nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2020‒05‒25
seven papers chosen by

  1. Patterns and drivers of household income dynamics in Russia : The role of access to credit By Perugini, Cristiano
  2. Measuring the Debt Service Ratio in Russia: micro-level data approach By Anna Burova
  3. Концентрация и конкуренция в современном банковском секторе Сербии: анализ индексов концентрации By Bukvić, Rajko
  4. Azerbaijan’s Contribution to the Chinese Belt & Road Initiative By Babayev, Bahruz; Ismailzade, Fariz
  6. Patterns of regional agri-food trade in Asia By Diao, Xinshen; Li, Ruoxin
  7. Exploring options to measure the climate consistency of real economy investments: The transport sector in Latvia By Alexander Dobrinevski; Raphaël Jachnik

  1. By: Perugini, Cristiano
    Abstract: The microeconomic drivers of medium- and short-term income mobility in Russia over the period 1996–2016 are investigated using data from the Russian Longitudinal Monitoring Survey (RLMS). Focusing on the role of access to credit in triggering household income growth, the descriptive analysis suggests that high levels of mobility materialising in pro-poor patterns of growth may accompany Russia’s notoriously high levels of inequality. Controlling for other personal and household characteristics, the econometric model for drivers of income mobility indicates that access to credit boosts income mobility. Complementary empirical evidence suggests that this effect may unfold through channels related to the labour market and non-labour sources of income.
    JEL: D31 H81 J60 O15
    Date: 2020–05–07
  2. By: Anna Burova (Bank of Russia, Russian Federation)
    Abstract: A new micro-level database was used to estimate the debt service ratio (DSR)for the private non-banking sector in Russia. This is the first work presenting a loan-based DSR estimate for Russia. The micro-level database contains information on the remaining maturities and lending rates for each loan issued in 2017–2019 by resident banks to the private non-banking sector in Russia. Estimated levels of the DSR were considerably higher than previous results obtained with the assumptions of constant maturity structure and prevailing lending rates. New results revealed that the aggregate assumptions are not sufficiently granular. Utilisation of actual remaining maturity at each estimation point improved the accuracy of DSR estimates by 10 p.p. (from 16% to 26% for 2019 Q4). The loan-level database provides new insight into the composition of the corporate debt servicing burden in Russia: prevalence of domestic currency loans, higher debt servicing cost for debt with shorter remaining maturity, and the sectoral heterogeneity of the DSRs.
    Keywords: DSR, debt servicing burden, micro-level database, credit registry.
    JEL: E44 F34 G21
    Date: 2020–05
  3. By: Bukvić, Rajko
    Abstract: Russian. В статье анализируется степень концентрации и конкуренция в современном банковском секторе в Сербии, в частности в годах 2016-2019. Анализ обоснован на финансовых отчётах банков. Использованы традиционные показатели концентрации (CRn и HH индексы) и индекс Джини, и сравнительно редко пользованные индексы Линда. Степень концентрации вычислялся на основе пяти величин: совокупные активы, депозиты, капитал, оперативные доходы банков, и кредиты. Показано, что среди сравнительно большого числа банков в Сербии существующий степень концентрации сравнительно низкий, что созидает условия для развития здоровой конкуренции между ними. Ключевые слова: концентрация, конкуренция, банковский сектор, Сербия, индексы Линда, Херфиндаль-Хиршман индекс, Джини коэффициент English. The paper analyzes the degree of concentration and competition in modern Serbian banking sector, particularly in the years 2016-2019. The analysis is based on bank financial statements. It uses the traditional concentration indicators (CRn and HH indices) and Gini index, as well as the relatively rarely used Linda indices. The concentration degree is calculated based on five variables: total assets, deposits, capital, operating income of banks, and loans. It has been demonstrated that in the case of the relatively large number of banks in Serbia, the existing concentration degree is relatively low, which provides suitable conditions for the development of healthy competition among them. However, the approximation of the indices to moderate concentration within the period analyzed warns of the appearance of oligopoly.
