nep-cwa New Economics Papers
on Central and Western Asia
Issue of 2007‒12‒01
fifteen papers chosen by
Nurdilek Hacialioglu
Open University

  1. It is the Initiative that matters: Why is Pakistan one step ahead in Peacemaking in the Region? By Mamoon, Dawood
  2. Past is just a Fine Reality: Redefining the Indo-Pak History through its Economics By Mamoon, Dawood
  3. Gender wage discrimination in the Turkish labor market. By Elisabeth Cudeville; Leman Yonca Gurbuzer
  4. China and India in International Trade: from Laggards to Leaders? By Francoise Lemoine; Deniz Unal-Kesenci
  5. Rural Nonfarm Employment and Incomes in the Eastern Himalayas By Micevska, Maja; Rahut, Dil Bahadur
  6. How Remote is the Offshoring Threat? By Keith Head; Thierry Mayer; John Ries
  7. Life of elderly in India By prasad, syam
  8. Empowerment through technology: gender dimensions of social capital build-up in Maharashtra, India By Padmaja, Ravula; Bantilan, Cynthia
  9. Wages, Prices, and Living Standards in China,1738-1925: in comparison with Europe, Japan, and India By Robert Allen; Jean-Pascal Bassino; Debin Ma; Christine Moll-Murata; Jan Luiten van Zanden
  10. Collective action and marketing of underutilized plant species: the case of minor millets in Kolli Hills, Tamil Nadu, India By Gruere, Guillaume P.; Nagarajan, Latha; King, E.D.I. Oliver
  11. Business Cycles and Remittances: A Comparison of the Cases of Turkish Workers in Germany and Mexican Workers in the US By Sayan, Serdar; Tekin-Koru, Ayca
  12. High Growth Continues, with Risks of Overheating on the Horizon By Vladimir Gligorov; Sándor Richter
  13. Aspirations, Enterprise Strategy and Sustenance of a Start-up in a Competitive Environment: A Study of Developments in Air Deccan By Dixit M.R.; Sharma Sunil; Karna Amit
  14. The role of public-private partnerships and collective action in ensuring smallholder participation in high value fruit and vegetable supply chains: By Narrod, Clare; Roy, Devesh; Okello, Julius; Avendaño, Belem; Rich, Karl
  15. Is Tax Policy Retarding Growth in Morocco? By Tatom, John

  1. By: Mamoon, Dawood
    Abstract: The paper discusses the current dynamics of peace initiatives made by Pakistan and their importance in changing the regional dynamics in favour of increased economic cooperation in the light of the study undertaken by Murshed and Mamoon (2007) which has analysed the multiple determinants of conflict between India and Pakistan in multivariate settings. The paper highlights the importance of peace in the region especially for Pakistan where the development potential of the country have been stifled greatly due to a long history of political and economic volatility while linking Pakistan’s progress with that of its neighbours through conflict mitigation process. The paper also presents the possibility of such dyadic economic and conflict trade off in 1990s where India may have utilised hostilities to curtail Pakistani economic potential to pressurise Pakistan to forego its support of insurgency in Indian held Kashmir. As both countries are progressing economically, Pakistani peace initiatives make the country as a leading factor in South Asia determining the pace and potential to realise long sought process of regional progress through greater integration of interests.
    Keywords: Economic Development; Regional Trade; Economics of Conflict;
    JEL: F15 F52 Z00 F51
    Date: 2007–11–25
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:5948&r=cwa
  2. By: Mamoon, Dawood
    Abstract: The paper revisits India Pakistan relationships in its historical context since 1947, and gives a fresh perspective to the political economy of the region by promoting the idea of how embracing free market economic management policies may have benefited both countries to achieve higher economic dividends recently and thus provided the base for ongoing peace negotiations. The paper also highlights the domestic and international political and economic factors which may have affected India and Pakistan relationships over the years though the study agrees with other research in the same area on the domestic dynamics of hostilities which were initiated since the very independence from the British in 1947 partly due to mistrust between the leadership of both countries. In later years the mistrust and encompassing hostilities were sustained more significantly due to Kashmir dispute which has yet to resolve.
