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on Central and Western Asia |
| By: | Kaliappa Kalirajan, (Asian Development Bank Institute (ADBI)) |
| Abstract: | It is logical to argue that growth led by low-carbon goods and services (LCGS) is an imperative for the countries of Asia and the Pacific, and particularly for emerging Asian economies, which are heavily dependent on imported energy and resources. Acknowledging this fact, individual governments in Asia have recently been taking effective actions in the form of voluntary targets and policy commitments to improve the production and use of LCGS. However, the observed effects of these commitments are often challenged by many constraints, such as technological barriers, financial deficiencies, and lack of human capital, some of which are very specific to developing Asia. Different sector policies—such as in trade and environment—and investment policies that aim to facilitate private enterprises, households, and government agencies to contribute to green growth through the use of LCGS are being implemented at the national level. However, fears of competitive disadvantage mean that these policies need to be driven by global and regional frameworks that encompass all countries and sectors. In this context, the objectives of this study are to (i) measure the potential of major emerging Asian economies for exports in LCGS under the "grand coalition," partial coalition, and stand-alone scenarios; (ii) measure the impact of existing "behind the border" constraints on potential exports in emerging Asian economies; (iii) identify the potential, options, and challenges with respect to a grand coalition scenario; and (iv) find ways to improve the contribution of public–private partnerships to LCGS. |
| Keywords: | Green Asia, low-carbon goods and services (LCGS), Asia and the Pacific, the production and use of LCGS |
| JEL: | Q56 Q58 R11 |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:eab:govern:23291&r=cwa |
| By: | Stephen Howes (Asian Development Bank Institute (ADBI)); Paul Wyrwoll |
| Abstract: | The developing economies of Asia are confronted by serious environmental problems that threaten to undermine future growth, food security, and regional stability. This study considers four major environmental challenges that policymakers across developing Asia will need to address towards 2030 : water management, air pollution, deforestation and land degradation, and climate change. We argue that these challenges, each unique in their own way, all exhibit the characteristics of “wicked problemsâ€. As developed in the planning literature, and now applied much more broadly, wicked problems are dynamic, complex, encompass many issues and stakeholders, and evade straightforward, lasting solutions. Detailed case studies are presented to illustrate the complexity and significance of Asia’s environmental challenges, and also their nature as wicked problems. The most important implication of this finding is that there will be no easy or universal solutions to environmental problems across Asia. This is a caution against over-optimism and blueprint or formulaic solutions. It is not, however, a counsel for despair. We suggest seven general principles which may be useful across the board. These are : a focus on co-benefits; an emphasis on stakeholder participation; a commitment to scientific research; an emphasis on long-term planning; pricing reform; tackling corruption, in addition to generally bolstering institutional capacity with regard to environmental regulation; and a strengthening of regional approaches and international support. |
| Keywords: | Environmental Problems, Asia, developing economies of Asia, developing Asia |
| JEL: | O44 Q58 Q56 O10 O53 Q28 Q53 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:eab:govern:23289&r=cwa |
| By: | Sanya Carley (School of Public and Environmental Affairs, Indiana University); Sameeksha Desai (School of Public and Environmental Affairs, Indiana University); Morgan Bazilian (United Nations Industrial Development Organization) |
| Abstract: | Energy-based economic development (EBED) can provide economic, social and environmental benefits related to national economic development and sustainable growth activities. As both policy and research interests in responsible mechanisms for economic development grow, EBED benefits are becoming increasingly attractive to planners in both developed and developing countries. The incentives, trade-offs, and payoffs for developing countries, however, are not well documented. To help address that gap, this paper identifies the general scope and role of EBED in a developing economy context, and outlines opportunities and challenges for decision-makers. |
| Keywords: | Economic Development; Energy, Developing Countries, Sustainable Development |
| JEL: | O10 O13 O21 Q48 |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.25&r=cwa |
| By: | Giorgio Gualberti (Instituto Superior Técnico, Lisbon, Portugal); Morgan Bazilian (United Nations Industrial Development Organization, Vienna, Austria); Erik Haites (Margaree Consultants,Toronto, Canada); Maria da Graça Carvalho (Instituto Superior Técnico, Lisbon, Portugal) |
