Migrant Remittances Provide Resilience Against Disasters in Africa

How responsive are migrant remittances to various disasters, both natural and human-made? Would remittances be affected by systemic financial crises, such as the 2008–09 financial crisis, or more recent crises affecting the Eurozone? Using panel data on 23 sub-Saharan African (SSA) countries from 1980 to 2007, we find that remittances are slow to respond to natural disasters, unresponsive to outbreaks of conflict, and will slowly decline following a systemic financial crisis. This suggests that, given its stability, remittances are sources of resilience in SSA.     

The Economics of the 'Arc of Instability'

Why are the Melanesian states of Fiji, Papua New Guinea, Solomon Islands and Vanuatu experiencing considerable civil unrest and, in this respect, why are they so different from the other small island states of the Pacific region? It is argued that while, like the other Pacific island countries, they have had poor economic growth and high birth rates, they do not have easy emigration to high‐income countries. Therefore, they have large pools of under‐employed people. Other distinguishing characteristics are their richness in natural resources and weak central governments relative to local‐level power structures. The civil unrest derives from competition for the natural resources in an environment of weak states and hence poorly defined and enforced property rights, and moreover, the large pool of under‐employed provides ample scope for the creation of grievances to back up the claim for the resources. One message for donor nations is that the provision of compensation to settle the grievances will likely only generate further grievances and not resolve the basic problem.     

主要农业自然灾害对我国粮食安全影响的实证研究

粮食问题一直是我国政府和全社会关注和研究的热点问题,而农业自然灾害又是粮食问题不可忽视的重要方面。农业自然灾害究竟在多大程度上影响我国粮食综合生产能力,我国农业自然灾害抵御能力的评价及其在多大程度上能够保障粮食生产的稳定性、供给的安全性仍值得研究。论文围绕主要农业自然灾害对我国粮食综合生产能力的影响分析,对各种主要农业自然灾害对粮食生产能力的影响程度分别进行了实证分析,并提出相应的对策建议。     

Transboundary Problems of Overcoming Natural Disasters for International Regional Organizations in the Eurasian Region

Based on the example of Central Asia, this paper has examined the problems of transborder cooperation among countries in order to reduce damage from natural disasters and suggested a common methodology for assessing social risks.     

Exiting from Fragility in Sub‐Saharan Africa: The Role of Fiscal Policies and Fiscal Institutions

This paper studies the role of fiscal policies and institutions in building resilience in sub‐Saharan African countries, focussing on 26 countries that were deemed fragile in the 1990s. We use a probabilistic framework together with GMM estimation to address endogeneity and reverse causality. We find that fiscal institutions and fiscal space, namely the capacity to raise tax revenue and contain current spending, as well as the quality of public expenditure, are significantly and robustly associated with building resilience. Similar conclusions arise from a qualitative study of 7 sub‐Saharan African countries in the sample that built resilience since the 1990s.     

Disasters and trade: did Hurricane Katrina affect US imports?

Hurricane Katrina (2005) was the most devastating natural disaster in US history since San Francisco in 1906. A budding literature on disasters and trade suggests that while the impact of natural disasters on small and/or developing countries is significant, the effects on developed countries is not significant. This paper adds to the literature by focusing on a single event for a developed country, the US. In so doing, the aggregation problems of panel studies of many disasters over many countries is avoided. The results suggest that while terrible, Katrina’s effect on US imports was not statistically significant. Estimates of the long-run cointegrating relationship of import demand detected neither the presence of extraordinarily more nor less imports during the period studied (1983:1 to 2008:2). Small, short-run decreases, then increases, can be attributed to the direct effect of a small decline in overall economic activity alone. Recent estimates for income and price elasticities are also obtained and the results compared to other recent shocks, namely, the mild recession of 1990–1991 and the recession and trade collapse in 2008.     

Rethinking the role of sovereign wealth funds in small island developing states: evidence from Tuvalu and Kiribati

This paper examines the important role that can be played by sovereign wealth funds in financing of disaster risk management. The governments of Tuvalu and Kiribati are predicting climate change and natural disaster risks imposing increasing financial pressure on their economies. Having the required financial response in the aftermath of disasters is important to these low‐lying atolls. The long‐term sustainability of sovereign wealth funds in Kiribati and Tuvalu in contributing to ex post disaster risk management is examined.     