    JEL: Z1 P5 Z12 N9
    Date: 2007–11–24
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:5940&r=cwa
  3. By: Elisabeth Cudeville (Centre d'Economie de la Sorbonne); Leman Yonca Gurbuzer (Centre d'Economie de la Sorbonne)
    Abstract: While the topic of gender equality turns out to be an important element in the preparation of Turkey to join the European Union, very little empirical research on this issue has been done using Turkish data. This paper aims to contribute toward filling this gap. We propose an estimate of the wage discrimination in Turkey relying on different decompositions of the gender waga differential. The data set used is the 2003 Turkish Household Budget Survey. In Turkey, the observed average gender wage gap is about 25,2 % in favor of men for the salaried population and around 60 % of it may be attributed to discrimination. In terms of gender wage discrimination, with an observed wage gap close to those observed in France and Italy, and a discrimination component close to the ones obtained in Spain and Greece with comparable methods, Turkey happens to do not so bad. But, in the Turkish case, wage discrimination appears to be a bad indicator of gender inequalities in the labor market, as exclusion and segregation of women are the main concerns.
    Keywords: Discrimination, gender wage gap decompositions, Turkey.
    JEL: J16 J71 J82
    Date: 2007–05
    URL: http://d.repec.org/n?u=RePEc:mse:cesdoc:bla07067&r=cwa
  4. By: Francoise Lemoine; Deniz Unal-Kesenci
    Abstract: China and India are demographic giants which have become big economic powers before getting rich. Their rise in international trade has created two symmetric shocks, on the supply of manufactured goods and the demand of primary goods, contributing to a reversal in world relative prices. They have kept traditional specialisation in textiles but have developed new outward-oriented sectors linked to new technology. Foreign firms, through offshoring and outsourcing, have played a critical part in turning China into a global export platform for electronic products, and India into a global centre for ICT services. Beyond the question of their technological catch-up, the challenge is now their quality upgrading, especially for China. In the two countries, there is a debate about the necessary changes to make long term growth sustainable. Their successful integration in world trade has not solved the problem of their overall oversupply of labour, but has accentuated the shortage of highly-skilled personnel.
    Keywords: China; India; foreign trade; technology; terms of trade
    JEL: F14 F15
    Date: 2007–11
    URL: http://d.repec.org/n?u=RePEc:cii:cepidt:2007-19&r=cwa
  5. By: Micevska, Maja; Rahut, Dil Bahadur
    Abstract: Nonfarm activities generate on average about 60 percent of rural households’ incomes in the eastern Himalayan region of India. This paper analyzes the determinants of participation in nonfarm activities and of nonfarm incomes across rural households. We present and explore an analytical framework that yields different activity choices as optimal solutions to a simple utility maximization problem. A unique data set collected in the eastern Himalayas allows us to closely examine the implications of the analytical framework. We conduct an empirical inquiry that reveals that education plays a major role in accessing more remunerative nonfarm employment. Other household assets and characteristics such as land, social status, geographical location, and credit access also play a role.
    Keywords: Nonfarm employment, Rural households, Incomes, Education, India
    JEL: O15 O18 Q12 R11
    Date: 2007
    URL: http://d.repec.org/n?u=RePEc:zbw:gdec07:6545&r=cwa
  6. By: Keith Head; Thierry Mayer; John Ries
    Abstract: Advances in communication technology make it possible for workers in India to supply business services to head offices located anywhere. This has the potential to put high-wage workers in direct competition with much lower paid Indian workers. Service trade, however, like goods trade, is subject to strong distance effects, implying that the remote supply of services remains limited. We investigate this proposition by deriving a gravity-like equation for service trade and estimating it for a large sample of countries and different categories of service trade. We find that distance costs are high but are declining over time. Our estimates suggest that delivery costs create a significant advantage for local workers relative to competing workers in distant countries.