| Abstract: | The United Nations General Assembly declared 2012 the “International Year of Sustainable Energy for All”, officially recognising the urgent need to put energy at the centre of the global development agenda. In parallel, a strong international policy effort is being made to achieve the goal of universal energy access to modern energy services by 2030. To support these efforts, a dramatic scaling-up of financing to the energy sector will be required through official development aid, other official flows, climate financing and various private flows. In this paper we analyse the recent evolution of development policies and finance for the energy sector using both descriptive and analytical tools. We find that, although development finance for the energy sector rose considerably during the past decade, the financial flows have not been directed towards the countries with the lowest levels of energy access. |
| Keywords: | Development Finance, Energy Policy, Energy Access |
| JEL: | F35 Q40 O20 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.12&r=cwa |
| By: | Fujita, Yasuo |
| Abstract: | This paper discusses policy issues pertaining to infrastructure development in low income countries (LICs) in Asia. Infrastructure challenges in Asian LICs have not been adequately highlighted to date mainly because the international focus has often been on African LICs and because large countries such as China, India, and Indonesia attracted more interest among the developing Asian countries. While Asian LICs have sought to improve their infrastructure over the years, the quality and quantity is generally insufficient although significant variations exist between countries and sectors. Since their fiscal space and governmental capacities are limited despite large investment needs, each possible infrastructure investment must be placed in order of priority. In Asian LICs, spatially connective infrastructure (including logistics, telecommunications, and electricity) should be given priority to generate benefits from economies of agglomeration, fragmentation of production activities, and better connectivity to fast-growing large markets, although the trade-off between economic efficiency and spatially balanced growth is a difficult issue. Particularly, some large Asian LICs have great potential to become part of sophisticated regional production networks through effective infrastructure. Climate change, both the adaptation of infrastructure and mitigation through green development, also needs to be sufficiently taken into account or mainstreamed. The fact that the investment in public private partnerships (PPP) projects in infrastructure has recently been increasing in Asian LICs is encouraging. To scale up PPP, Asian LIC governments should clarify the contributions of the private sector (in such aspects as capital investment and operational efficiency), continue to improve the investment climate, policies, and regulations, and prepare bankable projects in which the roles of the public and private sectors are defined. The public sector will continue to be the main provider and regulator of infrastructure in Asian LICs. Although public sector performance should improve, there has been no single blueprint for it, and therefore country-specific approaches are called for. Donors should continue to support Asian LICs in scaling up infrastructure investment through project-financing, technical assistance, and capacity development. Keywords: Infrastructure, low income country, economic integration. |
| Keywords: | Infrastructure, low income country , economic integration , public private partnership , climate change |
| Date: | 2012–03–19 |
| URL: | http://d.repec.org/n?u=RePEc:jic:wpaper:40&r=cwa |
| By: | Mariusz A. Sumlinski; A. J. Al-Eyd; David Amaglobeli; Bahrom Shukurov |
| Abstract: | This paper examines the implications of elevated global food prices for inflation in select Central Asian economies - Kazakhstan, the Kyrgyz Republic, Tajikistan, and Uzbekistan. The findings suggest that global food inflation has significant short-run effects that build over time. Inflation outcomes simulated under alternative global wheat price assumptions underscore these vulnerabilities, and suggest that sustained administrative measures are unlikely to prove effective. In line with structural economic features, the interest rate channel of monetary policy is found to be limited, arguing for a broad policy strategy to control more expansive inflationary pressures. Looking ahead, measures to enhance supply responses, deepen domestic financial markets, develop adequate social safety nets, and increase central bank independence are warranted. |
| Keywords: | Agricultural prices , External shocks , Fiscal policy , Inflation , Monetary policy , Price increases , |
| Date: | 2012–03–22 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:12/86&r=cwa |
| By: | Esfahani, Hadi Salehi (University of Illinois at Urbana-Champaign); Mohaddes, Kamiar (University of Cambridge); Pesaran, Hashem (University of Cambridge) |