The Tet offensive: A turning point in America's Asian policy

A series of financial crises in emerging market economies during the 1990s have been a catalyst for efforts to strengthen the international financial system. Indeed, much has been done to strengthen the architecture of the international financial system, both in terms of crisis prevention and crisis management. The powerful G‐7 countries have made it clear that the International Monetary Fund (IMF) plays a significant role in shaping the new global financial architecture. However, is the IMF up to the task? This paper argues that despite its many limitations, the IMF is an important institution that can strengthen the global financial system. The paper begins with a discussion of what the IMF is and what it is not This will help put in perspective the nature, mandate, and role of this much‐misunderstood global institution. The second section reviews some of the recent reforms the IMF has introduced to effectively carry out its new function. While these reforms are hardly revolutionary, they nevertheless, will significantly strengthen both the domestic and international financial system. The third section examines the Achilles heel of the IMF—that its policies promote moral hazard. How effectively have the IMF reforms addressed this? It is argued that although the problems associated with moral hazard can never be fully eliminated, the IMF reforms will greatly mitigate the problem. It is very likely that for the foreseeable future, the IMF will continue to serve as an informal international lender of last resort.     

Financial Development and Economic Growth in Sub‐Saharan African Countries: Evidence from Time Series Analysis

Abstract: This paper seeks to empirically explore the causal link between the level of financial development and economic growth in 13 sub‐Saharan African countries. The empirical investigation is carried out in a vector autoregression (VAR) framework based on the theory of cointegration and error‐correction representation of cointegrated variables. The results of the cointegration analysis provide evidence of the existence of a long‐run relationship between financial development and economic growth in almost all (12 out of 13) of the countries. With respect to the direction of long‐term causality, the results show that financial development plays a causal role on economic growth, again in eight of the countries. At the same time, evidence of bidirectional causal relationships is found in six countries. The findings imply that African countries can accelerate their economic growth by improving their financial systems.     

Workers' Remittances,Capital Inflows,and Economic Growth in Developing Asia and the Pacific

This paper examines the impact of remittances on economic growth, using developing countries in Asia and the Pacific as a case study. Using data for the period 1993–2013, our results show that remittances only generate negative and significant impacts on economic growth if they reach 10 percent of GDP or higher. A remittances‐to‐GDP ratio of below 10 percent could still impact growth negatively, but the effect is statistically insignificant. The present study finds some degree of substitutability between remittances and financial development. Foreign direct investment (FDI), but not other types of capital inflow, contributes significantly to economic growth. Other traditional growth engines, including education, trade openness, and domestic investment, are crucial in promoting growth in developing Asian and Pacific nations.     

Debt Sustainability and the Ongoing Financial Crisis: The Case of IDA‐only African Countries*

Abstract: The ongoing financial crisis has raised concerns in many circles about a potential future wave of sovereign defaults spreading among developing countries and, therefore, the need for additional rounds of debt relief in poor indebted countries. This paper addresses this issue for a group of 31 International Development Association (IDA)‐only African countries, which are in a fragile debt situation. Using the most recent debt sustainability analyses (DSAs) undertaken for these countries by the World Bank and the IMF, this paper studies the potential adverse effect of the ongoing financial crisis on the countries’ debt burden indicators, as a function of the depth and length of the crisis. The latter is measured by the fall and the duration of such fall in exports revenues, and by the terms at which each country can obtain financing to muddle through the crisis period. The analysis underscores the importance of concessional financing for these countries, especially if the crisis proves to be a protracted one. This, because the likelihood of countries being able to muddle through the crisis without defaulting on their external debt decreases with the hardening of the financial conditions faced by them — alternatively, the size of the downsizing in domestic (fiscal) expenditures needed to ensure the service of their foreign debts increases with the tightening of financial conditions.     

Does East Asia Have a Working Financial Safety Net?

