nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2017‒06‒18
four papers chosen by

  1. Should Developing Countries Establish Petroleum Funds? By Ragnar Torvik
  2. Monthly Report No. 12/2016 By Vasily Astrov; Rumen Dobrinsky; Julia Grübler; Leon Podkaminer
  3. Kyrgyz Republic; Third Review Under the Three-Year Arrangement Under the Extended Credit Facility, and Request for Modification of Performance Criteria-Press Release; Staff Report By International Monetary Fund
  4. Recovery amid Stabilising Economic Growth By Gabor Hunya; Monika Schwarzhappel

  1. By: Ragnar Torvik
    Abstract: Many natural-resource-abundant countries have established petroleum funds as part of their strategy to manage their resource wealth. This paper examines reasons that such funds may be established, discusses how these funds are organized, and draws some policy lessons. The paper then develops a theory of how petroleum funds may affect the economic and political equilibrium of an economy, and how this depends on the initial institutions. A challenge with petroleum funds is that they may produce economic and political incentives that undermine their potential benefits. An alternative to establishing petroleum funds is to use revenues to invest domestically in sectors such as infrastructure, education, and health. Such investments have the potential to produce a better economic, as well as institutional, development. This is particularly the case if the initial institutions are weak.
    Keywords: Fiscal policy, Extractive industries, Resource curse, Sovereign wealth fund
    Date: 2017–04
  2. By: Vasily Astrov (The Vienna Institute for International Economic Studies, wiiw); Rumen Dobrinsky (The Vienna Institute for International Economic Studies, wiiw); Julia Grübler (The Vienna Institute for International Economic Studies, wiiw); Leon Podkaminer (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: Graph of the month Gross domestic product per capita at purchasing power parities, 2015 (p. 1) Opinion corner What has triggered the current political turbulence in Bulgaria and will that have economic consequences? (by Rumen Dobrinsky; pp. 2-3) Policy dilemmas for the Russian economy (by Vasily Astrov; pp. 4-8) The role of price sensitivity in evaluating the effects of trade policy instruments (by Julia Grübler; pp. 9-14) Inflation and unit labour costs in Central and East European EU Member States (by Leon Podkaminer; pp. 15-20) Recommended reading (p. 21) Statistical Annex Monthly and quarterly statistics for Central, East and Southeast Europe (pp. 22-43)
    Keywords: GDP at PPP, convergence, Bulgaria, elections, Russia, economic policy, Putin, price sensitivity, effects of trade policy instruments, inflation, unit labour costs, CEE
    Date: 2016–12
  3. By: International Monetary Fund
    Abstract: After a difficult start of the year, pressures on the economy are moderating, helped by a stabilizing regional context. Growth, however, is expected to remain lower for longer, making adjustment policies even more important. While the appreciation of the exchange rate, together with the Public Investment Projects rescheduling, has reduced debt vulnerabilities, risks to the debt outlook persist. The authorities are taking additional efforts to adhere to the 2016 fiscal targets, but are asking for a relaxation of the 2017 targets given an improved debt outlook and a still weak economy. Despite declining dollarization, financial sector vulnerabilities remain high.
    Date: 2017–06–02
  4. By: Gabor Hunya (The Vienna Institute for International Economic Studies, wiiw); Monika Schwarzhappel (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: The economic environment for foreign direct investment (FDI) has improved. A cautious upturn in economic activities across the Central, East and Southeast European (CESEE) region is based on expanding private consumption. Investments have started to recover, increasing opportunities for foreign business. Also, the most important foreign markets for CESEE products in Europe and overseas have stabilised, albeit amid increasing uncertainty. The CESEE region has maintained its cost competitiveness, despite surging wages and occasional labour shortages, by benefiting from considerable productivity improvements. FDI inflows to the CESEE countries increased by 45% in 2016, compared with the revised 2015 data. The invested amount of EUR 90 billion is the highest since 2008, marginally surpassing the inflows reported in 2011 and 2012. The 2016 recovery was 23% in the EU’s Central and East European region and almost 150% in the Commonwealth of Independent States (CIS) and Ukraine; meanwhile the Western Balkans and Turkey booked a decline of 25%. The 2016 changes were in just the opposite direction to 2015, when FDI in the Western Balkans and Turkey boomed, while it declined in the other two regions. A special section of this report analyses the position of Austria as investor and investment destination for CESEE countries. A separate section presents new features of greenfield investments in 2016 an increasing number of projects and higher capital investments that increasingly focused on the manufacturing sector. Forecasts for FDI in 2017 point upwards again, because the international environment is positive, although plagued by uncertainties, and also economic growth in most of CESEE is bound to be more robust than in the previous year. The second part of this report contains two sets of tables Tables I cover FDI flow and stock data, FDI flows by components and related income; Tables II provide detailed FDI data by economic activity and by country. The main sources of data are the central banks of the individual Central, East and Southeast European countries. The section ‘Methodological Explanations’ highlights important recent changes in reporting standards and their application in the wiiw FDI Database and wiiw FDI Report. The wiiw FDI Database is available online This online access with a modern query tool supports easy search and download of data. The wiiw FDI Database contains the full set of FDI data with time series starting form 1990 as far as available. Access to wiiw FDI Database
    Keywords: foreign direct investment, balance of payments, FDI by form, income repatriation, statistics, new EU Member States, Central Europe, Southeast Europe, Western Balkans, China, Turkey, CIS, Russia, Ukraine
    JEL: C82 F21 O57 P23
    Date: 2017–06

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.