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on Central and Western Asia |
| By: | Katia Rocha; Ajax Moreira; Gabriel Fiuza; Marcelo Pessoa |
| Abstract: | O estudo analisa o papel das características institucionais do país (governança) e do sistema financeiro doméstico (desenvolvimento, eficiência, estabilidade e abertura de capital) nos determinantes dos spreads de títulos corporativos emergentes emitidos no mercado internacional. Propõe-se um modelo econométrico de dados em painel com os spreads corporativos do Corporate Emerging Markets Bond Index Broad Diversified (Cembi Broad Diversified) no período de 2002 a 2011 para vinte economias emergentes. Os spreads soberanos analisados de África do Sul, Argentina, Brasil, Cazaquistão, Chile, China, Colômbia, Coreia do Sul, Filipinas, Índia, Indonésia, Malásia, México, Peru, Rússia, Singapura, Tailândia, Turquia, Ucrânia e Venezuela, constituíam em junho de 2013 aproximadamente 80% do Cembi Broad Diversified. Conclui-se que políticas que promovam liberalização financeira, abertura de capital, austeridade fiscal, desenvolvimento do sistema financeiro doméstico e melhorias em elementos institucionais do governo, como aparato legal e qualidade da regulação, têm potencial de reduzir os spreads corporativos dos mercados emergentes, em especial em momentos de aversão ao risco global. Os resultados indicam que iniciativas visando ao aprimoramento institucional do governo e ao desenvolvimento do mercado de capitais podem baratear as captações de empresas emergentes e, consequentemente, aumentar a participação do investimento privado. The study analyses the role of institutional characteristics of a country (governance) and the domestic financial system (depth, efficiency, stability, and capital openness) in determinants of emerging market corporate bond spreads issued in international market. We propose an econometric panel data with corporate bond spreads of CEMBI Broad Diversified Index in the period of 2002–2011 to twenty emerging economies. The sovereigns analyzed: Argentina, Brazil, Chile, China, Colombia, India, Indonesia, Kazakhstan, South Korea, Malaysia, Mexico, Peru, Philippines, Russia, Singapore, South Africa, Thailand, Turkey, Ukraine and Venezuela corresponded to roughly 80% of CEMBI Broad Diversified Index in July 2013. We conclude that policies that promote financial liberalization, capital openness, fiscal austerity, development of domestic financial system and improve governance institutional characteristics as rule of law and regulatory quality have the potential to reduce emerging market corporate bond spreads, especially in moments of global risk aversion. Results indicate that initiatives looking forward the improvement of institutional government apparatus and capital market development may help emerging market companies to increase the share of private capital investment. |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:ipe:ipetds:1978&r=cwa |
| By: | Alberto Behar; Jaime Espinosa-Bowen |
| Abstract: | This paper quantifies the effect of realized and potential global growth disappointments on export volumes from the Middle East, North Africa, the Caucasus, and Central Asia. Estimates of export elasticities with respect to trading partner GDP indicate non-oil export volumes are relatively responsive while service exports are less responsive. Downward revisions to global GDP growth for 2011–14 have impeded export performance, and the possibility of disappointing GDP growth in Europe and emerging markets presents further downside risks for exports. The Maghreb countries are particularly sensitive to developments in Europe, while CCA countries are more susceptible to growth in the BRICS. |
| Keywords: | External shocks;Middle East and Central Asia;Spillovers;Exports;Economic models;Gravity model, exports, spillovers, trade, Middle East, North Africa, Caucasus, Central Asia |
| Date: | 2014–05–09 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:14/80&r=cwa |
| By: | Tansel, Aysit (Middle East Technical University); Karaoglan, Deniz (Middle East Technical University) |
| Abstract: | This is the first study which provides empirical analysis of the variation in health behaviors for adult men and women in Turkey which is a developing country. The health behaviors considered are smoking, drinking, fruit and vegetable consumption, exercise and body mass index (BMI). We find that in Turkey education is the most important factor that affects the health behaviors. The results indicate that smoking is positively associated with education at all levels with a decreasing effect with the level of education unlike in the developed countries. This result indicates that smoking is a serious public health problem in Turkey at all levels of education. Further, alcohol consumption and schooling are positively related and it increases by the level of education. Higher educated individuals clearly eat more fruits, vegetables and exercise more and their BMI levels are in the normal range compared to less educated and illiterate. We also highlight the importance of demographic factors, labor market status and household income. We use Health Survey of Turkish Statistical Institute (TURKSTAT) for years 2008, 2010 and 2012. This study will provide a baseline for further studies on the various aspects of health behaviors in Turkey. |
| Keywords: | health behaviors, education, demographic factors, Turkey |
| JEL: | I10 I12 I19 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8262&r=cwa |
| By: | International Monetary Fund. Middle East and Central Asia Dept. |