| Abstract: | This paper develops a long-run growth model for a major oil exporting economy and derives conditions under which oil revenues are likely to have a lasting impact. This approach contrasts with the standard literature on the "Dutch disease" and the "resource curse", which primarily focuses on short-run implications of a temporary resource discovery. Under certain regularity conditions and assuming a Cobb-Douglas production function, it is shown that (log) oil exports enter the long-run output equation with a coefficient equal to the share of capital (α). The long-run theory is tested using quarterly data on nine major oil economies, six of which are current members of OPEC (Iran, Kuwait, Libya, Nigeria, Saudi Arabia, and Venezuela), plus Indonesia which is a former member, and Mexico and Norway, which are members of the OECD. Overall, the test results support the long-run theory. The existence of long-run relations between real output, foreign output and real oil income is established for six of the nine economies considered. The exceptions, Mexico and Norway, do not possess sufficient oil reserves for oil income to have lasting impacts on their economies. At their current production rates, the proven oil reserves of Mexico and Norway are expected to last 9 and 10 years respectively, as compared to reserve-production ratios of OPEC members, which lie in the range of 45 to 125 years. For Indonesia, whose share of oil income in GDP has been declining steadily over the past three decades, the theory suggests that the effect of oil income on the economy's steady state growth rate will vanish eventually, and this is indeed confirmed by the results. Sensible estimates of α are also obtained across the six economies with long-run output equations, and impulse responses are provided for the effects of shocks to oil income and foreign output in these economies. |
| Keywords: | growth models, long run and error correcting relations, major oil exporters, OPEC member countries, oil exports and foreign output shocks |
| JEL: | C32 C53 E17 F43 F47 Q32 |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6468&r=cwa |
| By: | Olga Pindyuk (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | Kazakhstan’s economy exhibited outstanding real growth of 7.5% in 2011. We forecast that strong GDP growth of 5-6% in real terms will continue in 2012-2014. The oil sector will remain the backbone of the economy, accounting for the bulk of its exports and FDI. Investment growth is forecasted to speed up in 2012-2014 to about 8-10%, in particular owing to a number of state-financed investment projects. Banking sector vulnerabilities have been accumulating, with the share of non-performing bank loans reaching 21.7% and the BTA bank negotiating a second restructuring. |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:wii:fpaper:fc:9:kz&r=cwa |
| By: | Alessandro Cologni (Edison Trading, Edison S.p.A., Italy); Matteo Manera (Department of Statistics, University of Milan-Bicocca and Fondazione Eni Enrico Mattei, Italy) |
| Abstract: | Natural resources are generally associated to negative effects on the political environment of a country. This paper explores the impact that oil revenues have on the establishment of a given political system. Based on previous literature, a political economy perspective is employed. A simple game theoretical approach in order to explain the relationships between oil revenues, political instability (conflicts) and emergence of different political systems is presented. The implementation of particular redistributive fiscal policies together with the possibility that paternalistic or “predatory" autocracies emerge are considered. Under certain circumstances, a process of full democratization is argued not to represent an optimal choice for the oil-rich authoritarian nations. Since governments prefer to remain nondemocratic, in order to prevent internal conflicts from occurring, authoritarian countries have to undertake redistributive activities. Under other assumptions, governments of oil-rich nations prefer to introduce large military sectors. The present analysis determines how the emergence of redistributive of predatory policies depends on relevant parameters related to initial income, oil revenues and social inequality. Finally, we study the importance of socio-ethnical fragmentation in determining the political transition of oil producing nations. |
| Keywords: | Natural Resources, Rentier States, Conflict and Endogenous Political Regimes |
| JEL: | C72 D74 O13 P16 |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.24&r=cwa |
| By: | Josef Pöschl (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | The growth of Turkey's economy was over 10% year-on-year in some quarters of the period 2010-2011. It may have decelerated recently, but it is not yet certain that this will lead to a more or less soft type of ‘landing’; a swift resumption of growth is feasible. In 2011, thanks to high real growth and a rate of inflation between 5% and 10%, growing budget revenues offered a nice opportunity to increase expenditures and decrease the budget deficit at the same time. This 'pro-active' fiscal policy will continue. The central bank, too, supports GDP expansion by keeping the policy rate low. However, this job is a bit tricky. The rate of inflation should not climb over 10%, and the exchange rate should remain rather stable. The high deficit in the current account is a main source of vulnerability. In the case of no major adverse external shock, growth is likely to accelerate again in 2013-2014. |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:wii:fpaper:fc:9:tr&r=cwa |
