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15601. Using purchasing power parities to compare countries: Strengths and shortcomings

Author:
Patrick Honohan
Publication Date:
12-2020
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
Good international economic policy requires good comparative data on national economic performance. In May 2020, the World Bank published the latest comprehensive update of purchasing power parities (PPPs), as part of the International Comparison Program. Produced for 176 countries, these PPPs are used to convert data (especially GDP and other quantities based on national income accounts) from national currencies to a common basis in a way that is meaningful for economic analysis. PPP-adjusted data are essential because the distortions caused by sharp exchange rate movements are significant, especially for times of macroeconomic turbulence. The newly released PPP data contain fewer surprises than those published in previous updates and are an invaluable tool, but Honohan explains why PPPs should be used with caution and an understanding of their limitations. Apart from removing distortions caused by market exchange rate movements, PPPs remove the impact of other factors affecting relative prices, especially productivity differences, which Honohan argues should not be removed if one wishes to compare the overall economic size or strength of a country or region. Adjusting for productivity, he finds that the United States retains its position as the world’s largest economy for the time being, and the European Union (even without the United Kingdom) is just ahead of China.
Topic:
World Bank, Economic Growth, Currency, Data, and Productivity
Political Geography:
China, Europe, and United States of America

15602. China's Financial Opening Accelerates

Author:
Nicholas R. Lardy and Tianlei Huang
Publication Date:
12-2020
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
Despite predictions by some observers that the United States and China are headed for a “decoupling,” China’s integration into global financial markets is accelerating. Regulatory reform has opened China’s financial market to many US and other foreign financial institutions. Foreign ownership of onshore Chinese stocks and bonds is growing rapidly and is likely to continue to expand in 2021. And inbound foreign direct investment (FDI) is on track to hit a new record in 2020. This integration is very asymmetric, however. China retains relatively tight control over both outbound direct investment and outflows of portfolio capital. US efforts to roll back the trend of deepening financial integration by threatening to delist Chinese companies traded on US markets and prohibiting any US investment in 35 Chinese companies that the Department of Defense alleges to be linked to the Chinese military appear to be largely symbolic.
Topic:
Financial Markets, Investment, and COVID-19
Political Geography:
China, Asia, and United States of America

15603. Prospects for the Development of EU Health Policy after the COVID-19 Pandemic

Author:
Adam Szymański
Publication Date:
06-2020
Content Type:
Special Report
Institution:
The Polish Institute of International Affairs
Abstract:
The COVID-19 pandemic has exposed both the weaknesses of Member States’ health systems and the limitations of the EU’s mechanism to respond to cross-border health threats. Strengthening the EU’s resistance to health crises will become an important point in budget negotiations and the deliberations of the planned Conference on the Future of Europe. Although there are some supporters of granting the EU greater powers in this area, the changes will most likely be limited to increasing the resources of European health institutions and improving the mechanisms of cooperation between states in order to better respond to future crises.
Topic:
Development, Regional Cooperation, Health Care Policy, Budget, European Union, and COVID-19
Political Geography:
Europe

15604. Chinese Discourse on NATO

Author:
Justyna Szczudlik
Publication Date:
06-2020
Content Type:
Special Report
Institution:
The Polish Institute of International Affairs
Abstract:
Chinese experts’ interest in NATO has been growing for a year. The reason is the debate on China that began in the Alliance last year. China treats NATO as part of its rivalry with the U.S., vindicated by Chinese analysts’ emphasis on divergences between members, critical assessments of U.S. NATO policy and their conciliatory approach to European members. The continuation of the Alliance debate on China, including recognizing it as a threat, may lead the latter to intensify efforts to widen the divisions and seek closer cooperation with Russia.
Topic:
Foreign Policy, NATO, and Alliance
Political Geography:
China, Europe, Asia, and United States of America

15605. Russia’s Arctic Policy

Author:
Agnieszka Legucka
Publication Date:
06-2020
Content Type:
Special Report
Institution:
The Polish Institute of International Affairs
Abstract:
Russia views the Arctic as a contested area with the U.S. and a place of competition with China. It regards any loss of its dominant position as the most important challenge in the Arctic region. To counteract it, Russia develops energy, military, and logistics infrastructure in the region. Although the role of transport in the Arctic, along the Northern Sea Route (NSR), is limited for now, the increased Russian military presence in the region is already a challenge for the security of NATO countries.
Topic:
Security, Foreign Policy, NATO, and Territorial Disputes
Political Geography:
Russia, China, Arctic, and United States of America