| Abstract: | KEY ISSUES Context. Over the past decade, Afghanistan has made enormous progress in reconstruction, development and lifting per capita income. Security and political uncertainties, and weak institutions have constrained growth and weighed on social outcomes. With significant reform efforts and donor support, Afghanistan has maintained macroeconomic stability, implemented important structural reforms, and built policy buffers, but significant vulnerabilities remain. The IMF has been supporting Afghanistan through technical assistance and a three-year Extended Credit Facility (ECF) arrangement. Reviews under the ECF arrangement have been delayed. Outlook and risks. 2014 is a crucial year in the political and security transitions and the run-up to the “transformation decade†(2015–24). Assuming smooth political and security transitions, continued reform and donor financing, the outlook should be positive. Large security and development expenditure needs and a limited domestic revenue capacity mean that Afghanistan will remain dependent on donor financing for an extended period. Macroeconomic stability, structural reforms, and political and security stability are needed to ensure inclusive growth. Risks, mostly on the downside, are related to adverse domestic or regional security developments, political instability, inadequate implementation of economic policies, and donor fatigue. Policy recommendations. The authorities’ economic strategy (maintaining macroeconomic stability, strengthening the financial sector, improving economic governance, and moving toward fiscal sustainability) remains appropriate and needs strengthened implementation. Sustained implementation of this strategy will safeguard growth and build buffers to help manage shocks. Policies should continue to aim at strengthening revenue collection, managing money growth to control inflation while preserving exchange rate flexibility, strengthening bank supervision, and quickly enacting anti-money laundering (AML), countering financing of terrorism (CFT), banking, central bank, and value-added tax legislation. |
| Keywords: | Article IV consultation reports;Economic conditions;Fiscal policy;Fiscal reforms;Corruption;Monetary policy;Inflation targeting;Economic indicators;Millennium Development Goals;Extended Credit Facility;Debt sustainability analysis;Staff Reports;Press releases;Afghanistan; |
| Date: | 2014–05–21 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:14/128&r=cwa |
| By: | International Monetary Fund. Middle East and Central Asia Dept. |
| Abstract: | KEY ISSUES Context. Iran had achieved considerable progress in raising per capita income and living standards in previous decades. But in recent years, such progress stalled as both domestic policies and the external environment deteriorated. Inflation has increased sharply and non-oil growth is well below potential. Corporate and financial-sector vulnerabilities have emerged, and unemployment rates are high. A difficult external environment and domestic vulnerabilities raise the risk of entrenching the economy in a low-growth high-inflation scenario. The authorities are well aware of the challenges and the reforms needed, but face a highly-complex institutional set-up and socio- political context. Advancing reforms will require broad political commitment and needs to be supported by strong coordination and cooperation among key policymakers. A highly uncertain outlook. Facing continued constraints on oil revenues and to carry out international transactions, the economy is expected to continue to contract in 2013/14. With some positive tailwinds from the external side and modest incipient signs that the pace of contraction in domestic demand is slowing, economic activity would begin to stabilize in 2014/15. While the current outlook is subject to downside risks, the interim agreement with the P5+1 also brings upside risks. Were this progress to derail, the economy could be subject to new adverse shocks. Dealing with stagflation. The policy mix should support the economy while also gradually reducing inflation. Fiscal deficits should be contained at around 2–3 percent of GDP, by broadening the revenue base away from oil and by keeping a tight lid on spending. This should be complemented by reforms that boost the supply side (product, labor, and credit markets) as well as the demand side (to restore monetary policy credibility, reduce uncertainty, and better coordinate fiscal management). Subsidy Reform. Iran’s design of the subsidy reform has been exemplary and the reform remains a priority. Plans to increase domestic energy prices gradually are prudent but should be underpinned by an automatic price adjustment mechanism to ensure full implementation, by consistent macroeconomic policies, and by reforms to foster the adoption of new technologies and tighter budget constraints, particularly in energy- intensive sectors. Strengthening the Policy Framework. Fiscal reforms should empower the scope for countercyclical fiscal policy, better support macroeconomic stability, and be framed within a medium-term expenditure planning to limit fiscal risks. Priority needs to be given to price stability, by improving the mandate and operational autonomy of the Central Bank of Iran and by reviewing government-mandated credit policies. Work to unify the exchange rate should be initiated, while preserving flexibility ahead to ensure competitiveness. Reforms to Promote Growth and Jobs. There is a need to improve business regulations, advance effective privatizations, and reduce nonwage labor costs. Addressing weaknesses in the banking system is important, including by improving the supervisory and crisis preparedness frameworks. |
