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11. Aid procurement and the development of local industry: A question for Africa

Author:
Christine Zhang and Jeffrey Gutman
Publication Date:
06-2015
Content Type:
Working Paper
Institution:
The Brookings Institution
Abstract:
Economic development is often tied to the evolution of local industry. One way to assess a country’s emergence as a major player in the global economy is by examining the ability of its domestic firms to compete on the global market. Public procurement—the purchase of goods, works, and services by governments—represents a significant portion of this market, making up an estimated average of 15 to 30 percent of a country’s GDP. Procurement in the developing world is especially noteworthy, since large projects are often partially or wholly financed by external donors such as the World Bank and other international financial institutions (IFIs), which encourage developing country governments to internationally advertise the goods, works, or services they require and to select the most competitive bid they receive. Yet the role of IFI-funded procurement in the emergence of global markets, particularly for and among developing countries, is seldom a topic of empirical study, despite its linkages to global growth.
Topic:
Development, Economics, Emerging Markets, World Bank, and Developing World
Political Geography:
Global Focus

12. A Post-Sanctions Iran and the Eurasian Energy Architecture

Author:
Micha'el Tanchum
Publication Date:
09-2015
Content Type:
Working Paper
Institution:
Atlantic Council
Abstract:
With the removal of international sanctions on Iran, different markets will have a great interest in importing Iranian gas. But which market will benefit the most? In A Post-Sanctions Iran and the Eurasian Energy Architecture, Micha'el Tanchum, a Nonresident Senior Fellow at the Atlantic Council's Global Energy Center and the Eurasian Energy Futures Initiative, argues that the lifting of the sanctions carries the potential to radically restructure the Eurasian energy architecture and, as a consequence, reshape Eurasian geopolitics. After Iran meets its domestic demand for natural gas, it will have the option to export gas to two of the following three markets: European Union/Turkey, India, or China. Iran will not have enough natural gas to supply all three of these major markets. The pattern of Iran's gas exports in the immediate post-sanctions period will shape the relationship between two competing orientations in the Eurasian energy architecture: a system of energy relationships reinforcing the EU's outreach to the Eastern Neighborhood alongside a system of energy relationships reinforcing China's OBOR integration project. A pivot to China will not be favorable to EU's and NATO's interests as it decreases Europe's energy security. By contrast, an expanded Southern Gas Corridor to Europe would promote the extension of Euro-Atlantic influence in Eurasia.
Topic:
Economics, Emerging Markets, Energy Policy, and Sanctions
Political Geography:
Iran and Eurasia

13. World on the Move: The Changing Global Income Distribution and Its Implications for Consumption Patterns and Public Policies

Author:
Tomas Hellebrandt and Paolo Mauro
Publication Date:
12-2015
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
In the next two decades, hundreds of millions of people in emerging economies are projected to reach income levels at which they will be able to afford cars and air travel. As purchasing power increases worldwide, people will spend proportionately less on food and beverages and more on transportation. Higher spending on transportation, especially in China, India, and Sub-Saharan Africa, will increase pressures on the infrastructure in these economies and aggravate global climate change. Governments will need to respond to these challenges in a fiscally sustainable and environmentally responsible way.
Topic:
Emerging Markets, International Trade and Finance, Politics, and Economies
Political Geography:
Global Focus

14. Can Foreign Exchange Intervention Stem Exchange Rate Pressures from Global Capital Flow Shocks?

Author:
Olivier Blanchard, Gustavo Adler, and Irineu de Carvalho Filho
Publication Date:
11-2015
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Many emerging-market economies have relied on foreign exchange intervention (FXI) in response to gross capital inflows. The authors study whether FXI has been an effective tool to dampen the effects of these inflows on the exchange rate. To deal with endogeneity issues, they look at the response of different countries to plausibly exogenous gross inflows and explore the cross-country variation of FXI and exchange rate responses. Consistent with the portfolio balance channel, they find that larger FXI leads to less exchange rate appreciation in response to gross inflows.
Topic:
Economics, Emerging Markets, Foreign Exchange, and Monetary Policy
Political Geography:
Global Focus

15. Are Capital Inflows Expansionary or Contractionary? Theory, Policy Implications, and Some Evidence

Author:
Olivier Blanchard, Jonathan D. Ostry, Atish R. Ghosh, and Marcos Chamon
Publication Date:
11-2015
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
The workhorse open-economy macro model suggests that capital inflows are contractionary because they appreciate the currency and reduce net exports. Emerging-market policymakers, however, believe that inflows lead to credit booms and rising output, and the evidence appears to go their way. To reconcile theory and reality, the authors extend the set of assets included in the Mundell-Fleming model to include both bonds and nonbonds. At a given policy rate, inflows may decrease the rate on nonbonds, reducing the cost of financial intermediation, potentially offsetting the contractionary impact of appreciation. The authors explore the implications theoretically and empirically and find support for the key predictions in the data.
Topic:
Economics, Emerging Markets, International Trade and Finance, and Monetary Policy
Political Geography:
Global Focus

