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on Central and Western Asia |
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Issue of 2022‒05‒23
six papers chosen by |
| By: | Paul J. J. Welfens (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW)) |
| Abstract: | The launch of Russia’s war of aggression against Ukraine on February 24th, 2022, has resulted in great suffering for the people of Ukraine and has created turning point in Europe. Western countries and Japan have imposed very comprehensive sanctions against Russia, the aggressor. The country is largely politically isolated on the international stage, but seemingly has China - still - on its side. Large movements of refugees are to be expected, along with sharp price increases for gas and - somewhat less so - for oil, but also for wheat, with Russia and Ukraine being important exporter countries of that commodity representing together a combined 28% share of the world market. Some economists have suggested Germany impose an energy import boycott against Russia. A realistic analysis, however, arrives at significantly higher losses in real income than the 0.5% to 3% found, for example, by Bachmann et al. (2022), although additional retaliatory measures (e.g., tariff increases) by Russia and other effects must indeed also be considered: -6% in terms of real income and increased unemployment rates are conceivable as an overall effect in Germany; and there will be negative Russian spillover effects to central Asian countries which also have not been considered in the Bachman et al approach. On March 23rd, President Putin declared that Russia’s energy exports to “unfriendly countries” would have to be paid for in Rubles in the future, which is a clear strategic move in terms of the international economic conflict between the West and Russia. The latter could itself impose an energy supply boycott on Germany and also other EU countries. Additional supplies from, say, the US - in the form of liquefied natural gas (LNG) - would be limited in relation to the redistribution of supplies within the EU, as the pipeline network is still poorly integrated. Poland, Bulgaria, Austria, Germany and Italy are likely to face particular problems with natural gas supplies in the event of an energy import boycott. As of May 24th, 2022, US citizens will not be allowed to accept interest payments from either private Russian companies or the Russian state; this measure is peculiar and hardly compatible with the idea of a constitutional state, since even companies from Russia that are not actually in danger of bankruptcy will be artificially pushed toward bankruptcy - with the US switching to preventing Dollar bond payments to April 6th (due to the Russian massacre in Bucha, Ukraine), the first Russian bond interest payment missed concerned Russian Railways on April 11th. The very high current and expected numbers of refugees will have positive demand effects in certain countries in 2022 and positive supply effects in overall economic production thereafter. The global economy will be marked by a new economic slowdown and higher inflation rates in 2022/23; it could face a breakup into regional “blocs” and a reduced effectiveness of international economic organizations in the event of international economic conflicts. The weakening of the international legal order should be countered by OECD countries. The figures presented by the Kiel Institute for the World Economy for combined humanitarian, financial and military support to Ukraine are grossly misleading; if one takes into account the important spending on refugees from Ukraine and the corresponding (implied) pledges by OECD countries, EU spending in favour of the Ukrainian people is significantly higher than that of the US, and Germany's spending is also significantly higher than shown in the Kiel study. A new and lasting order for peace in Europe is urgently required. An EU eastern enlargement to include Ukraine will bring about new BREXIT-type risks and could destabilize the EU considerably. |
| Keywords: | Ukraine war, Russia sanctions, economic effects of the war in Ukraine, US, EU, international economic order, aid for Ukraine |
| JEL: | F50 F51 N44 Q48 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:bwu:eiiwdp:disbei312&r= |
| By: | Tim O'Brien (Center for International Development at Harvard University); Thảo-Nguyên Bùi; Ermal Frasheri (Center for International Development at Harvard University); Fernando Garcia; Farah Hani (Center for International Development at Harvard University); Eric S. M. Protzer (Center for Global Development); Ricardo Villasmil; Ricardo Hausmann (Center for International Development at Harvard University) |