    Keywords: Services; distance; gravity; trade
    JEL: F10 F14 F15 F16
    Date: 2007–11
    URL: http://d.repec.org/n?u=RePEc:cii:cepidt:2007-18&r=cwa
  7. By: prasad, syam
    Abstract: Abstract of the paper Aging of population is a major aspect of the process of demographic transition. It is generally expressed as older individuals forming large share of the total population. Such an increase is considered to be an end product of demographic transition or demographic achievements with a decline in both fertility and mortality rates and consequent increase in the life expectancy at birth and older ages. The recent emphasis on studies pertaining to the elderly in the developing world is attributed to their increasing numbers and deteriorating conditions. The lives of many older people are affected more frequently by the social and economic insecurity that accompany demographic and development process (World Bank 1994). The growth of individualism and desire of the independence and autonomy of the young generation (serow 2001) affect the status of the elderly. The studies show that the socio economic condition of older women is more vulnerable in the context of the demographic and the socio cultural change (Tout 1993). The situation of the elderly poverty has been a consistent phenomenon in the third world as the older population is deprived of the basic needs (Keyfitz and Flieger 1990). In this paper we make an attempt to profile life of elderly that reflects on deprivation among the elderly. Here most important question is whether age acts a determining factor in the life of a person. Or does age mediates living condition along with other factors that coexistence in life. Is there any change in the living condition over chronological ladders of human life? How does differ life varies across chronological ladder across space in India over time through a narration of what is happening in the Indian states in the past decade. Here we look into four parameters that create risk and to which chronologically disadvantaged population has to respond. They are marital status, work status, living arrangements of the elderly and dependency. Then look into how close interactions between these factors affect the overall living of the elderly by using an index of life for the Indian states. Here we mainly focuses on how there is an over all decline in the life of elderly by looking into four dimensions of life in terms of marital status, economic status( work participation) dependency and living arrangements. Here we profile these aspects to understand pattern of living among elderly in Indian states. The paper highlights that the living condition of the elderly varies differently across Indian states. The various dimensions are vertically integrated to get a weighted index called in this paper as quality of life among the elderly that take value zero to one with higher value provides worse living condition. It is clear that position of the elderly in terms of material and social well being is betterly positioned in the states of north India rather than south India.
    Keywords: ageing; life of elderly; quality of life; demographic transition
    JEL: J14 I31 I3
    Date: 2007–11–27
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:5935&r=cwa
  8. By: Padmaja, Ravula; Bantilan, Cynthia
    Abstract: "This paper explores how and to what extent women and men have benefited from the build-up of social capital in technology uptake, and the role of women in this process. Using a case study on Groundnut Production Technology (GPT) in Maharashtra, India, a systematic documentation of the process by which farmers – both men and women - as well as the whole community became empowered through the build-up of social capital is presented. The focus of the paper is on collective action as a mechanism to stimulate gender-equitable change processes. Our evidence suggests that the technology uptake process was enhanced with the build up of social capital, whereby men and women from all class and caste groups came together for improving their livelihoods. Collective action was enhanced with the increased involvement and participation of women. Strong kinship ties were developed among diverse classes all over the village including landless tribal women, who formed the major labor force for this technology. The paper concludes that social networks played a crucial mediating role in the process of technology uptake. The build-up of social capital played an important role in influencing impacts from the technology because of the ways in which social networks and social relationships facilitated technology dissemination. Gender relations played a significant role in mediating the translation of economic benefits into well being of the individual, the family and community. Finally, it is suggested that further insights into the role of social networks and power relations in the village may be examined in greater detail by establishing the village network architecture, especially marginalized groups." Author's Abstract
    Keywords: Empowerment, Technology adoption, Agricultural growth, Agricultural technology, Gender, Social capital buildup, Social networks, Impact, Collective action,
    Date: 2007
    URL: http://d.repec.org/n?u=RePEc:fpr:worpps:63&r=cwa
  9. By: Robert Allen; Jean-Pascal Bassino; Debin Ma; Christine Moll-Murata; Jan Luiten van Zanden
    Abstract: The paper develops data on the history of wages and prices in China from thr eighteenth century to the twentieth. These data are used to coompare Beijing, Canton, Suzhou and Shanghai to leading cities in Europe, India, and Japan in terms of nominal wages, the cost of living, and the standard of living. In the eighteenth century, the real income of building workers in Asia was similar to that of workers in the backward parts of Europe and far behind that of workers in the leading economies of northwestern Europe. Industrialization led to rising real wages in Europe and Japan. Real wages declined in China in the eighteenth and early nineteenth centuries and rose slowly in the late nineteenth and early twentieth. There was little cumulative changae in the standard of living or workers in Beijing, Canton, and lower Yangzi cities for two hundred years. The income disparities of the early twentieth century were due to long run stagnation in China combined development in Japan and Europe.
