Building National Competitive Advantage: Rwanda's Lessons from Singapore

Despite its recent tragic history of genocide and continuing threats to political stability, Rwanda has made significant strides in improving its competitive position compared to its African neighbors and to other countries at an equivalent economic level. The Rwandan business and political leadership have explicitly taken Singapore as a model for rapid economic growth, with the aim of positioning Rwanda as a regional hub for transportation and advanced services. This article, based in part on fieldwork conducted in Rwanda by the lead author, ¹ analyzes Rwanda's development strategy using the World Economic Forum's Global Competitiveness framework and evaluates its potential for success in emulating Singapore's development pathway. © 2014 Wiley Periodicals, Inc.     

International trade and agricultural development in developing countries: Significance of the Uruguay Round of GATT negotiations

Liberalization of world trade in agricultural products ranks high on the agenda of the Uruguay Round. After a period of more than six years, however, the negotiations have not been concluded. Nevertheless, an outcome seems to be in sight. The agreement will most likely not result in a move to freer trade. It seems that domestic policies will become even more regulative than in the past in an attempt to cut exportable surpluses and to ease trade tensions among the main exporting nations. This paper explores possible impacts of the GATT Round on agricultural development in developing countries. Agricultural development is more than only growth in agricultural production or productivity. However, it is argued in the paper that other variables which also indicate agricultural development are often closely correlated with growth in production and productivity. Trade in agricultural products is not always an engine for agricultural development. If internal divergences are not accounted for by appropriate domestic policies, trade may be even harmful to agricultural development. Hence, empirical research based on cross-country analysis does not provide a clear answer about the role of trade for development. Past policies in industrialized countries have most likely had a negative effect on developing countries as a group; however, the effects differ widely across countries. Liberalization policies in industrialized countries would not just reverse these negative effects for developing countries. Price reduction in industrialized countries may not result in the often-cited production decline in the short term. Present X-inefficiency in agriculture will be reduced by liberalization, leading to an outward shift of the supply curve. Hence, liberalization may not lead to higher world market prices for temperate-zone products in the short and medium term. Apart from this, empirical models differ widely in the price effects they predict. The expected outcome of the Uruguay Round – increased regulation of domestic policies – is likely both more negative for developing countries than past protectionist policies and worse than an overall liberalization. World market prices will increase, uncertainty and instability can be expected to grow, and food aid may become less available. There will be a need to react to these challenges with measures on the international and national level. Initiatives to deal with food crises in developing countries and to stimulate liberalization in developing countries should be considered. Finally, developing countries should be made aware that their own domestic policies have a much greater economic impact than policies in other countries, even if the latter are as protectionist as current agricultural policies in the industrialized world.     

Do Vietnamese upland farmers benefit from high world market prices for maize?

For rural households in the north of Vietnam, maize cropping is the main source of income. In the face of the world market price increases of the recent past, we analyze the regional marketing chain of this commodity qualitatively and econometrically investigating to what extent smallholder farmers in developing countries are affected by international price movements. Vietnamese maize markets are found to be well integrated. Recent price hikes have fully transmitted along the regional supply chain so that farmers profited. Nevertheless, adverse factors such as increasing input prices have neutralized these benefits resulting in a decline in real income of smallholders.     

Trading gains: terms-of-trade and real-exchange-rate effects

This paper considers alternative measures of a country's trading gains, i.e., the extra income that it earns (or loses) as the result of changes in the relative prices relevant for international trade, and which makes up the difference between real gross domestic product (GDP) and real gross domestic income (GDI). Looking at both the Laspeyres and the Törnqvist aggregation, we show that the trading gains really consist of two components, a terms-of-trade effect and a real-exchange-rate effect. Nearly all national statistical agencies, receiving no firm guidance from international organizations in this matter, merely consider the first effect, which suggests that the so-called trading-gain estimates they publish are incomplete and misnamed. Even more seriously, it implies that the corresponding measures of real GDI they derive are conceptually flawed. A straightforward way to circumvent these difficulties is to use the gross domestic final expenditure price index as deflator when computing real GDI and the trading gains. Some numerical estimates for Australia are provided as an illustration. The paper also identifies the underlying linear and Translog real GDI functions for which the Laspeyres and Törnqvist terms-of-trade and real-exchange-rate effects are exact.     

Does aging influence structural change? Evidence from panel data

Our study represents a first attempt to single out the effects of aging on the entire structure of the economy that is approximated by employment shares in different sectors. We find that even after controlling for the effects of other relevant factors - e.g., income per capita, share of trade in GDP, government consumption share in GDP, population size - aging does have a statistically significant differentiated impact on the employment shares. In particular, we find that an increase in aging exerts a statistically significant adverse effect on the employment shares in agriculture, manufacturing, construction, and mining and quarrying industries. At the same time, an increasing share of the elderly (decreasing share of the youth) in society positively affects employment shares in community, social, and personal services as well as in the financial sector.