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11. Restoring Debt Sustainability in African Heavily Indebted Poor Countries

Author:
Cyrus Rustomjee
Publication Date:
06-2018
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Debt sustainability among the 30 African low-income countries that previously received debt relief has deteriorated sharply. More than one-third are either back in, or at high risk of, debt distress. Outcomes of the 2017 review of the International Monetary Fund and the World Bank Debt Sustainability Framework for Low-Income Countries and improvements in country-specific debt sustainability assessments can help strengthen the diagnosis of debt vulnerability and improve the quality of policy recommendations respectively.
Topic:
Debt, Poverty, Sustainability, and IMF
Political Geography:
Africa

12. Fiscal Space: What Is It? Who Has It? When to Use It?

Author:
James A. Haley
Publication Date:
08-2018
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
This paper reviews the concept of fiscal space, or the capacity to deploy fiscal stimulus should it be needed; identifies the key factors that determine its size; and discusses considerations relevant to its use. The paper is motivated by the remarkably rapid mobilization of fiscal stimulus in the 2008-2009 global financial crisis, coordinated by the International Monetary Fund (IMF), which was followed by the equally remarkable rapid adoption of austerity in key advanced economies. This switch from stimulus to austerity occurred despite the languid pace of the global recovery, in which growth was, as subsequently described by IMF Managing Director Christine Lagarde, “too low, for too long.” At the time, the change was justified in terms of concerns over large debt burdens and diminished capacity for future action. Curiously, however, the principled voices defending the interests of future generations were silent with respect to more recent tax cuts and the adoption of higher budgeted spending.
Topic:
Budget, Fiscal Policy, IMF, and Stimulus
Political Geography:
Global Focus

13. Shipping and Climate Change: International Law and Policy Considerations

Author:
Aldo Chicop, Meinhard Doelle, and Ryan Gauvin
Publication Date:
09-2018
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
This report investigates the international law and policy challenges to the determination of the international shipping industry’s contribution to climate change mitigation efforts through the International Maritime Organization (IMO), a specialized agency of the United Nations and the competent international organization with respect to shipping in international law. The report sets out the international legal framework that serves as the context for the IMO initial strategy, the challenge of regulating greenhouse gas (GHG) emissions from international shipping, and the process and issues in determining the industry’s “fair share” of mitigation efforts and potential legal pathways. The report concludes with general, policy and legal considerations that have a bearing on the current and possible future directions of the nascent IMO strategy. General considerations include the observation that the complexity and uncertainty underscoring the development of the IMO strategy call for a long-term planning instrument that is integrated and systemic in scope, flexible in approach and adaptive in application. As other regimes and sectors progress in developing and delivering on mitigation efforts, care should be exercised in considering lessons and tools from other sectors for application to shipping, given its uniqueness and that other sector experiences emanate from different contexts and considerations. Given continuing significant differences on GHG issues in the IMO, it is vital for the long-term IMO strategy to be advanced and maintained on the basis of the culture of consensus that has helped shape the IMO as a successful regulatory body.
Topic:
International Law, United Nations, Policy Implementation, IMF, and Shipping
Political Geography:
Global Focus

14. President el-Sisi's Second Term: The Challenge of Legitimacy

Author:
Ofir Winter and Khander Sawaed
Publication Date:
05-2018
Content Type:
Working Paper
Institution:
Institute for National Security Studies (INSS)
Abstract:
As expected, Abdel Fattah el-Sisi was reelected Egyptian president in late March 2018, this time, with 97.08 percent of the vote. More than affording an electoral mandate, the recent elections highlighted the incumbent president's challenge of legitimacy, which is reflected in two spheres. The first is the exacerbation of the internal splits within the ruling military establishment. The second is growing alienation between the ruling establishment and the general Egyptian public and civilian elements. The precarious state of the regime's legitimacy is a cause for regional and international concern. It may detract from the regime's ability to carry out the next stages of the economic reform sponsored by the International Monetary Fund, and will complicate efforts to obtain the cooperation in the war against terrorism by the local civilian population in the Sinai Peninsula. In the medium and long terms, the enhanced internal friction in the military and tension between the ruling establishment and civilian forces may jeopardize the country's stability. The legitimacy challenge also affects Egypt's relations with Israel. The regime needs broad public legitimacy in order to incur political risks, such as controversial decisions in favor of bilateral or regional cooperation with Israel. In addition, a regime with unsteady legitimacy might be tempted to adopt a populist anti-Israel line in order to strengthen its public standing. At the same time, the political situation in Egypt also provides an opportunity for increasing bilateral cooperation with Israel in areas contributing to the regime's legitimacy: the economy, security, energy, water, agriculture, and tourism.
Topic:
Elections, Democracy, Legitimacy, and IMF
Political Geography:
Africa, Middle East, Israel, and Egypt

