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52. Investment Opportuntities in Mekelle, Tigray State, Ethiopia
- Author:
- Bryant Cannon
- Publication Date:
- 12-2009
- Content Type:
- Working Paper
- Institution:
- Columbia Center on Sustainable Investment
- Abstract:
- Mekelle, a rapidly developing city in northern Ethiopia, is located about 780 km from the capital, Addis Ababa. Established nearly 150 years ago by Emperor Yohannes, the city is nestled in Ethiopia's temperate highlands, in the heart of a region that traces its origins back to the ancient Axum Empire that once controlled Red Sea trade (4th century BC – 10th century AD). The city maintains aproud history of many religions, particularly Orthodox Christianity, dating back to the 4th century AD. Mekelle was largely ignored in the latter half of the 20th century by Ethiopia's ruling feudal and socialist governments, but began to experience an economic and cultural rejuvenation with the election of a democratic government in Ethiopia in the early 1990s.
- Topic:
- Development, Economics, International Trade and Finance, and Foreign Direct Investment
- Political Geography:
- Africa and Ethiopia
53. A Copper-Bottomed Crisis? The Impact of the Global Economic Meltdown on Zambia
- Author:
- Duncan Green
- Publication Date:
- 12-2009
- Content Type:
- Working Paper
- Institution:
- Oxfam Publishing
- Abstract:
- At the time of independence in 1964 Zambia was a middle-income country and appeared set to develop into a prosperous nation. However, the combination of a tumultuous world economy and fiscal mismanagement led to rapid economic decline, which continued unabated into the 1980s and 1990s. Average economic growth from 1990–1999 was the lowest in the region, and unemployment and inflation soared resulting in per capita incomes 50% less in 1999 than they had been 25 years earlier.
- Topic:
- Economics, Globalization, International Trade and Finance, and Financial Crisis
- Political Geography:
- Africa
54. The Impact of the Doha Round on Kenya
- Author:
- Eduardo Zepeda, Mohamed Chemingui, Hedi Bchir, Christopher Onyango, and Bernadette Wanjala
- Publication Date:
- 11-2009
- Content Type:
- Working Paper
- Institution:
- Carnegie Endowment for International Peace
- Abstract:
- As the first decade of the twenty- first century comes to an end, Kenya's economy is being confronted with a number of challenges that call for carefully crafted, well- informed policies. After fifteen years of stagnation—when the country witnessed zero increase in its gross domestic product (GDP) per capita and investment at levels below 20 percent of GDP—it has risen to become one of Africa's fast growing economies (see Arbache and Page 2008). Between 2004 and 2007, Kenya's economy showed signs of revitalization, and the average annual growth rate climbed above 5 percent, allowing Kenyans to finally enjoy an increase in GDP per capita. However, the political turmoil of 2008 slowed growth, and the current global financial and economic crisis has made it difficult to return to high growth rates. Thus, Kenya now faces shrinking export markets, rising protectionist measures worldwide, and meager financial flows.
- Topic:
- Agriculture, Economics, International Trade and Finance, and Treaties and Agreements
- Political Geography:
- Kenya and Africa
55. Sustainability standards and coffee exports from Tanzania
- Author:
- Freedy T. M. Kilima, Jeremiah Makindara, and Evelyne Lazaro
- Publication Date:
- 03-2008
- Content Type:
- Working Paper
- Institution:
- Danish Institute for International Studies (DIIS)
- Abstract:
- One of the key trends characterizing agro-food trade in the last two decades has been the increas-ing complexity of public and private standards that are applied to imports into developed countries. This paper aims to identify critical areas to facilitate compliance with sustainability standards in coffee, which is the major traditional export crop for Tanzania. Coffee experienced a dramatic downward trend in world market prices that led to a decreased contribution to foreign exchange earnings in producing countries in the early 2000s. Although prices have improved over the past few years, economies that are dependent on traditional agricultural exports such as coffee need strategies to ensure stability in export earnings. One of the possible venues for increased agricultural export value is through exports to niche markets, such as coffee that is certified against one or more sustainability certifications (e.g. Fair Trade, Utz Certified, Organic, and Rainforest Alliance).
- Topic:
- Agriculture, Environment, and International Trade and Finance
- Political Geography:
- Africa and Tanzania
56. The FDI Recession Has Begun
- Author:
- Karl Sauvant
- Publication Date:
- 11-2008
- Content Type:
- Working Paper
- Institution:
- Institute for Latin American and Iberian Studies at Columbia University
- Abstract:
- With $1.8 trillion (according to UNCTAD), world foreign direct investment (FDI) flows reached an all-time high last year. All major regions benefitted from increased flows. But that was then. What is, and will be, the impact of the financial crisis and the recession on FDI flows this year and next?
- Topic:
- Economics, International Political Economy, and International Trade and Finance
- Political Geography:
- Africa, Russia, Central Asia, and Latin America
57. The Implications of China's Ascendancy for Africa
- Author:
- Hany Besada
- Publication Date:
- 10-2008
- Content Type:
- Working Paper
- Institution:
- Centre for International Governance Innovation
- Abstract:
- China's spectacular economic progress has led some security analysts and policy makers in the North and the South to question Beijing's intentions in other parts of the world. This paper examines the extent to which China's engagement with Africa has produced mutual benefits for both and whether Africa is reaping the necessary benefits required for poverty alleviation and economic development. Chinese state-owned enterprises have invested billions of dollars in foreign reserves, construction, and engineering resources assisting African oil-producing exporters. While many in the west have started to question China's extraordinary level of interest in Africa – in particular, its economic engagement with perceived repressive regimes – African leaders view China's entry as a means of pulling Africa onto the path of globalization. It is thus important that African leaders and policy makers ensure that Chinese trade and investment bring reciprocal and tangible benefits for Africans, and contribute to economic stability and good governance.