Financial safety nets in Asia have come a long way since the Asian financial crisis (AFC) of 1997/1998. With Asian countries not wanting to rely solely on the IMF again, the Chiang Mai Initiative (CMI) was created in 2000. When the CMI also proved inadequate following the global financial crisis, it was first multilateralized (CMIM), and then doubled in size to US$240bn, while the IMF de‐linked portion was increased to 30 percent of the available country quotas. A surveillance unit, the ASEAN+3 Macroeconomic Research Office, was set up in 2001. These are impressive developments, but are they enough to make the CMIM workable? Without clear and rapid‐response procedures to handle a fast‐developing financial emergency, we argue that it is unlikely that the CMIM will be used even as a complement to the IMF. To serve as a stand‐alone option, however, its size or the IMF de‐linked portion of funds needs to be further increased, as does its membership, to add diversity. Only if the ASEAN+3 Macroeconomic Research Office can develop into an independent and credible surveillance authority would it then perhaps be in a position to lead the next rescue.     

Regional Trade Agreements in East Asia: Will They Be Sustainable?*

By assessing the sustainability of regional trade agreements (RTAs) for East Asia, we quantitatively evaluate the likely impact of proposed East Asian RTA strategies on the East Asian economies and the world economy with respect to consumption, production, volume of trade and terms of trade effects by applying a multi‐country and multi‐sector computable general equilibrium model. These strategies include: (i) the ASEAN Free Trade Area (AFTA: a being‐left‐alone strategy); (ii) an ASEAN Hub RTA (a hub‐and‐spoke type of overlapping RTA strategy); (iii) the AFTA versus a China–Japan–Korea RTA (a duplicating or competing RTA strategy); and (iv) an ASEAN+3 RTA (an expansionary RTA strategy). We find that an expansionary ASEAN+3 RTA could be a sustainable policy option because the members’ gains would be significantly positive, with more equitably distributed gains between members than when using other strategies. The effect on world welfare would also be positive and the negative effect on nonmembers would not be very strong. More interestingly, if the East Asian countries cooperate with Pacific Basin countries to form an APEC‐level RTA, such as a free trade area of the Asia‐Pacific, the extension of the regional trade bloc might be considered a more desirable policy option than the proposed East Asian RTAs for East Asian economies, even though countries excluded from the free trade area of the Asia Pacific are worse off.     

亚洲转向：从防通胀到保增长

11月12日，中国国家主席胡锦涛在美国出席亚太经合组织工商领导人峰会并发表主旨演讲时指出，中国的发展是促进亚太地区和世界经济增长的重要力量，我们欢迎亚太工商界人士积极参与中国改革开放和现代化进程，共享中国经济发展带来的机遇和成果，共同创造亚太地区更加美好的未来。     

Regulating for telecommunications competition in developing countries: Papua New Guinea

Papua New Guinea is a low‐middle income, developing, Pacific country whose telecommunications market has developed under regulatory arrangements strongly influenced by Australian policymaking. Nevertheless, it demonstrates very weak performance compared to similar low‐middle income countries. Why does a country whose regulatory regime draws on current international recommended ‘best practice’ perform so poorly? We develop an inquiry framework based on World Bank and the International Telecommunications Union guidelines for assessing the effectiveness of regulatory arrangements in a developing country. The framework takes account of developing country challenges: limited capacity, limited commitment, limited accountability, limited fiscal efficiency, and trade‐offs between factors that take account of these limits. The analysis indicates the most likely explanation for poor performance derives from lack of investment and an unstable set of ownership arrangements constraining government‐owned Telikom from being an effective competitor. Weaknesses in regulator accountability provisions may have contributed to obscuring poor performance. Introducing at least one more foreign operator will improve outcomes only with clear separation of government ownership and regulatory activities and credible commitment from political agents to refrain from interfering in operations of both the incumbent firm and regulatory agencies.     

The economics of natural disasters in a developing country: The case of Vietnam

We examine the impact of natural disasters on annual output growth in Vietnam. Using provincial data for primary and secondary industries, we employ the Blundell–Bond General Method of Moments procedure to estimate the impact of disasters on the macroeconomy. We show that more lethal disasters result in lower output growth but that disasters that destroy more property and capital actually appear to boost the economy in the short-run. This is consistent with the ‘investment-producing destruction’ hypothesis that we outline. However, we find that disasters have a different macroeconomic impact in different geographical regions; these differences are potentially related to the ability to generate transfers from the Vietnamese central government.     