    Keywords: Great Divergence, Preindustrial Real Wages, England, Europe, China, Japan, India
    JEL: N33 N35
    Date: 2007
    URL: http://d.repec.org/n?u=RePEc:oxf:wpaper:316&r=cwa
  10. By: Gruere, Guillaume P.; Nagarajan, Latha; King, E.D.I. Oliver
    Abstract: "Minor millets are examples of underutilized plant species, being locally important but rarely traded internationally with an unexploited economic potential. In the Kolli hills of Tamil Nadu, India, a genetically diverse pool of minor millet varieties are grown by the tribal farming communities to meet their subsistence food needs. Most of these minor crops were not traded outside the farming community. Despite a consumption preference among the farming communities for minor millets, in the recent past the acreage under minor millet crops have declined considerably due to the availability of substitute cash crops. As a response, the M.S. Swaminathan Research Foundation (MSSRF) based in Chennai has led targeted conservation cum commercialization intervention programs over the last 7-9 years in the Kolli Hills. In this paper we provide a first evaluation of the success of marketing development for minor millets in the Kolli Hills with a specific focus on collective action and group initiatives undertaken by the women and men self-help groups organized by the concerned non-governmental organization. We analyze the key collective actions that are taking place in the minor millet marketing chain through a series of field visits and focus group discussions with the stakeholders involved. We then compare the role of collective action in this new market with the case of marketing chains for cassava and organic pineapples, two cash crops with an expanding production in Kolli Hills. Our analysis shows the critical role of collective action and group initiative as a necessary but not sufficient condition for the successful commercialization of underutilized plant species for the benefit of the poor and the conservation of agrobiodiversity." authors' abstract
    Keywords: Collective action, Underutilized species, Agricultural marketing, Agrobiodiversity,
    Date: 2007
    URL: http://d.repec.org/n?u=RePEc:fpr:worpps:69&r=cwa
  11. By: Sayan, Serdar; Tekin-Koru, Ayca
    Abstract: ...
    JEL: E32 F24 I32
    Date: 2007
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:6030&r=cwa
  12. By: Vladimir Gligorov (The Vienna Institute for International Economic Studies, wiiw); Sándor Richter (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: The 1st of May 2007 marked the third anniversary of the accession of the new member states (NMS) to the European Union: the economic balance of the first three years is a clear success for the whole EU. Over the period 2001-2003 GDP in the NMS had increased by 3.1% per year on average; over the period 2004-2006, however, it expanded by 5.3% per year - an increase of the annual growth rate by 2.2 percentage points. In part, this growth acceleration is attributable to the more favourable international environment and the distinctly better growth performance in the 'old' EU; nevertheless the NMS substantially increased their lead in terms of growth over the EU-15: up from 1.7 p.p. in 2001-2003 to 3.1 p.p. in 2004-2006. The catching-up process to the level of development of the 'old' EU has thus accelerated. In the field of investments the difference between the pre- and post-accession period was even more spectacular: while in 2001-2003 both the EU-15 and the NMS recorded an only marginal expansion, in 2004 2006 investment growth in the NMS was 4.7 p.p. higher than in the 'old' EU member states. The NMS also became more attractive targets for FDI. And their export growth rates nearly doubled after EU accession: import growth lagged behind export growth, yielding better trade balances. The stronger economic growth reduced unemployment: the aggregate unemployment rate in the NMS declined by 1.7 p.p. in the post-accession period. However, three macroeconomic stability indicators - inflation, current account status and fiscal balance - reveal a more differentiated and less favourable picture than those measuring changes in the real economy. Given the expected continuation of the favourable international environment, the period of high growth in the NMS will continue in 2007 and 2008, except for Hungary. Nevertheless, in all but two countries (the Czech Republic and Hungary) growth rates in 2008 will be somewhat lower than, or only as high as, in 2007, thus hinting at constraints on