nep-cwa New Economics Papers
on Central and Western Asia
Issue of 2008‒08‒06
fourteen papers chosen by
Nurdilek Hacialioglu
Open University

  1. Social Capital and Basic Goods: The Cautionary Tale of Drinking Water in India By Sripad Motiram; Lars Osberg
  2. Issues in Infrastructure for Export of Rice from India By Raghuram G.; Asopa V.N.
  3. Estimating Output Gap for Pakistan Economy:Structural and Statistical Approaches By S. Adnan H. A. S., Bukhari; Safdar Ullah, Khan
  4. Community watershed management in semi-arid India: The state of collective action and its effects on natural resources and rural livelihoods By Shiferaw, Bekele; Kebede, Tewodros; Ratna Reddy, V.
  5. Reforming the agricultural extension system in India: What do we know about what works where and why? By Raabe, Katharina
  6. Issues in Infrastructure for Export of Marine Products from India By Raghuram G.; Asopa V.N.
  7. Feasibility of Integrating Solar Desalination with Greenhouse Systems in Semi-Arid Region of North-west India By Girja Sharan
  8. Indian Railways in the Past Twenty Years Issues, Performance and Challenges By Raghuram G.; Gangwar Rachna
  9. The Oil Price Really Is A Speculative Bubble By R.S. Eckaus
  10. Institutions and Forest Management: A Case Study from Swat, Pakistan By Lorenzo Pellegrini; Gideon Kruseman
  11. Towards a Fiscal Illusion Index By Mourão, Paulo
  12. Promotion with and without Learning: Effects on Student Enrollment and Dropout Behavior By King, Elizabeth M; Orazem, Peter; Paterno, Elizabeth M
  13. The Gulf Cooperation Council countries – economic structures, recent developments and role in the global economy By Michael Sturm; Jan Strasky; Petra Adolf; Dominik Peschel
  14. Do the Gulf Oil-Producing Countries Influence Regional Growth? the Impact of Financial and Remittance Flows By Nadeem Ilahi; Riham Shendy

  1. By: Sripad Motiram; Lars Osberg (Department of Economics, Dalhousie University; Department of Economics, Dalhousie University)
    Date: 2008–07–21
    URL: http://d.repec.org/n?u=RePEc:dal:wparch:social_capital.pdf&r=cwa
  2. By: Raghuram G.; Asopa V.N.
    Abstract: Rice is exported in two varieties, basmati (aromatic) and non-basmati. The basmati rice exports are in three categories: white, brown and parboiled. India earned Rs 18.4 billion in 2001-02 from exports of basmati rice and non-basmati rice contributed Rs 13.3 billion for the same period. This paper focuses on promoting rice exports, for which infrastructural and policy requirements are discussed.
    Date: 2008–07–15
    URL: http://d.repec.org/n?u=RePEc:iim:iimawp:2008-07-03&r=cwa
  3. By: S. Adnan H. A. S., Bukhari; Safdar Ullah, Khan
    Abstract: The objective of this study is to estimate potential output vis-à-vis output gap for Pakistan’s economy. This paper reviews six commonly used techniques to estimate potential output and from that the output gap. The results suggest that while measures of output gap are not identical they nonetheless do show some degree of association among each other. Therefore, a composite output gap is calculated for 1950 to 2007. The composite output gap depicts that Pakistan economy has been observing a cyclical episode of periods of excess supply followed by excess demand in the period of analysis. Furthermore, evidence suggests that Pakistan economy is currently experiencing rising demand pressures since FY05. These demand pressures show a high degree of correlation with the rising inflation as shown in the temporal correlation between inflation and composite of output gap measures.