    Keywords: концентрация, конкуренция, банковский сектор, Сербия, индекс концентрации, индекс Хиршман-Херфиндаль, Джини коэффициент, коэффициент Тайдмана-Холла, индексы Линда, неоднозначность результатов, concentration, competition, banking sector, Serbia, concentration index, Herfindahl-Hirschman index, Gini coefficient, Tideman-Hall coefficient, Linda indices, unequivocal results
    JEL: C38 G21 L10
    Date: 2020
  4. By: Babayev, Bahruz; Ismailzade, Fariz
    Abstract: The Belt and Road Initiative (BRI) was initiated by the Chinese government in 2013 to promote regional trade and increase Chinese political and economic presence in the region. The main instrument for realising the ambition of this initiative is the Chinese provision of financial support to the countries located on the Ancient Silk Road to implement infrastructure projects. It includes the construction of roads, railroads, seaports, logistic centres, and communication facilities. Azerbaijan is a BRI partner country in the South Caucasus strategically located between Asia and Europe. It can play the role of a strategic partner and hub connecting China with the Middle East and Europe. The paper finds out that China accepts Azerbaijan as a reliable partner. Azerbaijan perceives BRI as a promising initiative. The Azerbaijani government has a political will and the capacity to contribute to the BRI. By offering some key recommendations, the paper concludes that China and Azerbaijan should closely work to strengthen the BRI's influence in Central Asia and South Caucasus and priorities the Trans-Caspian International Transport Route (TITR) passing through Azerbaijan.
    Keywords: Belt & Road Initiative, China, Azerbaijan, integration, trade, and investment
    JEL: F15
    Date: 2020–05–13
  5. By: Abuselidze, George
    Abstract: The main function of the state in nowadays-civilized world is to maintain the macroeconomic proportions throughout the country and avoid financial and economic crisis in regions that have priority in the formation of the new economic system in Georgia. The object of the research is the formation and use of Budget policy of Georgia; One of the most problematic places is socio-economic development of territorial units. As a result of the research it is shown that current economic and political system’s radical transformation process, creation of new economic system and ensuring its efficiency, requires mobilization of huge financial resources, which is impossible without proper functioning of the financial mechanism. This in turn requires implementation of sufficient financial and economic policy. The government should take responsibility of supporting financial-economic independence for territorial units. In the future, the proposed forms of financial mechanisms and features of use for the arrangement and territorial integrity of the government.
    Keywords: Fiscal policy; State and local budget; Intergovernmental relations; Forms of financial mechanisms; Georgia
    JEL: E62 H61 H72 H75 H76 H77
    Date: 2019
  6. By: Diao, Xinshen; Li, Ruoxin
    Abstract: This paper analyzes the implication of economic structural change and dietary transformation on changing patterns of agri-food trade among 17 Asian development countries. Sub-regional trade in Central, South, and Southeast Asia is the focus of the paper, along with trade with other partners outside the sub-regions. The paper finds that Asian markets for total agri-food exports and exports of nutritious foods are generally more important than the markets outside of Asia and for many of them, the importance of Asian markets increases over time. While net exporters and importers co-exist in each sub-region, with a few exceptions, sub-regional trade is often less important. Many small countries trade only with one or two large neighbors and less so with each other. The dietary transformation impacts trade in nutritious foods in diverse ways. With income growth, increased domestic demand for nutritious foods seem to lead to more imports of these foods. While many South and Southeast Asian countries have a comparative advantage in exports of some nutritious food products, growth in these exports can be negatively affected by rising domestic demand. Although nutritious food exports continue to play important roles in total agri-food exports, export growth of nutritious food is often slower than overall growth of agri-food exports. The dietary transformation also seems to lead to increases in demand for processed foods which many Asian countries meet through imports, often, accounting for a