further growth acceleration. Household consumption remains the engine of growth in the Czech Republic, Poland, Bulgaria and Romania, as well as in the Baltic States. Investments will boom in Poland, Slovenia, Bulgaria, Romania and the Baltic States. Supply-side constraints on a very rapid expansion of the economy will be felt in more and more countries of the region, especially in terms of the tight labour market. There are clear signs of overheating in Bulgaria, Romania and the Baltic States where the external balance has been deteriorating and no turnaround is in sight. Inflation will remain relatively low. This is the outcome of the contradicting effect of inflationary pressures from an increasingly tight labour market and its consequences, and the considerable appreciation of the national currencies. High export growth will reflect the favourable international environment and the growing import demand of the region's main trading partner countries. Economic developments in the future member states (FMS) of the EU - the candidate and potential candidate countries of the Balkans - continue to surprise positively. All countries report respectable growth rates of their GDPs, and the growth looks sustainable. Industrial production, a weak sector traditionally, grows faster than GDP, except in Montenegro. Tourism - an important sector in the Balkans - is attracting investments, private as well as public. In general, investments are proving to be an important driver of growth, though consumption is still the dominant contributor. In addition, exports are growing rather fast though so are imports too. These positive developments are supported by the belief in the political and policy stability in these countries. Though external and internal imbalances, i.e. in the labor markets, are still quite large, price stability does not seem threatened. Even in countries such as Turkey or Serbia, where exchange rates and prices are more volatile, the risks of serious crisis are rather low. In addition to macroeconomic stability, the underlying political stability seems to have improved as well. Though no breakthrough has been achieved in the longstanding political problems, progress in democratization is bringing the security and political risks down. Though economies are doing better in the FMS, public and corporate governance as well as structural reforms are not necessarily contributing decisively to that. The most commonly used indices of progress in reforms, business climate and public governance, do not give a consistent picture and certainly do not unequivocally report improvement. The prospects of EU integration have improved during the German presidency and will add to the positive outlook. Growth should stay between 5% and 6%, investments and exports should grow even faster and macroeconomic stability should be sustained in the medium run. Russia's economic growth accelerated in 2007, driven by booming consumption and investments (including FDI). More expenditures on state-sponsored priority programmes and industrial policy measures focusing on public-private partnership projects should foster restructuring and innovations. The wiiw forecast reckons with ongoing reliance on energy revenues and an average annual GDP growth of 5.3% in the coming years. With more money and power consolidation at home, Russian self-confidence will grow further - and this may lead to more conflicts with the West. In Ukraine, strong consumer demand, vigorous investment activity and solid exports have all contributed to impressive GDP growth of 7.9% in January-May 2007. Rising consumption and housing construction are increasingly driven by expanding consumer credit, not least due to the growing presence of foreign banks. However, we expect economic growth for the year as a whole to be somewhat lower, between 6.5% and 7%. Imports growing faster than exports will translate into a rising current account deficit, possibly up to 4% of GDP in 2007 and even higher next year. The prospects for greater political stability in the country remain bleak. GDP grew by 11.1% in China in the first quarter of 2007, faster than expected by most experts. Obviously, the official efforts to contain growth have so far not been successful. The economy was driven by a rebound of investment and by a ballooning trade surplus, but supported by a certain acceleration of consumer demand as well. Recent data point to a continuation of the rapid expansion, which may result in a growth rate for the whole year between 10.5% and 11%.