| By: | Doris Hanzl-Weiss (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | While Slovakia achieved a successful year 2011 – with a GDP growth of about 3.3% – main challenges lie ahead. Due to the ongoing European debt crisis and worsened outlook for its main trade partners Germany and the Czech Republic, we revised our growth forecasts downwards and expect GDP to grow by 1.5% this year. Net exports might remain the main driver of GDP provided that external demand does not weaken even further. In addition, uncertainties derive from the forthcoming parliamentary elections to be held on 10 March 2012. In case of a government dominated by the leftist Smer party led by Robert Fico, we may expect weaker fiscal consolidation and thus slowly reviving private consumption. |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:wii:fpaper:fc:9:sk&r=cwa |
| By: | Luís Francisco Aguiar (Universidade do Minho - NIPE); Teresa Maria Rodrigues (University of Minho); Maria Joana Soares (Universidade do Minho) |
| Abstract: | SWe use wavelet analysis to study the impact of the Euro adoption on the oil price macroeconomy relation in the Euroland. We uncover evidence that the oil-macroeconomy relation changed in the past decades. We show that after the Euro adoption some countries became more similar with respect to how their macroeconomies react to oil shocks. However, we also conclude that the adoption of the common currency did not contribute to a higher degree of synchronization between Portugal, Ireland and Belgium and the rest of the countries in the Euroland. On the contrary, in these countries the macroeconomic reaction to an oil shock became more asymmetric after adopting the Euro. |
| Keywords: | Oil prices; Business cyles, the Euro, Optimum Currency Areas; Wavelet analysis |
| JEL: | Q43 C22 E32 F44 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:nip:nipewp:07/2012&r=cwa |
| By: | Weill, Laurent (BOFIT); Godlewski, Christophe (BOFIT) |
| Abstract: | This paper examines motivations for large firms to choose an Islamic loan over a conventional loan. This investigation helps understanding the causes of the expansion of Islamic finance activities. We employ a dataset of Islamic and conventional syndicated loans from countries from the Middle East and from Southeast Asia for the period 2001-2009, testing determinants for the choice of an Islamic loan at the facility, firm, and country level. We find that loan characteristics do not influence the choice of an Islamic loan, suggesting that borrowers asking for an Islamic loan are not rationed in terms of maturity and amount. The quality of the borrower does not lead to influence the choice of an Islamic loan, meaning that Islamic loans are not associated with a different default risk than conventional loans. We identify three country-level determinants as potential driving forces expanding the preference for Islamic loans. The strongest determinant is religiosity, i.e. the share of Muslim population in a country, but the quality of institutions and level of financial development also play substantial roles. |
| Keywords: | Islamic banks; loans |
| JEL: | G21 G32 O16 |
| Date: | 2012–04–13 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofitp:2012_007&r=cwa |
| By: | Daria Zakharova; Charleen Gust |
| Abstract: | Though many aspects of Russia's fiscal policy framework are close to best practice on paper, actual practice in recent years has been moving away from best practice. In particular, the continued focus on the overall rather than the nonoil balance, and the regular use of supplemental budgets to spend windfall oil revenues contribute to procylicality of fiscal policy, risking costly boom-bust cycles. Against this background, this paper suggests several improvements to the framework for fiscal policy. |
| Keywords: | Commodity price fluctuations , Fiscal policy , Fiscal sustainability , Nonoil sector , Oil prices , Oil producing countries , Oil revenues , |
| Date: | 2012–03–14 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:12/76&r=cwa |
| By: | Peter Havlik (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | The Russian GDP grew by more than 4% in 2011 thanks to a robust recovery of fixed investment, construction and consumer expenditures. The contribution of net exports to GDP growth was sharply negative (despite a sizeable nominal increase in trade and current account surplus). wiiw reckons with unspectacular GDP growth during 2012-2014, assuming no abrupt policy changes or external shocks. Export revenues will grow rather slowly owing to stagnating volumes of exported oil and gas; import volumes are expected to grow at a faster rate as household consumption and investment will gradually pick up, both fuelled by the ongoing real currency appreciation. In the medium and long run, reforms and investments (including FDI) may be stimulated by WTO membership, while the attempted modernisation drive will hardly succeed any time soon. With some luck the annual CPI inflation may gradually drop to 5% and the budget deficit will remain balanced. |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:wii:fpaper:fc:9:ru&r=cwa |
| By: | Ayyagari, Meghana; Demirguc-Kunt, Asli; Maksimovic, Vojislav |
| Abstract: | This paper reviews and synthesizes theoretical and empirical research on the role of finance in developing countries. First, the paper presents the stylized facts about firms in developing nations as well as the legal, financial and broader institutional framework in which these firms operate. Next, the paper focuses on the financing choices available to small and medium firms in developing countries and highlights areas needing additional research. |
| Keywords: | Debt Markets,Access to Finance,Emerging Markets,Financial Literacy,Banks&Banking Reform |
| Date: | 2012–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6036&r=cwa |