- Topic:
- Foreign Policy, International Cooperation, International Trade and Finance, Treaties and Agreements, and International Affairs
- Political Geography:
- Africa and China
58. Kumasi Marketing Strategy: Tourism
- Author:
- Dario Cacciatore, Andre Le, Nicholas Levi-Gardes, Antonio Lopez Reus, and Kenny Sai-Kin Hsu
- Publication Date:
- 09-2008
- Content Type:
- Working Paper
- Institution:
- Columbia Center on Sustainable Investment
- Abstract:
- Kumasi needs to position itself strategically as a cultural destination, communicate its attributes more effectively to tourists already in Ghana and differentiate itself from other cities and attractions Position should entail marketing a larger cultural region than just Kumasi Several positioning statements can transmit Kumasi's new marketing strategy: Kumasi - Heart of the Kingdom of Ashanti. Ashanti - The Hidden Kingdom. Kumasi - Come and See! Kumasi is well placed to capitalize on the growth of tourism in Ghana due to its status as a cultural capital The financial impact of tourism growth is potentially significant for the city and its surrounding districts The creation of the Ashanti Region Marketing Corporation is fundamental to proper coordination among stakeholders.
- Topic:
- Development, Economics, International Trade and Finance, and Markets
- Political Geography:
- Africa
59. The Political Economy of Agricultural Trade Interventions in Africa
- Author:
- Robert H. Bates
- Publication Date:
- 05-2008
- Content Type:
- Working Paper
- Institution:
- Weatherhead Center for International Affairs, Harvard University
- Abstract:
- This chapter explores the political economy of agricultural trade protection in Sub-Saharan Africa. Figure 1.1 portrays the impact of government intervention in support of agricultural and non-agricultural products by governments 1955-2005 in different regions of the globe. In devising these measures, World Bank researchers calculated for a sample of agricultural and non-agricultural commodities the degree to which government policies – tariffs, subsidies, or currency distortions -- led to a separation of domestic from world market prices. The measures represent un-weighted averages. When greater than 0, they indicate that government policies favor farming; when below, that their policies favor other sectors.
- Topic:
- Agriculture and International Trade and Finance
- Political Geography:
- Africa
60. Does Digital Divide or Provide? The Impact of Cell Phones on Grain Markets in Niger
- Author:
- Jenny C. Aker
- Publication Date:
- 10-2008
- Content Type:
- Working Paper
- Institution:
- Center for Global Development
- Abstract:
- Due partly to costly information, price dispersion across markets is common in developed and developing countries. Between 2001 and 2006, cell phone service was phased in throughout Niger, providing an alternative and cheaper search technology to grain traders and other market actors. Weconstruct a novel theoretical model of sequential search, in which traders engage in optimal search for the maximum sales price, net transport costs. The model predicts that cell phones will increase traders' reservation sales prices and the number of markets over which they search, leading to a reduction in price dispersion across markets. To test the predictions of the theoretical model, we use a unique market and trader dataset from Niger that combines data on prices, transport costs, rainfall and grain production with cell phone access and trader behavior. We first exploit the quasi-experimental nature of cell phone coverage to estimate the impact of the introduction of information technology on market performance. The results provide evidence that cell phones reduce grain price dispersion across markets by a minimum of 6.4 percent and reduce intra-annual price variation by 12 percent. Cell phones have a greater impact on price dispersion for market pairs that are farther away, and for those with lower road quality. This effect becomes larger as a higher percentage of markets have cell phone coverage. We provide empirical evidence in support of specific mechanisms that partially explain the impact of cell phones on market performance. Robustness checks suggest that the results are not driven by selection on unobservables, nor are they solely a result of general equilibrium effects. Calculations of the four-firm concentration index suggest that the grain market structure is competitive, so the observed reductions in price dispersion are not due to greater market collusion. The primary mechanism by which cell phones affect market-level outcomes appears to be a reduction in search costs, as grain traders operating in markets with cell phone coverage search over a greater number of markets and sell in more markets. The results suggest that cell phones improved consumer and trader welfare in Niger.
- Topic:
- Agriculture, International Trade and Finance, Markets, and Science and Technology
- Political Geography:
- Africa and Nigeria
61. Rules of Origin and the European Union's Preferential Trade Agreements, with Special Reference to the EU-ACP Economic Partnership Agreements
- Author:
- Peter Gibbon
- Publication Date:
- 07-2008
- Content Type:
- Working Paper
- Institution:
- Danish Institute for International Studies (DIIS)
- Abstract:
- Economic opinion is in the process of re-interpreting low levels of uptake of non-reciprocal preferential trade agreements (PTAs) partly in terms of administrative barriers to preference utilization. Primary amongst these barriers are Rules of Origin. This paper reviews the literature on Rules of Origin as administrative barriers to the utilization of preferences accorded to African, Caribbean and Pacific (ACP) countries under the Coutonou Agreement, before going on to ex-amine current revisions of EU PTA Rules of Origin. These are embodied in a new (so-called 'Cotonou+') set of rules for the interim EU-ACP Economic Partnership Agreements (EPAs) and a second proposed set of rules for the EU's Generalised System of Preference (GSP) arrangements, including Everything But Arms. The Cotonou+ rules include some important concessions by the EU, especially for those ACP countries that do not have Least Developed Country (LDC) status, but are supposed to be re-negotiated within a fixed period in line the new EU GSP rules. However, the new GSP rules as revealed in the EU Draft Regulation of 2007 contain no real concessions for non-LDCs, and they introduce potentially trade-restrictive administrative requirements. These rules are currently (July 2008) under reconsideration by the EU, but it is clear that this exercise does not cover these elements. For this reason, harmonisation of the Cotonou+ and new GSP rules may be a source a serious discord in the negotiation of full EPAs, a process which is supposed to occur during 2008.
- Topic:
- International Trade and Finance
- Political Geography:
- Africa and Caribbean
62. Export Productivity and Specialization in China, Brazil, India and South Africa
- Author:
- Amelia U. Santos-Paulino
- Publication Date:
- 03-2008
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- This paper analyses the patterns of export productivity and trade specialization profiles in the China, Brazil, India and South Africa, and in other regional groupings. In doing so, the investigation calculates a time varying export productivity measure using highly disaggregated product categories. The findings indicate that export productivity is mainly determined by real income and human capital endowments. Importantly, the study reveals significant differences in the export productivity and specialization patterns of countries with comparable per capita income levels. For instance, China's export productivity and implied export sophistication is in line with that of countries with higher per capita incomes, including some OECD industrial economies.