    Keywords: gross domestic product; potential output; output gap
    JEL: C53 C22 E37
    Date: 2008–04–06
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:9736&r=cwa
  4. By: Shiferaw, Bekele; Kebede, Tewodros; Ratna Reddy, V.
    Abstract: "Spatial and temporal attributes of watersheds and the associated market failures that accelerate degradation of agricultural and environmental resources require innovative institutional arrangements for coordinating use and management of resources. Effective collective action (CA) allows smallholder farmers to jointly invest in management practices that provide collective benefits in terms of economic and sustainability gains. The Government of India takes integrated watershed management (IWM) as a key strategy for improving productivity and livelihoods in the rain-fed and drought-prone regions. This study investigates the institutional and policy issues that limit effective participation of people in community watershed programs and identifies key determinants for the degree of CA and its effectiveness in achieving economic and environmental outcomes. We use empirical data from a survey of 87 watershed communities in semi-arid Indian villages to identify a set of indicators of CA and its performance in attaining desired outcomes. Factor analysis is used to develop aggregate indices of CA and its effectiveness. Regression methods are then employed to test the effects of certain policy relevant variables and to determine the potential effects of CA in achieving desired poverty reduction and resource improvement outcomes. We find a positive and highly significant effect of CA on natural resource investments, but no evidence of its effects on household assets and poverty reduction outcomes. This may be attributable to longer gestation periods for realizing indirect effects from collective natural resource investments and the lack of institutional mechanisms to ensure equitable distribution of such gains across the community, including the landless and marginal farmers." authors' abstract
    Keywords: Collective action, Institutions, Property rights, Watershed management, Poverty, Environmental impacts,
    Date: 2008
    URL: http://d.repec.org/n?u=RePEc:fpr:worpps:85&r=cwa
  5. By: Raabe, Katharina
    Abstract: "In order to realize agricultural potential and to increase agricultural yields, India's extension system has experienced major conceptual, structural, and institutional changes since the late 1990s. This paper reviews existing reform programs and strategies currently existing in agricultural extension in India. It distinguishes strategies that have been employed to strengthen both the supply and demand sides of service provision in the area of agricultural extension, and it reviews the effects of the demand- and supply-side strategies on the access to and the quality of agricultural extension services. The ultimate objectives are (1) to gain a view on what works where and why in improving the effectiveness of agricultural extension in a decentralized environment; (2) to identify measures that strengthen and improve agricultural extension service provision; and (3) to reveal existing knowledge gaps. Although the range of extension reform approaches is wide, this paper shows that an answer to the question of what works where and why is complicated by the absence of sound and comprehensive qualitative and quantitative impact and evaluation assessment studies. Even evidence from the National Agricultural Technology Project and the Diversified Agricultural Support Project of the World Bank, the women empowerment programs of the Danish International Development Agency, the Andhra Pradesh Tribal Development Project, and the e-Choupal program of the Indian Tobacco Company is subject to methodological and identification problems. Conclusions regarding the importance (1) of implementing both decentralized, participatory, adaptive, and pluralistic demand- and supply-side extension approaches; (2) of involving the public, private, and third (civil society) sectors in extension service provision and funding; and (3) of strengthening the capacity of and the collaboration between farmers, researchers, and extension workers are necessarily tentative and require further quantification. The paper seeks to inform policymakers and providers of extension services from all sectors about the need to make performance assessments and impact evaluations inherent components of any extension program so as to increase the effectiveness of extension service reforms." from Author's Abstract
    Keywords: Demand-driven and supply-driven agricultural extension services' extension service reforms, Agricultural extension services, Reforms, Demand driven, Supply driven, Governance,
    Date: 2008
    URL: http://d.repec.org/n?u=RePEc:fpr:ifprid:775&r=cwa
  6. By: Raghuram G.; Asopa V.N.
    Abstract: Indian marine products are wanted internationally. There is potential for a higher market share in importing countries. Shrimp contributed 62% by value and 28% by volume of exports in 2002-03. The potential market for marine exports is in value added products (cooked, ready to eat and ready for table), freeze dried shrimps (wherever reduced transportation cost can bring in competitive advantage), surimi and canned fish. While infrastructural requirements are essential in the entire supply chain, the quality of infrastructure in the pre-processing stage is significantly lower than the processing and post-processing stages. This paper focuses on the scope of improving both quantum and quality of product including the primary product shrimp in the pre-processing stage from farming/harvesting to the processing unit through a whole range of regulatory and infrastructure measures. These include 1. Improving the quality of trawlers and smaller mechanized boats, to enable deep sea fishing 2. Regulating the capture during the spawning period 3. Achieving global standards at fishing harbors, landing centres and auction centres 4. Promoting aquaculture, but in properly zoned areas with a focus on managing an integrated set of activities 5. Licensing of ice factories, monitoring the quality of water they use, and if required, ensuring supply of quality water 6. Facilitating cold chains in both storage and transportation
    Date: 2008–07–15
    URL: http://d.repec.org/n?u=RePEc:iim:iimawp:2008-07-04&r=cwa
  7. By: Girja Sharan
    Abstract: A two-phase project is underway to develop greenhouse systems suitable for water scarce, semi-arid region of north-west India (Kutch). The first phase aimed at studying the effectiveness of natural ventilation and earth-tube-heat-exchanger for environmental control, in place of fan-pads commonly used. These measures were able to reduce the need for evaporative cooling significantly and offer scope for further improvement. The second phase, just started, aims at finding cost-effective means of desalinating brackish water for plant use. Arrays of simple basin type solar stills have been used in this region in the past to provide drinking water in villages. The area of stills needed to meet the greenhouse crop requirement works out to approximately half the cropping area. It would be cumbersome to integrate these with greenhouse structure. Besides, these were reported to be difficult to maintain. A new option - solar assisted low temperature thermal desalination - is therefore being pursued. An outline of the work in progress is presented.