15606. Impact of the COVID-19 Pandemic on Ukraine’s Economy

Author:
Daniel Szeligowski
Publication Date:
06-2020
Content Type:
Special Report
Institution:
The Polish Institute of International Affairs
Abstract:
The Ukrainian economy will face a recession in 2020, the scale of which will depend on the fluid pandemic situation at home and abroad. Macro-financial assistance from the IMF and the EU will be crucial to stabilise the economy. To begin a rapid economic recovery, Ukraine needs structural reforms, but implementation of them is unlikely.
Topic:
Reform, Finance, Economy, and COVID-19
Political Geography:
Ukraine and Eastern Europe

15607. The Impact of COVID-19 on India’s Economy and International Standing

Author:
Patryk Kugiel
Publication Date:
07-2020
Content Type:
Special Report
Institution:
The Polish Institute of International Affairs
Abstract:
Despite the government’s restrictive preventive measures, India has emerged as one of the countries most affected by COVID-19, and it has yet to reach the peak of infections. The pandemic has ignited the most serious economic crisis in the country’s history, worsened India’s investment attractiveness, and constrained resources that would otherwise help it pursue a greater international role. The economic crisis also undermines the country’s international image, boosted by the quick and decisive response to the pandemic in its initial phase. At the same time, the economic problems and the continued fight against the pandemic will encourage the authorities to deepen cooperation with the EU in public health, the economy, and security.
Topic:
Economics, Financial Crisis, Economy, and COVID-19
Political Geography:
South Asia and India

15608. The Pandemic as an Impulse for the Development of New Technologies in Sub-Saharan Africa

Author:
Jędrzej Czerep
Publication Date:
07-2020
Content Type:
Special Report
Institution:
The Polish Institute of International Affairs
Abstract:
A deep recession is projected for Sub-Saharan Africa in 2020 as a result of the COVID-19 pandemic. However, the market for new technologies providing solutions helpful during the health crisis, is developing dynamically. In the medium term, the research and development sector will gain importance and become attractive for investments, also for Polish companies.
Topic:
Development, Science and Technology, Research, Business, COVID-19, and Health Crisis
Political Geography:
Africa, Poland, and Sub-Saharan Africa

15609. Ukrainian Labour Migration to the EU During the COVID-19 Pandemic

Author:
Maria Piechowska
Publication Date:
07-2020
Content Type:
Special Report
Institution:
The Polish Institute of International Affairs
Abstract:
According to estimates by the International Organization for Migration, more than 5 million of the 42 million citizens of Ukraine remain abroad, the vast majority of them for economic purposes. The most significant direction of Ukrainian labour migration is the European Union. The COVID-19 pandemic has not resulted in massive returns of migrants to Ukraine—only about 10% of those already abroad in February decided to take this step. However, the pandemic made it more difficult for Ukrainians to leave the country in the spring-summer period when the demand for work in EU countries is usually the highest.
Topic:
Migration, Labor Issues, European Union, and COVID-19
Political Geography:
Europe and Ukraine

15610. The Assumptions of the New U.S. “Defense Space Strategy”

Author:
Mateusz Piotrowski
Publication Date:
07-2020
Content Type:
Special Report
Institution:
The Polish Institute of International Affairs
Abstract:
In response to the growing threats from China and Russia to U.S. security in space and the increased importance of space infrastructure for its civil and military sectors, American authorities began reorganising the armed forces. This includes adoption of the “Defense Space Strategy”, which places the newest branch of the armed forces—Space Force—in the U.S. defence planning. The strengthening of military cooperation with allies in this area, as declared in the document, is an opportunity for Poland to acquire experience in the protection of satellite systems, which are planned for the needs of the Polish armed forces.
Topic:
Defense Policy, Armed Forces, Military Affairs, and Space
Political Geography:
Russia, China, and United States of America