- Topic:
- Economics and International Trade and Finance
- Political Geography:
- Africa, China, India, Asia, South Africa, Brazil, and South America
63. Foreign Direct Investment from China, India and South Africa in Sub-Saharan Africa: A New or Old Phenomenon?
- Author:
- John Henley, Stefan Kratzsch, Tamer Tandogan, and Mithat Külür
- Publication Date:
- 03-2008
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- The burgeoning literature on outward foreign direct investment from emerging markets has largely focused on analysing the motives of investors as reported by parent companies. This paper, instead, focuses on firm-level investments originating from China, India or South Africa in fifteen host countries in sub-Saharan Africa (SSA). The analysis is based on a sub-set of firms drawn from the overall sample of 1,216 foreign-owned firms participating in the UNIDO Africa Foreign Investor Survey, carried out in 2005. The sample of investments originating from China, India and South Africa is analysed in terms of firm characteristics, past and forecast performance in SSA over three years and management's perception of ongoing business conditions. Comparisons are made with foreign investors from the North. The paper concludes that while investors in SSA from the three countries are primarily using their investment to target specific markets, they are largely operating in different sub-sectors. While there appear to be specific features that firms from a given country of origin share, there are no obvious operating-level features they all share apart from market seeking.
- Topic:
- International Trade and Finance
- Political Geography:
- Africa, China, India, Asia, and South Africa
64. The Optimal Distance to Port for Exporting Firms
- Author:
- Thomas Gries, Wim Naudé, and Marianne Matthee
- Publication Date:
- 04-2008
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- Success in international trade depends, amongst other things, on distance from markets. Most new economic geography models focus on the distance between countries. In contrast much less theorizing and empirical analysis have focused on how distances within a country—for instance due to the location behaviour of exporting firms—matter to international trade. In this paper we contribute to the literature on the latter by offering a theoretical model to explain the optimal distance that an export-oriented firm would locate from a port. We present empirical evidence from South Africa in support of the model.
- Topic:
- International Trade and Finance
- Political Geography:
- Africa and South Africa
65. The Rise of the Southern Economies: Implications for the WTO-Multilateral Trading System
- Author:
- Silvia Nenci
- Publication Date:
- 02-2008
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- The rise of the emerging southern economies – China, India, Brazil, and South Africa (CIBS) – as both economic and political actors, is having significant and far-reaching impact on the world economy. Notwithstanding the increasing amount of study and research, there are still important knowledge-gaps with respect to a range of likely consequences of the dynamism of the Southern Economies. One of these gaps concerns the implications for the WTO-multilateral trading system. The present paper proposes a review of the southern participation in the multilateral integration process and suggests a methodology to assess the impact of CIBS' rise on the future of the WTO system. Through the analysis of the trajectories of 'impact' of the trade channel, the paper draws some suggestive remarks.
- Topic:
- International Organization and International Trade and Finance
- Political Geography:
- Africa, China, India, Asia, South Africa, Brazil, and South America
66. Growth and Responsibility: A Review of Business Action for Africa between the UK and German G8 Presidencies 2005-7
- Author:
- Richard Reeve
- Publication Date:
- 06-2007
- Content Type:
- Working Paper
- Institution:
- Chatham House
- Abstract:
- In March 2005 the report of the Commission for Africa called for a sea change in the way the business community engaged in the development process in Africa. The G8 Gleneagles summit that July made a series of commitments on boosting African development, while in London a new international network was launched to bring G8 and African business leaders together to build on the momentum of the Commission and the UK's dual G8 and EU presidencies. Business Action for Africa (BAA) declared its aims as: to present a clear African and international business voice to promote growth and poverty reduction; to promote more positive, balanced perceptions of Africa; and to develop and showcase good business practice.
- Topic:
- International Trade and Finance
- Political Geography:
- Africa, Russia, United States, Japan, United Kingdom, Europe, Asia, and Germany
67. Why Doesn't Africa Get More Equity Investment? Frontier Stock Markets, Firm Size and Asset Allocations of Global Emerging Market Funds
- Author:
- Vijaya Ramachandran, Scott Standley, and Todd Moss
- Publication Date:
- 02-2007
- Content Type:
- Working Paper
- Institution:
- Center for Global Development
- Abstract:
- This paper addresses the question of investment in sub-Saharan African listed securities by examining characteristics of the continent's 15 equity markets, the rise and fall of African regional funds, and the asset allocation trends for global emerging market (GEM) funds. The data shows that South Africa is now a leading destination of capital, but that few managers invest elsewhere on the continent. However, we find that African markets are not treated differently than other markets and present evidence that small market size and low levels of liquidity are a binding deterrent for foreign institutional investors. Thus, orthodox market variables rather than market failure appear to explain Africa's low absolute levels of inward equity flows. The paper then turns to new data from firm surveys to explore why African firms remain small. The implications of our findings are threefold: (a) efforts to encourage greater private investment in these markets should concentrate on domestic audiences and specialized regional funds, (b) the depth and success of the Johannesburg Stock Exchange can perhaps be better utilized to benefit other parts of the continent, and (c) any long-term strategy should concentrate on the underlying barriers to firm entry and growth.
- Topic:
- Government, International Trade and Finance, and Markets
- Political Geography:
- Africa and South Africa
68. Multilateral Trade negotiations: How Sensibly Must African Countries and Trade Negotiators Stand? - Some Lessons from WTO Experience
- Author:
- Tadeous T. Chifamba
- Publication Date:
- 01-2007
- Content Type:
- Working Paper
- Institution:
- The African Capacity Building Foundation (ACBF)
- Abstract:
- It is generally acknowledged that Africa’s participation in Multilateral Trade Negotiations (MTNs) improved both quantitatively and qualitatively since the launch of the Uruguay Round (UR). This is not to say that African negotiators have reached the same levels of preparedness and sophistication as their counterparts in the developed countries. A number of challenges still remain and some of them relate to capacity constraints in understanding the negotiations subjects / agenda due to lack of relevant training, lack of adequate economic and trade data and poor knowledge of the negotiations structure, all of which impact negatively on overall negotiation strategy. It is important to note that prior to the Uruguay Round, MTNs were seen as a preserve of the developed countries, whilst developing countries were marginal to the negotiations process and were largely recipients of preferential market access and other special differential treatment. No wonder GATT was regarded as a “rich men’s club”.