    Date: 2008–07–15
    URL: http://d.repec.org/n?u=RePEc:iim:iimawp:2008-07-02&r=cwa
  8. By: Raghuram G.; Gangwar Rachna
    Abstract: Indian Railways (IR) is Asia’s largest and world’s second largest network under one management, with a separate Ministry and its own annual budget. The network carried about 17 million Passengers and 2 mt freight every day on the route of 63,327 km (2006-07). Although key business operations are freight and passenger, IR is also engaged in several allied services including parcel, catering and production units. Nearly 70 percent of IR’s revenues come from the freight operations, which can be segmented into bulk and other cargo. Over the years, IR has predominantly become a bulk freight carrier, accounting for about 94 percent of the freight revenue. Coal alone accounts for nearly half of the bulk traffic carried. Passenger business accounts for nearly 60 percent of IR’s total transport effort, in terms of train kilometers, but yield less than 30 percent of the total revenues. Suburban services account for 57 percent of the originating passengers, while contribute to only 8 percent of the passenger revenue. To understand the development process of IR’s over the past twenty years, the study covers issues and strategies related to financial and physical aspects of revenue generating freight and passenger traffic from 1987-2007. Study also covers the developments in the parcel, catering and advertising sector.
    Date: 2008–07–15
    URL: http://d.repec.org/n?u=RePEc:iim:iimawp:2008-07-05&r=cwa
  9. By: R.S. Eckaus
    Abstract: The oil price really is a speculative bubble. Yet only recently has the U.S. Congress, for example, showed recognition that this might even be a possibility. In general there seems to be a preference for the claim that the price increases are the result of basic economic forces: rapid growth in consumption, pushed particularly by the oil appetites of China and India, the depreciation of the U.S. dollar, real supply limitations, current and prospective and the risks of supply disruption, especially in the Middle East. These “explanations” will be taken up one by one, but first a view of what has happened to oil prices over recent years.
    Date: 2008–06
    URL: http://d.repec.org/n?u=RePEc:mee:wpaper:0807&r=cwa
  10. By: Lorenzo Pellegrini (Institute of Social Studies (ISS)); Gideon Kruseman (LEI)
    Abstract: Deforestation in the North western part of Pakistan is a long standing problem. The Forestry Department, as formal managers of the forest resources, has been undergoing a long reform process aimed at improving its performance. This reform process has not resulted in less deforestation. From the policy perspective this has been leading to stated intentions to further reform the Forestry Department, the question is whether organizational reform is the answer. We think there are more limiting bottlenecks to sustainable forest management in Pakistan. De facto property rights are not as simple as denoted by statutory law. In this article we explore the mechanisms behind the deforestation and try to uncover mechanisms to reverse the process. Although our conclusions are not very optimistic, we provide a framework for determining the bottlenecks in the management of common resources from the perspective of institutions. We show that in circumstances where institutional change is necessary we are faced with a trade-off between the transaction costs related to the enforcement of “improved” institutional arrangements and the transaction costs improving enforceable institutional arrangements. Incurring these transaction costs only makes sense if the benefits from improved institutional arrangements outweigh them and the transition costs. When we relate this dilemma to the management regime of the forest in North west Pakistan, we identify at the one end of the spectrum the ideal forest management system; at the other end we see the spontaneous evolution of self organization. The current situation is an intermediate form with an incoherent set of external interventions and strategic reactions by different agents in the local communities. The emergent system of management is the one producing the present dismal outcome.
    Keywords: New institutional Economics, Corruption, Forestry, Swat
    JEL: Q23 Q58
    Date: 2008–05
    URL: http://d.repec.org/n?u=RePEc:fem:femwpa:2008.42&r=cwa
  11. By: Mourão, Paulo
    Abstract: This paper presents an index of Fiscal Illusion for 68 democratic countries from 1960 to 2006. The studied Fiscal Illusion is the one related to a wrong perception of the budget aggregates according to the voters and taxpayers’ perspectives. In the construction of the index, methodological issues were carefully taken into account. The results obtained reveal that fiscal illusion varies greatly around the world. Countries such as Mali, Pakistan, Russia and Sri Lanka have the highest average values over the time period considered; while Austria, Luxembourg, Netherlands and New Zealand have the lowest. Regarding the time dimension, between 1980 and 1995 there was a significant decrease in the average value of the index across countries, suggesting a reduction in the adoption of fiscal illusion measures during this period. After 1995, the index remained stable in most of the countries.