| Keywords: | Article IV consultation reports;Economic growth;External shocks;Disinflation;Monetary policy;Fiscal consolidation;Fiscal reforms;Economic indicators;Debt sustainability analysis;Staff Reports;Press releases;Iran; |
| Date: | 2014–04–04 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:14/93&r=cwa |
| By: | International Monetary Fund. Middle East and Central Asia Dept. |
| Keywords: | Fiscal policy;Subsidies;Fiscal reforms;Monetary policy;Inflation;Sovereign wealth funds;Selected issues;Iran; |
| Date: | 2014–04–04 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:14/94&r=cwa |
| By: | Natan P. Epstein; Rafael Portillo |
| Abstract: | This paper analyzes the monetary policy framework in Kazakhstan. The authorities have been successful in containing inflation in the context of a managed exchange rate regime. Over the past two years, the central bank has taken steps to enhance its ability to regulate liquidity in the financial system. However, the current policy interest rate does not properly signal the stance of policy, reflected in a weak transmission from the policy rate to money market interest rates. With the use of a stylized model, the paper studies the macro determinants of money market interest rates under the current framework, and illustrates both the benefits and challenges of active interest rate policy. The model shows that limited use of instruments to steer short-term interest rates weakens the framework’s ability to counteract shocks. Finally, the paper explores the implications of varying degrees of exchange rate flexibility for interest rate policy and open market operations. |
| Keywords: | Monetary policy;Kazakhstan;Exchange rate regimes;Interest rates;Money markets;External shocks;Devaluation;Econometric models;Monetary Policy, Interest Rate, Money Market, Exchange Rate. |
| Date: | 2014–06–13 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:14/108&r=cwa |
| By: | International Monetary Fund. Middle East and Central Asia Dept. |
| Abstract: | KEY ISSUES Context and recent developments. Performance under the 2010–13 program, which was supported by arrangements under the Extended Fund Facility and Extended Credit Facility, was sound, with growth restored, large fiscal and external imbalances reduced, and buffers rebuilt. However, challenges remain, particularly in further reducing vulnerabilities and strengthening medium-term growth dynamics. Growth and inflation have remained volatile—in 2013, growth slowed significantly and inflation rose well above the CBA’s target range. The external current account deficit and dollarization continue to be high, keeping the economy vulnerable to shocks. Poverty and unemployment also remain high, and the transition to an alternative to the pre- crisis, construction-led growth model—involving a more open, competitive, and globally- and regionally-integrated economy—has been slow. Program objectives. In light of these challenges, the Armenian authorities have requested a new 38-month arrangement under the Extended Fund Facility, with access equivalent to SDR 82.21 million (89.4 percent of quota). Key objectives of the new program are to consolidate stability and buffers against possible external shocks and to support growth through further reforms in the transition towards a dynamic emerging market economy. Program policies. Fiscal policy will support the growth recovery in 2014 by providing a modest stimulus, before moving to a gradual consolidation stance in 2015–17. This will place public debt on a declining path during the program period. Revenue measures will support the consolidation and also create room for addressing social and investment needs. Monetary and exchange rate policies will be guided by the authorities’ framework of inflation targeting and exchange rate flexibility, with program policies focusing on continued improvements in monetary operations, communications, and modeling. Financial sector policies will target implementation of remaining recommendations of the 2012 FSAP Update, which aim to promote resilience to shocks and greater financial deepening. Structural reforms will support medium-term growth by targeting improvements in the business climate, strengthening institutions, improving connectivity and competition, creating a stronger environment for private and foreign direct investment, and tackling key risks, especially in the energy sector. Staff views. Staff supports the authorities’ request for an Fund-supported program. The LOI/MEFP provides a strong set of policies to pursue the objectives of the program. While the program is not without risks, staff assesses Armenia’s repayment capacity to be robust, with the fiscal consolidation and growth-supporting reforms embedded in the program reinforcing this assessment. If the program’s policies are implemented, and barring any major shocks, the program should be able to achieve exit from Fund support, with Armenia sustaining market access at the end of the program period. |
| Keywords: | Extended Fund Facility;Economic growth;Fiscal policy;Government expenditures;Poverty reduction strategy;Fiscal reforms;Monetary policy;Inflation targeting;Economic indicators;Debt sustainability analysis;Staff Reports;Press releases;Armenia; |
| Date: | 2014–03–31 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:14/89&r=cwa |
| By: | International Monetary Fund. Middle East and Central Asia Dept. |
| Keywords: | Financial sector;Interest rates on deposits;Interest rates on loans;Bank rates;Credit risk;Liquidity;Lapse of time consideration;Selected issues;Azerbaijan; |
| Date: | 2014–06–11 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:14/160&r=cwa |