- Topic:
- International Trade and Finance, Multilateralism, Negotiation, and WTO
- Political Geography:
- Africa
69. Real Income Stagnation of Countries, 1960-2001
- Author:
- Sanjay Reddy and Camelia Minoiu
- Publication Date:
- 04-2006
- Content Type:
- Working Paper
- Institution:
- Institute for Social and Economic Research and Policy at Columbia University
- Abstract:
- This paper examines the phenomenon of real-income stagnation (in which real-income growth is uninterruptedly negligible or negative for a sizable sequence of years). The authors analyze data for four decades from a large cross-section of countries. Real income stagnation is a conceptually distinct phenomenon from low average growth and other features of the growth sequence that have been previously considered. The authors find that real income stagnation has affected a significant number of countries (103 out of 168), and resulted in substantial income loss. Countries that suffered spells of real income stagnation were more likely to be poor, in Latin America or sub-Saharan Africa, conflict ridden and dependent on primary commodity exports. Stagnation is also very likely to persist over time. Countries that were afflicted with stagnation in the 1960s had a likelihood of seventy-five percent of also being afflicted with stagnation in the 1990s.
- Topic:
- Economics, International Political Economy, and International Trade and Finance
- Political Geography:
- Africa and Latin America
70. Understanding South Africa's Economic Puzzles
- Author:
- Dani Rodrik
- Publication Date:
- 09-2006
- Content Type:
- Working Paper
- Institution:
- The John F. Kennedy School of Government at Harvard University
- Abstract:
- South Africa has undergone a remarkable transformation since its democratic transition in 1994, but economic growth and employment generation have been disappointing. Most worryingly, unemployment is currently among the highest in the world. While the proximate cause of high unemployment is that prevailing wages levels are too high, the deeper cause lies elsewhere, and is intimately connected to the inability of the South African to generate much growth momentum in the past decade. High unemployment and low growth are both ultimately the result of the shrinkage of the non-mineral tradable sector since the early 1990s. The weakness in particular of export-oriented manufacturing has deprived South Africa from growth opportunities as well as from job creation at the relatively low end of the skill distribution. Econometric analysis identifies the decline in the relative profitability of manufacturing in the 1990s as the most important contributor to the lack of vitality in that sector.
- Topic:
- International Relations, Development, and International Trade and Finance
- Political Geography:
- Africa and South Africa
71. South Africa's Export Predicament
- Author:
- Bailey Klinger and Ricardo Hausmann
- Publication Date:
- 09-2006
- Content Type:
- Working Paper
- Institution:
- The John F. Kennedy School of Government at Harvard University
- Abstract:
- This paper explores export performance in South Africa over the past 50 years, and concludes that a lagging process of structural transformation is part of the explanation for stagnant exports per capita. Slow structural transformation in South Africa is found to be a consequence of the peripheral nature of South Africa's productive capabilities. We apply new tools to evaluate South Africa's future prospects for structural transformation, as well as to explore the sector al priorities of the DTI's draft industrial strategy. We then discuss policy conclusions, advocating an 'open-architecture' industrial policy where the methods applied herein are but one tool to screen private sector requests for sector-specific coordination and public goods.
- Topic:
- International Relations, Development, and International Trade and Finance
- Political Geography:
- Africa and South Africa
72. Analysis of the Potential Impact of the Current WTO Agricultural Negotiations on Government Strategies in the SADC Region
- Author:
- A.J.E. Charman and J. Hodge
- Publication Date:
- 09-2006
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- This study aims to help identify how the Agreement on Agriculture (AoA) could potentially constrain government action to achieve food security in the Southern African Development Community (SADC). The paper considers the proposed tariff and subsidy reduction modalities of the current round of WTO negotiations. The main focus is on the potential direct effects of the AoA, in terms of proposed reductions to domestic subsidies and tariffs, on food security policy in SADC countries. The study examines the argument that subsidy reductions and further liberalizing market access may pose constraints on the food security policy options of governments within the region.
- Topic:
- International Trade and Finance, Markets, and Treaties and Agreements
- Political Geography:
- Africa
73. Tax Policy Reforms in Nigeria
- Author:
- Ayodele Odusola
- Publication Date:
- 01-2006
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- Nigeria is governed by a federal system, hence its fiscal operations also adhere to the same principle, a fact which has serious implications on how the tax system is managed. The country's tax system is lopsided, and dominated by oil revenue. It is also characterized by unnecessarily complex, distortionary and largely inequitable taxation laws that have limited application in the informal sector that dominates the economy. The primary objective of this paper is to prepare a case study on tax policy reforms in Nigeria, with the specific objectives of examining the main tax reforms in the country; highlighting tax revenue profile and composition; analysing possible distributional impacts on the poor; discussing major problems that could prevent effective tax implementation in the country; and offering suggestions for reforms.
- Topic:
- Development, Economics, and International Trade and Finance
- Political Geography:
- Africa and Nigeria
74. After Doha: II. Is globalisation history?
- Author:
- Mark P Thirlwell
- Publication Date:
- 12-2006
- Content Type:
- Working Paper
- Institution:
- Lowy Institute for International Policy
- Abstract:
- For some observers, the announcement in late July of the indefinite suspension of the Doha Round of multilateral trade negotiations signalled the beginning of the end for globalisation. The fear was that history would repeat itself; just as an earlier era of globalisation came to a bad end, so too could the current episode.
- Topic:
- Development, Globalization, and International Trade and Finance
- Political Geography:
- Africa
75. After Doha: I. The search for Plan B
- Author:
- Mark P Thirlwell
- Publication Date:
- 09-2006
- Content Type:
- Working Paper
- Institution:
- Lowy Institute for International Policy
- Abstract:
- On 24 July, the Doha Round of multilateral trade negotiations was suspended indefinitely, due to irreconcilable differences over the liberalisation of agricultural trade. While the suspension of negotiations may or may not turn out to mark the death of the Doha Round, it will almost certainly mark a watershed for the future of the international trading system. With even a 'good' outcome for the faltering trade round likely to deliver little in terms of new market access when set against the scale of negotiating resources devoted to Doha, the appetite of the world's trade ministers for any repeat performance will be limited. As a result, the era of giant, set piece trade rounds like Doha and its predecessor the Uruguay Round may well be over.
