapies. The choice of the type of transition was conditioned by the nature of the crisis of the command economy in the 1980s. This crisis was a result of inner contradictions of the command economy built between 1929 and 1953. This command economy generated a limited catch up process, industrialized the economy with great human cost, delivering a relatively backward economy with strong military capabilities. This paper reviews four issues: the nature of the economic system between 1929 and 1985, the critical point that ended the command economy in late 1980s, the type of transition and the main features of the variety of capitalism that emerged as a consequence of those processes. |
| Keywords: | Russia, command economy, types of transition, variety of capitalism |
| JEL: | P0 P2 P5 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:cdp:texdis:td541&r=cis |
| By: | Belyaeva, Maria; Bokusheva, Raushan |
| Abstract: | We conduct an examination of the climate effect to analyze the historical dependence of grain production on temperatures and precipitation levels, and project this dependence to estimate the productivity of different grain types in the mid- and long-terms, given four greenhouse gas concentration pathways. We find that altering temperatures have an equivocal effect on agriculture. The most productive zones of the southern black soil belt is projected to face considerable declines in yields, due to insufficient precipitation levels and high probability of heat waves during the summer vegetation period. The northern part, on the contrary, can experience increases in productivity as a result of milder and drier winters and warmer springs. |
| Keywords: | Russia,grain production,climate change,Russland,Getreideproduktion,Klimawandel |
| JEL: | Q12 Q16 Q54 P32 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iamodp:161&r=cis |
| By: | Mogilevskii, Roman; Abdrazakova, Nazgul; Bolotbekova, Aida; Chalbasova, Saule; Dzhumaeva, Shoola; Tilekeyev, Kanat |
| Abstract: | Kyrgyz agriculture experienced substantial reform during the 1990s and early 2000s. Subsequently, the pace of reform slowed and at present the government does not appear to have any clear strategy for further development in the sector. Summarizing the outcomes of these reforms, a certain freedom granted to farmers stands out as one of the main achievements and an important reason for the sector's efficiency. Peasant farms are effectively protected from attempts to administratively regulate crop structure or introduce any other types of market distortions. However, an insufficient level of investments is undermining long-term prospects for development in the sector. Supporting large professional players in the sector is one of the key policy priorities of the government. It is however necessary to provide space for these enterprises to emerge on their own. It is additionally important to ensure that any support policies in favor of such players also provide positive spillovers to the small farmers around them, and do not aim at replacing them mechanically. The list of incomplete policy reforms is very long, especially in the area of natural resource management and provision of other essential public goods. The state of pastures and irrigation systems is alarming and requires government support well above its current level. Understanding the key areas for government intervention and focusing interventions on public goods provision should be the key components of a future agricultural development strategy. |
| Keywords: | farm restructuring,agricultural productivity,irrigation,pasture reform,agricultural policy,Kyrgyzstan,Landwirtschaftliche Umstrukturierung,landwirtschaftliche Produktivität,Bewässerung,Bodenreform,Agrarpolitik,Kirgistan |
| JEL: | P41 P47 Q15 Q18 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iamodp:162&r=cis |
| By: | Mehmet Balcilar (Department of Economics, Eastern Mediterranean University, Northern Cyprus, Turkey); Deven Bathia (Queen Mary University of London, School of Business and Management, London, United Kingdom); Riza Demirer (Department of Economics & Finance, Southern Illinois University Edwardsville, Edwardsville, USA); Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, South Africa) |
| Abstract: | This paper provides a novel perspective to the predictive ability of credit rating announcements over stock market returns and volatility using a novel methodology that formally distinguishes between different market states that can be characterized as bull, bear and normal market conditions. Using data on the credit rating announcements published by the three well-established credit rating agencies and data on BRICS and PIIGS stock markets, we show that the stock markets react heterogeneously, and in quantile-specific patterns, to ratings announcements with more persistent and widespread effects observed for PIIGS stock markets. The effect of rating announcements is generally stronger and more widespread in the case of volatility of returns, implying significant risk effects of these announcements. Finally, we show that the results of the aggregate ratings are driven mostly by rating upgrades rather than downgrades, implying asymmetry in the predictive ability of ratings announcements during good and bad times. Overall, our findings show that predictive models can be greatly enhanced by disaggregating the overall rating announcements and taking into account nonlinearity in the relationship between ratings announcements and stock return dynamics. |
| Keywords: | Stock Markets Returns and Volatility, Credit Ratings, Nonparametric Quantile Causality, BRICS, PIIGS |
| JEL: | C22 G15 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:201719&r=cis |
| By: | Bruno Dallago (Dipartimento di Economia e Management, University of Trento) |
| Abstract: | This paper considers the findings of academic studies and research on entrepreneurship and looks at what explains the evolution of entrepreneurship in post-transformation countries. Posttransformation countries include Central and Eastern Europe (CEE), the Commonwealth of Independent States (CIS) and other former socialist countries in Europe and former Soviet Asia. The paper shows that there are differences between these countries, even those integrated in the European Union (EU), and the most developed countries of Western Europe and North America. Perhaps less obvious, differences are significant and growing between the countries that are now integrated in the European Union and those that follow a different path. The paper shows that these differences are only in part of policy nature and tend to acquire systemic nature and have great influence over the features and role of entrepreneurship. The paper stresses the importance of entrepreneurship for former transformation countries and shows that the features and role of entrepreneurship and the entrepreneur are not invariant to the context where they arise and act. This is true in general, but is particularly so in the case of systemic change and is largely dependent on the quality of institutions. The study of entrepreneurship is important to highlight similarities and assess and explain differences and divergence among countries. |
| Keywords: | entrepreneur, entrepreneurship, institutions, post-transformation, transformation, Central and Eastern Europe, Commonwealth of Independent States Selection Bias, Russia |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:kyo:wpaper:968&r=cis |
| By: | Harrison, Mark (The University of Warwick) |
| Abstract: | This paper reviews two decades of research on the political economy of secrecy, based on the records of former Soviet state and party archives. Secrecy was an element of Soviet state capacity, particularly its capacity for decisiveness, free of the pressures and demands for accountability that might have arisen from a better informed citizenry. But secrecy was double-edged. Its uses also incurred substantial costs that weakened the capacity of the Soviet state to direct and decide. The paper details the costs of secrecy associated with “conspirative” government business processes, adverse selection of management personnel, everyday abuses of authority, and an uninformed leadership. |
| Keywords: | abuse of authority, adverse selection, censorship, military outlays, secrecy, state capacity, transaction costs, trust JEL Classification: N44, P37 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:312&r=cis |