    Keywords: Central and East European new EU member states, Southeast Europe, Balkans, former Soviet Union, China, Turkey, GDP, industry, productivity, labour market, foreign trade, exchange rates, inflation, fiscal deficits, EU integration
    JEL: O52 O57 P24 P27 P33 P52
    Date: 2007–07
    URL: http://d.repec.org/n?u=RePEc:wii:rpaper:rr:341&r=cwa
  13. By: Dixit M.R.; Sharma Sunil; Karna Amit
    Abstract: This paper studies the developments in Air Deccan, a start up in the Indian aviation industry and discusses the linkages among the aspirations of the entrepreneur, enterprise strategy and its sustenance in a competitive environment. It argues that the entrepreneur fails to sustain his/her enterprise and the aspirations if his strategic and operational choices and environmental responses to the choices create a resource or competence imbalance and constrain the entrepreneur. Based on its analysis and discussion, the paper delineates managerial themes like encyclopedic entrepreneurship, sustenance through co-sharing aspirations, managing first and fast mover advantages, dynamics of enterprise and its environment and competence management in start- ups.
    Date: 2007–11–23
    URL: http://d.repec.org/n?u=RePEc:iim:iimawp:2007-11-03&r=cwa
  14. By: Narrod, Clare; Roy, Devesh; Okello, Julius; Avendaño, Belem; Rich, Karl
    Abstract: "Many developing countries have moved into the production of non-traditional agricultural products to diversify their exports and increase foreign currency earnings. Accessing developed country markets and urban domestic markets requires meeting the food safety requirements due to several demand and supply side factors. Food retailers have developed protocols relating to pesticide residues, field and packinghouse operations, and traceability. In this changing scenario where food safety requirements are getting increasingly stringent, there are worries regarding the livelihood of the poor since companies that establish production centers in LDCs might exclude them. Poor producers face problems of how to produce safe food, be recognized as producing safe food, identify cost-effective technologies for reducing risk, and be competitive with larger producers with advantage of economies of scale in compliance with food safety requirements. In enabling the smallholders to remain competitive in such a system, new institutional arrangements are required. In particular, public-private partnerships can play a key role in creating farm to fork linkages that can satisfy the market demands for food safety while retaining smallholders in the supply chain. Furthermore, organized producer groups monitoring their own food safety requirements through collective action often become attractive to buyers who are looking for ways to ensure traceability and reduce transaction costs. This paper compares how small producers of different fruit and vegetable products in different countries have coped with increased demands for food safety from their main export markets. These commodities are Kenyan green beans, Mexican cantaloupes, and Indian grapes." authors' abstract
    Keywords: Food safety, Supply chain management, Public-private partnerships, Collective action, Public and private standards, Traceability,
    Date: 2007
    URL: http://d.repec.org/n?u=RePEc:fpr:worpps:70&r=cwa
  15. By: Tatom, John
    Abstract: Morocco has a distinguished reputation for opening the economy, privatization and for increasing the role of the private sector in economic development. The nation has also had well known success in achieving a high degree of price stability through a fixed and credible exchange rate that was supported by sound monetary policy. All of these successes led to accelerated investment, both domestically and by foreigners. One highly important potential impediment to growth is that Morocco, however, appears to have neglected the global fiscal reform movement aimed at providing a growth oriented and fairer tax system that encourages private sector risk-taking and investment. Following some key reform in the early 1990s, tax rates have not been altered much since then and remain relatively high, especially for individuals at low and moderate income levels, in comparison with other countries. This paper examines the importance of tax policy for investment and whether there are opportunities there to accelerate productivity and growth through tax reform. Morocco has extremely high taxes, especially the individual income tax, social insurance or payroll taxes and the value added tax. The individual income tax is the highest in the region and the highest marginal rate begins at a relatively low level of income. The corporate tax rate is among the highest in the region as well. At least one country in the region, Tunisia, has already taken the initiative to follow the global trend of cutting marginal tax rates in order to stimulate investment and growth. Morocco could usefully consider taking the lead in pursuing more competitive and lower, broader and less-discriminating taxation. Among the most critical steps would be cutting the top rate on individual income from 44 percent and extending the income level from where it begins to a larger multiple of median income. There are numerous loopholes that could be closed in order to finance such a change. Such steps would have the added benefits of lowering interest rates and boosting private capital formation and economic growth. But a broader and more aggressive agenda of tax reform is easily justified by regional or international comparisons.
    Keywords: Tax policy; economic development; investment and growth
    JEL: O23 H21 O55
    Date: 2007–11–29
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:6011&r=cwa

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