- Topic:
- Development, International Trade and Finance, and Treaties and Agreements
- Political Geography:
- Africa
76. An Overview of the Certified Organic Export Sector in Uganda
- Author:
- Peter Gibbon
- Publication Date:
- 03-2006
- Content Type:
- Working Paper
- Institution:
- Danish Institute for International Studies (DIIS)
- Abstract:
- This paper reports the results of a survey of almost all certified and in-conversion organic export operations in Uganda in late 2005. It covers products exported, company size and ownership, standards exported to, certification costs, total export values, value-added in Uganda, marketing channels, crop procurement systems, management of organic operations and the main challenges experienced by exporters. Findings include that numbers of certified exporters are growing rapidly. Export values are also growing, but more slowly: They reached USD 6.2 million in 2005. A handful of firms exporting coffee and cotton dominate the sector and this situation is likely to remain. Though the sector is maturing, most recent entrants are small, relatively weak and currently depend on donor support.
- Topic:
- Agriculture, Development, and International Trade and Finance
- Political Geography:
- Uganda and Africa
77. Diamonds, Foreign Aid, and the Uncertain Prospects for Post-Conflict Reconstruction in Sierra Leone
- Author:
- J. Andrew Grant
- Publication Date:
- 08-2005
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- This article examines the external and internal dimensions of post-conflict reconstruction in Sierra Leone. The United Nations, bilateral donors such as the United Kingdom, and transnational non-governmental organizations and aid agencies have been instrumental in providing much-needed external assistance to Sierra Leone during the latter stages of its civil war and in the immediate post-war period. Although foreign aid is a welcome source of external support for reconstruction efforts, it is finite like any other resource. Reconstruction must also address intangible issues such as corruption as well as the healing of society through the Truth and Reconciliation Commission and the Special Court for Sierra Leone. Diamond exports hold potential as an internal source to spur economic growth and reconstruction. However, as the article illustrates, many obstacles remain, ranging from governance weaknesses in terms of capacity and domestic regulatory schemes on diamonds to the existence of illicit mining and smuggling of diamonds to regional instability.
- Topic:
- Foreign Policy, Debt, and International Trade and Finance
- Political Geography:
- Africa and United Kingdom
78. The Characteristics of Macroeconomic Shocks in the CFA Franc Zone
- Author:
- David Fielding, Kevin Lee, and Kalvinder Shields
- Publication Date:
- 03-2004
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- In this paper we fit a VECM in output and prices to data from ten countries of the CFA Franc Zone. This model allows for various cross-country interactions in both the short run and the long run. The VECM parameters are used to estimate persistence profiles of different kinds, in order to identify the degree of homogeneity in the way in which the countries respond to macroeconomic shocks. In this way we can shed light on questions about the likely size of the costs incurred from these countries' membership of a monetary union.
- Topic:
- Economics, International Organization, International Political Economy, and International Trade and Finance
- Political Geography:
- Africa
79. Monetary Policy in the Franc Zone: Estimating Interest Rate Rules for the BCEAO
- Author:
- Anja Shortland and David Stasavage
- Publication Date:
- 02-2004
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- This paper examines to what extent the central bank for the West African Economic and Monetary Union (BCEAO) has used interest rate policy in response to domestic economic developments. We show that while in the long run the BCEAO matches changes in French (Eurozone) interest rates one for one, in the short run it retains freedom to react to domestic economic variables, such as inflation, the output gap, its foreign exchange position and government borrowing.
- Topic:
- Economics, International Organization, International Political Economy, and International Trade and Finance
- Political Geography:
- Africa, France, and West Africa
80. Poverty and Growth in the WAEMU after the 1994 Devaluation
- Author:
- Jean-Paul Azam
- Publication Date:
- 02-2004
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- This paper brings out that poverty increased massively in the wake of the 1994 devaluation of the CFA franc, despite a significant recovery of economic growth. Although this increase affected all the social groups, it fell mostly on the urban poor. An analytical model is presented, which explains this puzzle by the stratification of the labour market, assuming that the formal sector workers are at the same time the investors in the informal sector. Then, capital intensity in the latter increases as the former anticipate the cut in formal sector wages that the long-awaited devaluation brings about. Ex post, they run down their assets for consumption-smoothing purposes, thus de-capitalizing the informal sector firms, with a negative impact on incomes in the (urban) informal sector.
- Topic:
- Economics, International Organization, International Political Economy, and International Trade and Finance
- Political Geography:
- Africa
81. The Impact of Monetary Union on Macroeconomic Integration: Evidence from West Africa
- Author:
- David Fielding and Kalvinder Shields
- Publication Date:
- 02-2004
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- In this paper we use data from 17 African nations in order to investigate the hypothesis that monetary union – represented in this case by the CFA Franc Zone – augments the extent of macroeconomic integration. The paper covers a number of dimensions of integration including the volume of bilateral trade, real exchange rate volatility and the magnitude of cross-country business cycle correlation.
- Topic:
- Economics, International Organization, International Political Economy, and International Trade and Finance
- Political Geography:
- Africa
82. Monetary Policy in the CFA Zone: Country-level Credit Policy
- Author:
- Anja Shortland and David Stasavage
- Publication Date:
- 02-2004
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- This paper examines whether the BCEAO has made use of the various policy instruments at its disposal for steering credit in the individual CFA zone member countries to complement interest rate policy at the zone level. We estimate whether private sector credit has responded systematically to different monetary policy variables using iterated 3-stage least squares regressions for Burkina Faso, Côte d'Ivoire, Mali, Senegal and Togo. If we constrain the coefficient estimates there is some support for the hypothesis that the BCEAO has contracted private sector credit in response to a higher inflation differential with France. However, there seems to be no policy rule to restrict private sector credit in response to increasing government borrowing from the central bank or increased foreign borrowing. If the coefficient estimates are unconstrained, there does not appear to be any systematic policy to control credit expansion at the domestic level.
- Topic:
- Economics, International Organization, International Political Economy, and International Trade and Finance
- Political Geography:
- Africa and France
83. The Costs and Benefits Analysis of CFA Membership: The Choice of an Exchange Rate Regime for the CFA Countries Zone
- Author:
- Mireille Linjouom
- Publication Date:
- 02-2004
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- The paper determines an analytical framework defining the choice of an optimal exchange rate regime for a typical CFA country. The policymakers behave strategically to decide to adopt alternative exchange rate regime by minimizing their loss function under specific constraints like economic characteristics and political consideration. One concludes a CFA economy with less inflationary propensity and greater external shocks volatility will tend to select a flexible exchange rate regime. Moreover, the model suggests that a CFA country with a more unstable political system and a higher propensity to apply inflationary policies will prefer a flexible arrangement than a fixed one.