large component of total agri-food imports. On the other hand, processed foods generally account for a small portion of agri-food exports. However, there are a few countries where processed food export growth is rapid. In these cases, the sub-regional market is expanding, but with few exceptions, it is still less important than trade with countries outside the sub-regions. The paper also finds that agri-food exports and imports are highly concentrated, and a small group of commodities dominate most countries export and import portfolios and remain unchanged over time. The main markets for these important commodities are generally not in the sub-regions and this mismatch between demand and supply of agri-food commodities within sub-region is a natural barrier for promoting regional trade. The modified trade complementary index developed in this paper is based on Michaely (1996) and shows that trade complementarity measures are positively correlated with actual bilateral trade. Small countries tend to enjoy higher levels of complementarity with one or two large trading partners than with other small countries in the same sub-region. This implies that small countries could be better off from bilateral trade arrangements with large partners compared to a regional trade agreement within the sub-region. Because the sub-regional market is oftentimes not large enough to meet large countries’ import demand or consume their export supply, regional trade agreements within sub-regions may be less likely to serve their needs for trade expansion than negotiating with large trading partners outside the sub-regions. While many Asian developing countries’ governments have been pushing for trade diversification and want to reduce export dependencies concentrated on one or two large trading partners, this paper shows the challenges to achieve this policy goal. For small countries, focusing on bilateral trade arrangements with their dominant trading partners seems to be a more practical and effective strategy than regional trade agreements within sub-regions. Long-term trade arrangements, consistent trade policies, and various preferential trade arrangements should be pursued by small countries with their larger trading partners to promote agri-food exports.
    Keywords: BANGLADESH; SOUTH ASIA; ASIA; INDIA; SRI LANKA; NEPAL; PAKISTAN; INDONESIA; SOUTHEAST ASIA; SOUTH EAST ASIA; CAMBODIA; LAO PEOPLE'S DEMOCRATIC REPUBLIC; INDOCHINA; MYANMAR; BURMA; MALAYSIA; PHILIPPINES; THAILAND; VIET NAM; VIETNAM; KAZAKHSTAN; KYRGYZSTAN; TAJIKISTAN; UZBEKISTAN; CENTRAL ASIA; agrifood sector; trade; exports; diet; nutrition; economic growth; imports; processed foods; trends; agri-food; agri-food trade; nutritious foods; nutritious food exports; agri-food export commodities; export commodities
    Date: 2020
  7. By: Alexander Dobrinevski (OECD); Raphaël Jachnik (OECD)
    Abstract: Mitigating climate change requires aligning real economy investments with climate objectives. This pilot study measures the climate consistency of investments in transport infrastructure and vehicles in Latvia between 2008 and 2018, estimated at EUR 1.5 billion per year on average. To do so, three complementary mitigation-related reference points are used. Applying the criteria defined by the European Union Taxonomy for Sustainable Activities results in 4.2% of investments assessed as making a substantial contribution to climate change mitigation. Comparing actual greenhouse gas trajectories for each transport mode to a 2°C scenario from the International Energy Agency’s for the European Union and to projections from Latvia’s 5th National Communication to the UNFCCC, indicates 32% climate-consistent and up to 9% climate-inconsistent investments. The majority of investments volumes could at this stage not be characterised due to limitations relating to the granularity or coverage of the reference points. Comparing current trends to 2030 and 2050 decarbonisation targets nevertheless highlights future investment and financing challenges, especially for road transport. The methodology piloted in this study can be replicated and scaled up across countries and sectors, using different or complementary reference points specifically aligned to the temperature goal of the Paris Agreement.
    Keywords: capital expenditure, climate change, emissions, energy efficiency, finance, investment, Latvia, low-greenhouse gas development, measurement, scenarios, taxonomy, tracking, transport
    JEL: Q54 Q56 H54 E01 E22 G31 G32 L91
    Date: 2020–05–20

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.