15. Financing the Economic Stabilization and Growth Programme (Zambia Plus) in the Shadow of the IMF

Author:
Caesar Cheelo
Publication Date:
04-2018
Content Type:
Working Paper
Institution:
Hudson Institute
Abstract:
In February 2018, the IMF reaffirmed its August 2017 formal withdrawal from negotiations with Zambia over a package of financial support. The strong position to hold negotiations came in the IMF’s Article IV Consultations report of 2017, which concluded that Zambia was at high risk of debt distress, and that whilst financial management and fiscal discipline were improving, the extent of the improvement was not sufficient to mitigate the growing public debt and fiscal deficit. Whilst the IMF deal may be off the table for the time being, the many of problems that drove Zambia to engage the IMF most assuredly remain unresolved. Two to three years after the economic minicrisis of 2015, Zambia continued to accrue sizable new debts, to utilize the proceeds poorly (to fund consumption spending) and to run persistent fiscal deficits – albeit a smaller and seemingly better managed deficit in 2017 compared to 2015 and 2016. These issues remain problematic despite the partial economic rebound, with high copper prices, good rains (leading to good harvests and more reliable power supply), and a stable Kwacha providing a strong platform for improvement. Nonetheless, fiscal performance is lagging behind and Zambia may be missing a window to reestablish prudent public financial management.
Topic:
Infrastructure, Governance, Reform, Macroeconomics, IMF, and Public Debt
Political Geography:
Africa and Zambia