- Topic:
- Economics, International Organization, International Political Economy, and International Trade and Finance
- Political Geography:
- Africa
84. An Aggregate View of Macroeconomic Shocks in Sub-Saharan Africa: A Comparative Study Using Innovation Accounting
- Author:
- Simeon Coleman
- Publication Date:
- 02-2004
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- This paper investigates the impacts and responses of macroeconomic shocks in some domestic economies in Sub-Saharan Africa over the period 1961-99; more specifically, it seeks to answer the question of whether there are any systematic differences in the responses of the CFA franc zones and the non-CFA franc zone countries to macroeconomic shocks. Based on the Blanchard-Quah methodology, we identify shocks to the changes in real exchange rate and output using a structural VAR (SVAR) model for these small open economies. Our finding that the real exchange rate innovations in the CFA franc zones are largely independent of domestic variables suggests that external influence is more important in the CFA zones. There is also some evidence that money demand shocks are more significant in the non-CFA franc zone countries.
- Topic:
- Economics, International Political Economy, and International Trade and Finance
- Political Geography:
- Africa
85. Economic Growth, Income Distribution and Poverty: Time-series and Cross-country Evidence from the CFA-zone Countries of sub-Saharan Africa
- Author:
- Michael Bleaney and Akira Nishiyama
- Publication Date:
- 01-2004
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- The causes of the slow growth of CFA countries are investigated. There is little difference in this respect between the CFA and other sub-Saharan African countries. Since 1970, GDP growth in the CFA countries has shown no significant trend but one or two medium-term fluctuations (positive in 1979-83 and negative in 1989-93). Internationally, the income share of the poorest 20 per cent of the population of any country has improved most in poor countries, and there is no evidence that this does not apply to CFA countries also.
- Topic:
- Economics, Human Welfare, International Political Economy, and International Trade and Finance
- Political Geography:
- Africa
86. How Does Monetary Policy Affect the Poor? Evidence from the West African Economic and Monetary Union
- Author:
- David Fielding
- Publication Date:
- 01-2004
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- The West African Economic and Monetary Union (UEMOA) has a history of monetary stability and low inflation. Nevertheless, there is substantial variation in relative prices within some UEMOA countries, in particular in the price of food relative to other elements of the retail price index (IHPC). Using monthly time-series data for cities within the region, we analyze the impact of changes in monetary policy instruments on the relative prices of components of the IHPC. We are then able to explore how the burden of monetary policy innovations is likely to be shared between the rich and poor.
- Topic:
- Economics, Human Welfare, International Political Economy, and International Trade and Finance
- Political Geography:
- Africa
87. Access to ARV Treatment - Aid, Trade and Governance in Uganda
- Author:
- Lisa Ann Richey and Stine Jessen Haakonsson
- Publication Date:
- 10-2004
- Content Type:
- Working Paper
- Institution:
- Danish Institute for International Studies (DIIS)
- Abstract:
- Access to antiretroviral medicines (ARVs) for AIDS treatment creates a field binding local and global governance. Local modalities of AIDS treatment are governed by the context of global trade through the implementation of patents on medicines in the World Trade Organisation (WTO), and within the context of global aid through development assistance. While industrialized countries, on the one hand, set aside donations to fight AIDS in developing countries, on the other hand, the same countries use the WTO to prevent developing countries from accessing cheap medicines. Uganda's success in reducing HIV prevalence is unique among African states, and it is considered the most promising candidate for effectively "scaling up" ARV treatment on the basis of its history of dealing with the pandemic. Yet, despite the many interventions addressing HIV/AIDS and dramatic price reductions of ARVs, only a minority of the infected population is currently receiving treatment, and promises of universal coverage for all who need it seem unrealistic. Our paper examines how the disconnect between international and national priorities on the one hand, and between aid and trade on the other, are currently affecting access to ARVs in Uganda. In spite of the political discourse of equality in treatment, the realities of funding suggest the difficult choices will be made from the level of policy to that of individual. Thus, global governance of trade and of aid will both shape and rely on individuals in charge of "implementation" which must be examined outside the sanitizing context of development discourse. We introduce our use of governance in this paper, and then discuss the global governance of aid to AIDS and global governance of trade and AIDS. The second half of the paper examines the Ugandan case study beginning with a political background and examination of aids policy, followed by the history of ARV provision and advocacy for ARVs, a discussion of the national health system and then aid initiatives and trade of ARVs in Uganda. Finally, we draw preliminary conclusions from our case on the conflicts between global and local governance of trade and aid to AIDS.
- Topic:
- Development, Human Welfare, and International Trade and Finance
- Political Geography:
- Uganda and Africa
88. Regional or National Poverty Lines? The Case of Uganda in the 1990s
- Author:
- Simon Appleton
- Publication Date:
- 12-2003
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- Absolute poverty lines are often derived from the cost of obtaining sufficient calories. Where staples vary across regions, such poverty lines may differ depending on whether they are set using national or regional food baskets. Regional poverty lines are open to the objection that they may be contaminated by income effects. This paper explores this issue by focussing on Uganda, a country where widening spatial inequalities in the 1990s have caused concern. Conflicting results from earlier studies have suggested that the spatial pattern of poverty in Uganda is very sensitive to whether national or regional food baskets are used in setting poverty lines. We confirm this suggestion by comparing the spatial profile of poverty in 1993 using national and regional poverty lines. However, since the regions consuming the more expensive staple sources of calories are also those with higher incomes, using simple regional poverty lines is problematic. Instead, a method of setting regional poverty lines is considered that adjusts for income differentials between regions. Even with this adjustment, the use of regional food baskets implies a markedly different.
- Topic:
- Development, International Trade and Finance, and Poverty
- Political Geography:
- Uganda and Africa
89. Which Types of Aid Have the Most Impact?
- Author:
- George Mavrotas
- Publication Date:
- 12-2003
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- The paper uses an aid disaggregation approach to examine the impact of different types of aid on the fiscal sector of the aid-recipient country. It uses time-series data on different types of aid (project aid, programme aid, technical assistance and food aid) for Uganda, an important aid recipient in recent years, to estimate a model of fiscal response in the presence of aid which combines aid disaggregation and endogenous aid. The empirical findings clearly suggest the importance of the above approach for delving deeper into aid effectiveness issues since different aid categories have different effects on key fiscal variables—an impact that could not be revealed if a single figure for aid was employed. More precisely, project aid and food aid appear to cause a reduction in public investment whereas programme aid and technical assistance are positively related to public investment. The same applies for government consumption. A negligible impact on government tax and non-tax revenues, and a strong displacement of government borrowing are also found.