Toward regional financial and monetary cooperation in East Asia1

The financial and economic crisis in 1997–98 came as a dramatic shock to East Asian economies, and has prompted to institutionalize a regional financial and monetary cooperation. This paper demonstrates the strong will of East Asian countries to develop the regional financial and monetary cooperation, outlines recent developments, and provides possible prospects for the future. It points out that the option to keep consistent with the IMF system actually weakens regional solidarity, and recommends an immediate establishment of a strong regional surveillance and peer pressure mechanism for the Chiang Mai Initiative (CMI) to evolve into a common pool of foreign exchange reserves, a sort of East Asian IMF. It also argues that East Asian countries should closely coordinate their exchange rate regime to maintain intra‐regional and extra‐regional exchange rate stability.     

Mexico from bust to boom: A political evaluation of the 1976–1979 stabilization programme

This paper evaluates Mexico's recent experience of economic stabilization policies (under the the 3-yr Extended Fund Facility arranged with the IMF in September 1976) from a comparative politics standpoint. By comparison with various South American experiences of inflation and stabilization that were discussed in the same Wilson Centre workshop, Mexico's short-term performance must be rated quite favourably. This was not a case in which Fund orthodoxy prevailed at every point, nor was the Fund analysis accepted without qualification by Mexico's policy-markers. At the end of the period, economic disequilibria, as measured by IMF criteria, remained considerably larger than the 3-yr plan had envisaged, but ‘confidence’ had been restored and rapid growth was in prospect. The interpretation offered in the paper is that Mexico's cyclical pattern of presidential politics largely determined the effective contents of the stabilization package, and that the resilience of the Mexican system of political management goes far to explain why the economic outcome was more favourable than in the South American cases. An accident of geological endowment (the nation's huge oil resources) certainly accentuated the process of recovery from ‘bust’ to ‘boom’, but this factor did not operate in isolation, and should not be considered an adequate explanation on its own. The impact of a geological endowment upon economic conditions depends upon political mediation. However, although this paper seeks to highlight the contribution of Mexican political management to the recent short-term economic improvement, it concludes with some qualifications. The final section considers some constraints on the scope and efficacy of Mexican ‘reformism’, particularly in relation to longer-term and more structural problems.     

A competitive growth of a small midle-income country in the eurozone is far to be assured

The dichotomy of the increasing diversity of eurozone member countries and the institutional “one-size-fits-all” setting has exposed the deficiencies of the institutional economic architecture of the eurozone in the financial and economic crisis of 2008–2010. It has particularly exposed the weaknesses of middle-income countries within this framework. Greece, Ireland, and Portugal are experiencing outright financial crises. This article’s thesis is that small middle-income countries (MICs) in the eurozone face two general macroeconomic problems: (1) there is inherent macroeconomic instability; and (2) there is a problem of “competitiveness and convergence.” Small MICs’ ability to grow and catch up is demand-based and largely export-driven. Price competitiveness is an important factor of competitive growth within the eurozone. A national fiscal policy is crucial to countries’ ability to form and implement national policies for economic stability and competitive growth, which would enable a durable, above-average growth rate. Calls for a fiscal union along with the monetary union may therefore backfire.     

A South African national economic and environmental policyframework

Most contemporary economic theories upon which conventional national accounting is based regard man‐made assets as productive capital to be depreciated against the value of production. Such production, without replenishment or renewal of the asset or capital stock, is not sustainable. Natural resource assets, however, are not valued in the same way. There is no accounting mechanism to reflect the decrease in potential future pro duction as the resource diminishes or deteriorates. In 1993, the United Nations adopted its guidelines for a ‘System of Integrated Environmental and Economic Accounting’ (SEEA), which allows for the adjustment of the System of National Accounts (SNA) for natural asset stripping and degradation, providing a format for national accounting which assesses the viability and sustainability of economic growth. The concept of an SEEA for South Africa was pursued in 1994 as a pilot study. The framework to be devel oped was termed the South African National Economic Environmental Planning (SANEEP) model. The framework can be used to predict the environmental impact, in terms of natural resource use and degradation, of economic growth, both nationally and at the sectoral level. In addition, it can be used to test the sectoral economic impact, and thus the desirability of certain types of environmental economic instruments such as pol lution taxes, or the imposition of royalties on mineral extraction. Hence, the SANEEP framework has the potential to become a broad‐based, integrated environmental and economic planning tool. This article describes the SANEEP model, its information requirements and applications.