| Abstract: | This report aims to answer the critical but difficult question: "What will it take for Jordan to grow?" Though Jordan has numerous active growth and reform strategies in place, they do not clearly answer this fundamental question. The Jordanian economy has experienced more than a decade of slow growth. Per capita income today is lower than it was prior to the Global Financial Crisis as Jordan has experienced a refugee-driven population increase. Jordan’s comparative advantages have narrowed over time as external shocks and responses to these shocks have changed the productive structure of Jordan’s economy. This was a problem well before the country faced the COVID-19 pandemic. The Jordanian economy has lost productivity, market access, and, critically, the ability to afford high levels of imports as a share of GDP. Significant efforts toward fiscal consolidation have further constrained aggregate demand, which has slowed non-tradable activity and the ability of the economy to create jobs. Labor market outcomes have worsened over time and are especially bad for women and youth. Looking ahead, this report identifies clear and significant opportunities for Jordan to strengthen new engines of export growth that would enable better overall job creation and resilience, even amidst the continued unpredictability of the pandemic. This report argues that there is need for a paradigm shift in Jordan’s growth strategy to focus more direct attention and resources on activating “agents of change” to accelerate the emergence of key growth opportunities, and that there are novel roles that donor countries can play in support of this. |
| Keywords: | COVID-19, Growth Diagnostics, Trade, FDI, Green Growth, Inclusive Growth, Jordan, Telework, Structural Transformation |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:cid:wpfacu:411&r= |
| By: | International Monetary Fund |
| Abstract: | The mission to Armenia took place between September 27–October 8, 2021 to assist the authorities to improve their Government Finance Statistics (GFS) compilation practices. The technical assistance (TA) mission was conducted by Ms. Ivana Jablonská and Mr. David Bailey at the request of the Ministry of Finance (MOF) and with the support of the IMF´s Middle East and Central Asia Department (MCD). The main objectives of the mission were to assist the authorities in finalizing a comprehensive sectorized list of all public sector units —known as, the public sector institutional table (PSIT) — and in compiling annual general government GFS data for 2020. |
| Date: | 2022–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:2022/094&r= |
| By: | Akbobek Akhmediyarova (NAC Analytica, Nazarbayev University) |
| Abstract: | In this paper we analyse the drivers of housing price fluctuations in Kazakhstan using a dynamic stochastic general equilibrium (DSGE) model with the housing market. We estimate the model with Bayesian methods using the data for the period from 2010Q1 to 2020Q4. We find that housing prices are primarily driven by housing preference shocks, rather than by price mark up disturbances or monetary policy shocks. We identify strong housing wealth effects and show that housing preference shocks of borrowers explain a vast part of the consumption volatility. Besides, we find that pension withdrawal policy plays a small role in determining the business-cycle fluctuations of Kazakhstan in the long-term period. Overall, the technology shock is key in explaining the variance in GDP of Kazakhstan, while the variation in inflation rate is mainly explained by monetary policy and foreign demand shocks. |
| Keywords: | DSGE; Housing market; Bayesian estimation; Kazakhstan. |
| JEL: | C11 E30 E32 R21 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:ajx:wpaper:19&r= |
| By: | International Monetary Fund |
| Abstract: | Activity returned to its pre-COVID level in 2021. Inflation remains well above the NBK’s 4–6 percent target band, and spillovers from sanctions on Russia will exacerbate price pressures and weaken economic growth in 2022. Kazakhstan benefits from strong fiscal and external buffers but risks to the outlook are elevated due to the uncertain impact on Kazakhstan of the sanctions on Russia and heightened domestic tensions since the January social unrest episode. In the medium term, non-oil growth under the baseline is expected to converge to about 4 percent. Sustainable growth will require greater economic diversification. Climate-related challenges are acute for Kazakhstan given its outsized hydrocarbon sector, high per-capita greenhouse gas emissions, and low domestic energy prices. |
| Date: | 2022–04–11 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:2022/113&r= |
| By: | International Monetary Fund |
| Abstract: | Selected Issues |
| Date: | 2022–04–11 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:2022/114&r= |