16. The Future of Worldwide Income Distribution

Author:
Tomas Hellebrandt and Paolo Mauro
Publication Date:
04-2015
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Over the next two decades the structure of world population and income will undergo profound changes. Global income inequality is projected to decline further in 2035, largely owing to rapid economic growth in the emerging-market economies. The potential pool of consumers worldwide will expand significantly, with the largest net gains in the developing and emerging-market economies. The number of people earning between US$1,144 and US$3,252 per year in 2013 prices in purchasing power parity terms will increase by around 500 million, with the largest gains in Sub-Saharan Africa and India; those earning between US$3,252 and US$8,874 per year in 2013 prices will increase by almost 1 billion, with the largest gains in India and Sub-Saharan Africa; and those earning more than US$8,874 per year will increase by 1.2 billion, with the largest gains in China and the advanced economies.
Topic:
Economics, Emerging Markets, Globalization, and Labor Issues
Political Geography:
Africa and Asia

17. The Financial Sector and Growth in Emerging Asian Economies

Author:
William R. Cline
Publication Date:
03-2015
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
The financial sectors in Asian emerging-market economies are now relatively unlikely to provoke new financial crises, either because of reforms after the East Asian financial crisis in the later 1990s or because of the dominance of state-owned banks not subject to bank runs. Financial intermediation is surprisingly high and is consistent with higher rates of saving and investment and hence growth in the main economies of the region (as compared to, say, counterparts in Latin America). Nonetheless, there are sharply diverging patterns (e.g., high foreign ownership of banks in Korea versus minimal presence in China) and differing national structures (bank dominated, portfolio oriented, and diversified) within Asia. Cline recommends establishing long-term plans to improve efficiency in state-owned banks or reduce their dominance and pursuing bank capitalization targets at least as ambitious as those of Basel III. Cline also calls for ensuring adequate regulation of growing nonbank intermediaries, reversing a recent trend toward national barriers to foreign banks in some economies, and improving the legal security of bank regulators.
Topic:
Economics, Emerging Markets, Financial Crisis, and Reform
Political Geography:
Asia

18. Corporate Debt in Emerging Economies: A Threat to Financial Stability?

Author:
Barry Eichengreen, Domenico Lombardi, Malcolm D. Knight, Yu Yongding, Stephen G. Cecchetti, Diane De Gramont, Şebnem Kalemli-Özcan, Phillip R. Lane, Ugo Panizza, and Viral V. Acharya
Publication Date:
09-2015
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
During 1999-2007, the international balance sheets of emerging economies grew stronger through a combination of current account surpluses, a shift from debt funding to equity funding, and the stockpiling of liquid foreign reserves. This risk-mitigating strategy improved the international financial standing of many emerging economies and helped these economies withstand the 2008-2009 global financial crisis. However, a combination of domestic and external factors has led to a partial reversal of this strategy, with some emerging economies accumulating significant external debt since 2010. Previewed by the May 2013 “taper tantrum,” there has been considerable speculation that a tightening of dollar-funding conditions and a macroeconomic slowdown in emerging economies may result in financial instability in some emerging economies.
Topic:
Debt, Economics, Emerging Markets, International Trade and Finance, Financial Crisis, and Global Markets
Political Geography:
Global Focus

19. Next Steps for the G20: Turkey 2015

Author:
Paul Martin, Thomas A. Bernes, Olaf Weber, Hongying Wang, and Kevin Carmichael
Publication Date:
11-2015
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
On November 15-16, 2015, leaders of the world's major advanced and emerging economies will meet in Antalya, Turkey for the G20 summit. In this special report, CIGI experts present their perspectives and policy analysis on the key priorities facing the G20 at Antalya. The Right Honourable Paul Martin states that the multilateral institutions created to make globalization work should be a G20 priority. Thomas A. Bernes asks whether G20 leaders and the institutions that support them can articulate a “policy upgrade” that brings more credibility than last year’s Brisbane Action Plan. Olaf Weber argues that the next step for the G20 should be the development of policies and guidelines that help to manage climate change and financial risk in a prudential way. Hongying Wang examines China's rare opportunity as it assumes the presidency of the G20 to push for collective new thinking on how to establish a less fragmented and more coherent global framework for investment governance that balances the interests of different stakeholders. Finally, Kevin Carmichael suggests that the G20 should elevate gender balance to the top of its agenda.
Topic:
Economics, Emerging Markets, Globalization, Governance, G20, Financial Markets, and Turkey
Political Geography:
Global Focus

20. International Regulatory Cooperation on the Resolution of Financial Institutions: Where Does India Stand?

Author:
Renuka Sane
Publication Date:
04-2015
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
This paper provides a brief description of the principles of cross-border resolution that have emerged after the 2008 global financial crisis, and the progress that has been achieved. The paper then provides an overview of developments on resolution of financial firms in India. It finds that while there is cognizance of the need for international cooperation on resolution, the focus is on first developing institutional capacity on domestic resolution that can interact with the international community in the future. The policy choices of India may be reflective of the thinking in a large number of emerging markets, which considerably lag behind the more developed markets, partly due to lower interconnectedness and partly due to limited experience in domestic resolution.
Topic:
Development, Emerging Markets, International Trade and Finance, Political Economy, and Financial Crisis
Political Geography:
India