- Topic:
- Economics, International Trade and Finance, and Poverty
- Political Geography:
- Uganda and Africa
90. Developed Country Trade Barriers and the Least Developed Countries: The Economic Results of Freeing Trade
- Author:
- Jon D. Haveman and Howard J. Shatz
- Publication Date:
- 06-2003
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- The Doha Ministerial Declaration emphasized that priority should be given to improving market access for products originating in the Least Developed Countries (LDCs). In this paper, we analyze the importance of this proposition with respect to market access in the Triad economies. We first present a brief history of non-reciprocal preferences granted by the Triad. This covers Generalized System of Preference (GSP) programmes in each, and further preferences granted to African, Caribbean and Pacific countries by the EU and preferences granted to Caribbean Basin, Andean, and African countries by the US. This history is followed by an assessment of trade generated by these preferences in the year 2000, and of the extent to which LDC exports might be expected to increase should the preferences be made comprehensive. Preferences in 2000 are shown to have led to an increase of US$3.5 billion in LDC exports, while a complete duty-free treatment could expand LDC exports by as much as US$7.6 billion, 90 per cent of which will be absorbed by the US. As this represents a doubling of LDC exports to these countries, we interpret these results as an endorsement of this priority in the Doha Round of negotiations.
- Topic:
- Development, Economics, and International Trade and Finance
- Political Geography:
- Africa, United States, and Caribbean
91. Aid, Debt Burden and Government Fiscal Behaviour: A New Model Applied to Côte d'Ivoire
- Author:
- Mark McGillivray and Bazoumana Ouattara
- Publication Date:
- 04-2003
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- This paper examines the impact of foreign aid on public sector fiscal behaviour in Côte d'Ivoire. A special interest is the relationship between aid, debt servicing and debt, given that Côte d'Ivoire is a highly indebted country. The theoretical model employed differs from those of previous studies by highlighting the interaction between debt servicing and the other fiscal variables. This model is estimated using 1975–99 time series data. Key findings are that the bulk of aid is allocated to debt servicing and that aid is associated with increases in the level of public debt.
- Topic:
- Debt, Development, Economics, and International Trade and Finance
- Political Geography:
- Africa
92. Trade Liberalization, Agriculture, and Poverty in Low-income Countries
- Author:
- Kym Anderson
- Publication Date:
- 03-2003
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- This paper offers an economic assessment of the opportunities and challenges provided by the WTO's Doha Development Agenda, particularly through agricultural trade liberalization, for low-income countries seeking to trade their way out of poverty. After discussing links between poverty, economic growth and trade, it reports modelling results showing that farm product markets remain the most costly of all goods market distortions in world trade. It focuses on what such reform might mean for countries of South Asia and sub-Saharan Africa in particular, both without and with their involvement in the MTN reform process. What becomes clear is that if those countries want to maximize their benefits from the Doha round, they need also to free up their own domestic product and factor markets so their farmers are better able to take advantage of new market-opening opportunities abroad. Other concerns of low-income countries about farm trade reform also are addressed: whether there would be losses associated with tariff preference erosion, whether food-importing countries would suffer from higher food prices in international markets, whether China's WTO accession will provide an example of trade reform aggravating poverty via cuts to prices received by Chinese farmers, and the impact on food security and poverty alleviation. The paper concludes with lessons of relevance for low-income countries for their own domestic and trade policies.
- Topic:
- Agriculture, Economics, Emerging Markets, International Trade and Finance, and Poverty
- Political Geography:
- Africa and China
93. Financial Sector Reforms and Savings Mobilization in Zambia
- Author:
- George Mavrotas and Samuel Manzele Maimbo
- Publication Date:
- 02-2003
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- The paper explores the relationship between financial sector reforms and savings mobilization in Zambia. Although there exists an extensive literature on financial sector development and savings levels in developing countries, there does not seem to exist satisfactory work on the above nexus for sub-Saharan African countries, particularly Zambia. Along these lines, the paper examines the linkages between the financial reforms of the early 1990s and savings mobilization. It considers the characteristics of banks and non-bank financial institutions, especially micro finance institutions, and savings levels and identifies problems associated with the relatively poor performance of savings in recent years and concludes with a set of policy guidelines for strengthening savings mobilization, highlighting the expected effect on povertyreducing growth.
- Topic:
- Development, Economics, Emerging Markets, and International Trade and Finance
- Political Geography:
- Africa and Nordic Nations
94. Policy Reform in the Mexican Telecommunications Sector
- Author:
- Miguel Ángel Valverde
- Publication Date:
- 02-2003
- Content Type:
- Working Paper
- Institution:
- Centro de Investigación y Docencia Económicas
- Abstract:
- In June 1990, Presidents George Bush and Mexican President Carlos Salinas de Gortari announced their intention to begin negotiating a free trade agreement. Canada joined the negotiations the following August. The proposed North American Free Trade Agreement (NAFTA) provoked an intense lobbying campaign in the U.S. Congress, in what became a major political battle for its congressional approval.
- Topic:
- Economics, Government, and International Trade and Finance
- Political Geography:
- Africa, Canada, Central America, and Mexico
95. Take the State Back Out? Comparing French Responses to Globalization in Agriculture and Shipping
- Author:
- Mark Aspinwall and Imtiaz Hussain
- Publication Date:
- 02-2003
- Content Type:
- Working Paper
- Institution:
- Centro de Investigación y Docencia Económicas
- Abstract:
- How autonomous is a state in today's highly interdependent international economy to pursue policies that diverge widely from the international norm? Does the degree of autonomy vary for different domestic sectors? We adapt and apply Benjamin Cohen's unholy trinity model (1993), to a comparative assessment of how France responded to globalization over agriculture and shipping, focusing on three dimensions—investment, transaction costs, and government policy responses. Although France is reputed to possess a strong state machinery (Katzenstein, 1987; Wilson, 1987; Skocpol, 1985), our analysis raises qualifications. On the one hand, regardless of government policy intentions, we find irreversible forms of disinvestment in both sectors, though different in nature—geographic for shipping, and functional for agriculture; on the other, we also find continued dependence upon the state—for aid in shipping and resisting free trade in agriculture. We further find that, although internal and endogenous, as well as external and exogenous, factors influence policy-making, the nature of these factors are different for the two sectors. We conclude by drawing implications of our findings for state-society relations and European integration.