16. IN3 - Incubating a New Spain through the Promotion of Entrepreneurship

Author:
James Costos
Publication Date:
09-2015
Content Type:
Journal Article
Journal:
The Ambassador's Review
Institution:
Council of American Ambassadors
Abstract:
Helping entrepreneurs grow their businesses and achieve their full potential is in the interest of anyone who wants to foster prosperity worldwide—that’s why it’s an Obama administration priority. Growth anywhere does some good everywhere, and the fact is that entrepreneurs create jobs and drive economic growth both at home and abroad. In the United States, 40 percent of our $17 trillion economy is generated by companies that did not even exist 20 years ago. Two-thirds of our 65 months of consecutive job growth is driven by small businesses. The owners of those businesses—28 million and growing—employ over half of America’s workforce. As our missions work to expand the global economic recovery, one of the most effective tools we have at our disposal is the promotion of entrepreneurship—a quintessential American value. By deepening the connections between the entrepreneurial ecosystems of the United States and our partners overseas, we can grow our economies, create jobs, and support businesses that will have lasting impact and create prosperity. The good news is that this is easy to do, because the world is more interconnected than ever before. We benefit from unprecedented opportunities to help entrepreneurs access the capital, resources, and networks they need to succeed. We also have the strong support and leader­ship of President Obama, who is personally committed to promoting entrepreneurship worldwide. Spain is a country with a strong and growing entrepreneurial spirit, a plethora of talent, and solid business networks. Although it is starting to emerge from economic crisis, there is still much work to be done to ensure Spain’s continued recovery. The United States Mission is doing its part to consolidate the country’s economic progress by helping a new generation of entrepreneurs achieve their full potential, and generate jobs and eco­nomic growth. We have established a strong partnership with TeamLabs, an organization that teaches the concept of entrepreneurship and engages with thousands of high school students across all regions of Spain. We have produced animated videos for youth called You®Company which tell real life stories of Spanish and US entrepreneurs while exploring the values of motivation, innovation, corporate social responsibility, failure, and critical thinking. We have also organized an Alumni Mentoring Program that we use to link up business leaders, prominent entrepreneurs, and alumni of United States Embassy exchange programs to coach aspiring entrepreneurs and help them build their network of contacts. This past June, we took our entrepreneurship programs to a new level with the launch of IN3 (IN-cubed)—Innovators, Investors, and Institutions—in partnership with Google and Chamberi Valley, a Spanish entrepreneurship association. Aimed at promoting entre­preneur­ship and investment in Spain, IN3 was the first community event hosted at Campus Madrid, one of only a handful of Google spaces around the world where entrepre­neurs can learn, connect, and build companies that will change the world. In August 2015, the International Monetary Fund released a report stating that Spain has more obstacles to entrepreneurship than any other European country. IN3 directly addressed these challenges by bringing together Spanish and American innovators, investors, and institutions to discuss common challenges and solutions for scaling-up interna­tional companies. The event provided Spanish entrepreneurs the opportunity to hear from leading US counterparts and tech investors on how to overcome institutional and investment challenges that inhibit business growth. It also offered US entrepreneurs the chance to explore areas of potential collaboration with their Spanish counterparts and learn from their experiences expanding into other European and Latin American markets. It provided a forum where entrepreneurs and policymakers exchanged ideas on the best ways to promote the creation of new businesses and help successful companies grow. Finally, it allowed US and Spanish innovators the opportunity to discuss their experiences with senior Spanish government officials. Through these interactions, IN3 helped to equip entrepre­neurs with the tools they need to overcome the challenges of expanding their businesses—from finance, to mentorship, to regulations. I was honored to be joined at IN3 by the Administrator of the United States Small Business Administration Maria Contreras-Sweet, Google Executive Chairman Eric Schmidt, His Majesty King Felipe VI of Spain, and leaders from the Spanish government. With their support, we elevated the importance of entrepreneurship and the crucial role entrepreneurs play in driving growth and creating jobs in Spain. Our message reached an audience of 53 million people in Spain through local media exposure, another 3.25 million on Twitter, and became a top-trending topic on US social media. Not only did the conference promote entrepreneurship and bilateral investment opportunities to a diverse audience, but IN3 generated real investment and new business growth for Spanish and US firms. For example, Opinno, the consulting and events firm that produced IN3, established new ties with US design thinking firms and academic institutions and plans to partner with these organizations to propel their international expansion. Several new investments were made in small and medium-sized Spanish companies, totaling hundreds of thousands of dollars, and the Embassy continues to hear of additional business sparked by the conference.
Topic:
Economics, Entrepreneurship, Recovery, and IMF
Political Geography:
United States, Europe, Spain, and North America

17. Greek Entrepreneurs to the Rescue: How to Reinvent the Greek Economy after the Sovereign Debt Crisis

Author:
Nasos Mihalakas
Publication Date:
05-2012
Content Type:
Working Paper
Institution:
The Diplomatic Courier
Abstract:
The Greek dimension of the EU sovereign debt crisis is by now well known to all. Investor anxiety over excessive national debt throughout the EU led to demands for higher interest rates from several governments with higher debt levels and current account deficits. This in turn made it difficult for some governments to finance further budget deficits and service existing debt. Unable to pay for its public debt, the Greek government turned to the EU for financial assistance. The first bailout package was approved on May 2010, which provided the Greek government with a three-year, €110 billion loan. In February 2012, the lending troika (EU, IMF, and ECB) eventually agreed to provide a second bailout package worth €130 billion. This second package included an agreement with banks to "voluntarily" accept a 53.5 percent write-off of some Greek debt, the equivalent of €100 billion, to reduce the country's debt level from €340 billion to €240 billion – or 120.5 percent of GDP – by 2020. So far, all the reforms forced upon Greece centers on how to reduce the government budget. These reforms include reducing the minimum wage for public (and therefore, also private) sector employees by 22 percent, cutting benefits to pensioners and health-care recipients, reducing the government payroll by laying off 150,000 public sector employees by 2015, privatizing government companies, and opening up some industries that were closed to competition. For now, Greece has been brought back from the brink of bankruptcy. Though safe for now, the country could find itself struggling to meet the strict conditions outlined in the second bailout agreement if key structural reforms don’t take place. It is not too late for the crisis to serve as an opportunity.
Topic:
Debt, Financial Crisis, European Union, and IMF
Political Geography:
Europe and Greece