    Keywords: Fiscal Illusion; Indexes/Indicators; Democracy
    JEL: E62 H11 C82 H30
    Date: 2007–11
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:9760&r=cwa
  12. By: King, Elizabeth M; Orazem, Peter; Paterno, Elizabeth M
    Abstract: Many educators and policymakers have argued for lenient grade promotion policy – even automatic promotion – in developing country settings where grade retention rates are high. The argument assumes that grade retention discourages persistence or continuation in school and that the promotion of children with lower achievement does not hamper their ability or their peer’s ability to perform at the next level. Alternatively, promoting students into grades for which they are not prepared may lead to early dropout behavior. This study shows that in a sample of schools from the Northwest Frontier Province (NWFP) of Pakistan, students are promoted primarily on the basis of merit. An econometric decomposition of promotion decisions into a component that is based on merit indicators (attendance and achievement in mathematics and language) and another that is uncorrelated with those indicators allow a test of whether parental decisions to keep their child in school is influenced by merit-based or non-merit-based promotions. Results suggest that the enrollment decision is significantly influenced by whether learning has taken place, and that grade promotion that is uncorrelated with merit has a negligible impact on school continuation.
    Keywords: Grade repetition, grade retention, grade promotion, enrollment, achievement, dropout, Pakistan
    JEL: I2
    Date: 2008–07–30
    URL: http://d.repec.org/n?u=RePEc:isu:genres:12968&r=cwa
  13. By: Michael Sturm (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Jan Strasky (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Petra Adolf (Deutsche Bundesbank, Wilhelmp-Epstein-Strasse 14, 60431 Frankfurt am Main.); Dominik Peschel (Deutsche Bundesbank, Wilhelmp-Epstein-Strasse 14, 60431 Frankfurt am Main.)
    Abstract: In the wake of high and rising oil prices since 2003, the member states of the Gulf Cooperation Council (GCC) have seen dynamic economic development, enhancing their role in the global economy as investors and trade partners. Real GDP growth has been buoyant, with non-oil activity expanding faster than oil GDP. Macroeconomic developments have also been characterised by large fiscal and current account surpluses as a result of rising oil revenues, notwithstanding fiscal expansion and rapid import growth. The most significant macroeconomic challenge faced by GCC countries is rising inflation in an environment in which the contribution of monetary policy to containing inflationary pressure is constrained by the exchange rate regimes. The overall favourable macroeconomic backdrop of recent years has provided GCC countries with an opportunity to tackle long-standing structural challenges, such as the diversification of oil-centred economies and reform of the labour markets. In a global context, apart from developing into a pole of global economic growth, GCC countries – together with other oil-exporting countries – have become a major net supplier of capital in global markets, second only to East Asia. As a result, they have become part of the international policy debate on global imbalances. Furthermore, GCC countries are home to some of the world’s largest sovereign wealth funds, which raises several financial stability issues. Their role as trade partners has also increased, with the European Union being the only major region in the world maintaining a significant surplus in bilateral trade with the GCC. GCC countries are also key players in global energy markets in terms of production, exports and the availability of spare capacity. Their role is likely to become even more pivotal in the future as they command vast oil and gas reserves and benefit from relatively low costs in exploiting oil reserves. JEL Classification: F40, F30, F14, E60, N15, O53, Q40.
    Keywords: Gulf Cooperation Council, global imbalances, sovereign wealth funds, financial stability, oil markets.
    Date: 2008–07
    URL: http://d.repec.org/n?u=RePEc:ecb:ecbops:20080092&r=cwa
  14. By: Nadeem Ilahi; Riham Shendy
    Abstract: This paper tests the association between the Gulf Cooperation Council (GCC) countries' financial and remittance outflows and regional growth in the Middle East. The findings, based on 35-year panel data, indicate that growth rates of real GDP, private consumption and private investment in regional countries are strongly associated with remittance outflows from and the accumulation of financial surpluses in the GCC. Unlike in other developing and emerging market countries, growth in regional countries is not influenced by growth in the North, and is not export led. Linkages with the GCC could help sustain output growth in the regional countries in the face of the global economic slowdown and oil price shocks and could provide diversification gains to international capital seeking markets uncorrelated with Northern and emerging market countries.
    Keywords: Middle East , Oil producing countries , Cooperation Council for the Arab States of the Gulf , Economic growth , Capital flows , Gross domestic product , Private consumption , Private investment , Outward remittances , Regional shocks , Oil prices , Capital markets , Business cycles , Emerging markets ,
    Date: 2008–07–09
    URL: http://d.repec.org/n?u=RePEc:imf:imfwpa:08/167&r=cwa

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