- Topic:
- Agriculture, Economics, and International Trade and Finance
- Political Geography:
- Africa, Europe, and France
96. The Institutional Setting of the NAFTA Debate in the United States
- Author:
- Miguel Ángel Valverde
- Publication Date:
- 02-2003
- Content Type:
- Working Paper
- Institution:
- Centro de Investigación y Docencia Económicas
- Abstract:
- The objective of this paper is to analyze the institutional setting of the NAFTA debate in the United States, focusing on the interaction between the Presidency and Congress, in the formulation of foreign commercial policy. A series of arrangements have tamed confrontation between the Executive and Legislative powers, reconciling their institutional biases. THese arrangements channel and contain domestic demands for protectionism, favoring international trade liberalization negotiations.
- Topic:
- Economics, International Trade and Finance, and Treaties and Agreements
- Political Geography:
- Africa, United States, Asia, and North America
97. Foreign Policy Strategies in a Globalized World: The Case of Mexico
- Author:
- Guadalupe González
- Publication Date:
- 02-2003
- Content Type:
- Working Paper
- Institution:
- Centro de Investigación y Docencia Económicas
- Abstract:
- This document analyses the impact of the end of the Cold-War, and the processes of economic and political liberalization on Mexico's foreign policy. The first section identifies the consequences for the so-called intermediate countries of the three most important post-Cold War trends: the emergence of hybrid structure of global power, the wave of globalization, and the growing importance of international institutions. The second section evaluates the explanatory value of three systemic approaches to the study of the foreign policy of intermediate states: systemic-structuralism, middle powers, and pivotal states. In the third section, I evaluate Kahler's alternative approach centered on the interaction between systemic and domestic variables, in particular on the foreign policy consequences of economic liberalization and democratization such as the adoption of external cooperative strategies and the deepening to engagement with international institution. The fourth section describes the main changes that have taken place in Mexico's foreign policy during the 1990s: pragmatism, primacy of economics, closer alignment with the United States, segmented multilateralism, fragmentation of the decision-making process, and new instruments. There are two arguments in this document. First, in contrast to other intermediate liberalizing countries, Mexico's efforts to adapt to the new post-Cold War international system, followed an uneven and partial pattern. While Mexican political leaders pursued the full integration of the country to the international economy, in the security realm they maintain a less than open policy based on the defense of the traditional notion of sovereignty. Mexico's partial adaptation is explained by the different pace of the raid economic reform on the one hand, and the gradual and slow opening of the post-revolutionary political regime, on the other. Second, as Kahler's model predicted, Mexico adopted strategies of cooperation and institutional engagement in order to solve credibility roblems. The need to enhance the credibility of the programs of economic reform pushed the Mexican government to engage actively with economic international institutions.
- Topic:
- International Relations, Economics, and International Trade and Finance
- Political Geography:
- Africa, United States, Middle East, North America, and Mexico
98. Back to the Nest? Europe's Relations with the African, Caribbean and Pacific Group of Countries
- Author:
- John Ravenhill
- Publication Date:
- 12-2002
- Content Type:
- Working Paper
- Institution:
- Institute of European Studies (IES), UC Berkeley
- Abstract:
- Europe's association with African, Caribbean and Pacific (ACP) countries was the first of its interregional relationships. In the nearly half century since the signature of the Treaty of Rome, it developed into Europe's most institutionalized and multidimensional interregional relationship. It embraces not only trade and investment issues but also a development "partnership" that includes what has traditionally been the EU's largest single aid program, a joint parliamentary assembly, meetings of organizations representing civil society, and a dialogue on human rights. This chapter examines the factors that have shaped this relationship over the last four decades. The principal focus is on the trade regime, not just for consistency with the other contributions to this volume but also because it is in its trade dimension that the relationship has changed most dramatically over time.
- Topic:
- International Political Economy and International Trade and Finance
- Political Geography:
- Africa, Europe, Caribbean, and Rome
99. Lessons of the Euro for the Rest of the World
- Author:
- Barry Eichengreen
- Publication Date:
- 12-2002
- Content Type:
- Working Paper
- Institution:
- Institute of European Studies (IES), UC Berkeley
- Abstract:
- Europe's single currency is widely invoked as a potential solution to the monetary and exchange rate problems of other regions, including Asia, Latin America, North America and even Africa. This lecture asks whether the Europe's experience in creating the euro is exportable. It argues that the single currency is the result of a larger integrationist project that has political as well as economic dimensions. The appetite for political integration being less in other parts of the world, the euro will not be easily emulated. Other regions will have to find different means of addressing the tension between domestic monetary autonomy and regional integration. Harmonized inflation targeting may be the best available solution.
- Topic:
- Economics, International Trade and Finance, and Political Economy
- Political Geography:
- Africa, Europe, Asia, and Latin America
100. Debt Issues in Africa: Thinking beyond the HIPC Initiative to Solving Structural Problems
- Author:
- Alemayehu Geda
- Publication Date:
- 03-2002
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- This paper attempts to answer the following question: If the HIPC Initiative is fully successful and managed to write-off all debt that is owed by Africa, will the debt problem be over? The answer is 'no'. This pessimist answer is arrived at by examining the historical origin of African debt and the structural problems the continent is confronted with. The literature about the origins of the African debt crisis lists a number of factors as its cause. The oil price shocks of 1973-74 and 1978-79, the expansion of the Eurodollar, a rise in public expenditure by African governments following rising commodity prices in early 1970s, the recession in industrial countries and the subsequent commodity price fall, and a rise in real world interest rate are usually mentioned as major factors. Surprisingly, almost all the literature starts its analysis either in the early 1970s or, at best, after independence in 1960s. The main argument in this paper is that one has to go beyond this period not only to adequately explain the current debt crisis but also to propose its possible solution. The conclusion that emerges from such analysis is that the African debt problem is essentially a trade problem. Thus, long-run solution to debt points to the importance of addressing trade and trade related structural problems in the continent.
- Topic:
- Development and International Trade and Finance
- Political Geography:
- Africa
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