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1731. Will World Bank and IMF Lending Lead to HIPC IV? Debt Deja-Vu All Over Again

Author:
Benjamin Leo
Publication Date:
11-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Four years ago, the G-7 pushed through an unprecedented initiative forcing the international financial institutions to cancel 100 percent of their outstanding debt claims on the world's poorest countries. Through the Multilateral Debt Relief Initiative (MDRI), these heavily indebted poor countries (HIPCs) stand to receive up to $60 billion in debt relief over time. Moreover, the World Bank, African Development Bank, and IMF shareholders approved a new debt sustainability framework to govern future lending decisions and prevent the need for yet another round of systemic debt relief. All parties emerged from these landmark agreements confident that the dragon of unsustainable debt finally had been slain. However, several unsettling trends raise serious questions about the finality of these actions. First, World Bank and AfDB lending disbursement volumes to these very same HIPC countries remain very high, and nearly the same as compared to pre-MDRI. Emergency IMF lending in response to the global economic crisis has compounded the situation. Second, IMF and World Bank growth projections for HIPCs remain overly rosy compared to actual and historical performance. Our new dataset of IMF growth projections suggests a structural optimism of at least one percentage point per year. Third, HIPCs continue to experience significant volatility in country performance measures that has a direct impact on their ability to carry debt sustainably. Taken together, these findings suggest that donor countries should re-examine the issue of debt sustainability in low-income countries and the system for determining the appropriate grant/loan mix. The upcoming IDA and AfDF replenishment negotiations present a timely opportunity to do so. Absent assertive and corrective action, the international community may be faced with the prospect of a HIPC IV agreement in the not too distant future.
Topic:
Development, Economics, and Foreign Aid
Political Geography:
Latin America

1732. FORMA: Forest Monitoring for Action--Rapid Identification of Pan-tropical Deforestation Using Moderate-Resolution Remotely Sensed Data

Author:
David Wheeler, Robin Kraft, and Dan Hammer
Publication Date:
11-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Rising concern about carbon emissions from deforestation has led donors to finance UN-REDD (Reducing Emissions from Deforestation and Forest Degradation in Developing Countries), a program that offers direct compensation for forest conservation. Sustainable operation of UN-REDD and other direct-compensation programs will require a transparent, credible, frequently updated system for monitoring deforestation. In this paper, we introduce FORMA (Forest Monitoring for Action), a prototype system based on remotely sensed data. We test its accuracy against the best available information on deforestation in Brazil and Indonesia. Our results indicate that publicly available remotely sensed data can support accurate quarterly identification of new deforestation at 1 km spatial resolution. More rapid updates at higher spatial resolution may also be possible. At current resolution, with efficient coding in publicly available software, FORMA should produce global updates on one desktop computer in a few hours. Maps of probable deforestation at 1 km resolution will be accessible with Google Earth and Google Maps, with an open facility for ground-truthing each pixel via photographs and text comments.
Topic:
Agriculture, Climate Change, and Development
Political Geography:
Indonesia and Brazil

1733. Is Newer Better? Penn World Table Revisions and Their Impact on Growth Estimates

Author:
Arvind Subramanian, Simon Johnson, William Larson, and Chris Papageorgiou
Publication Date:
11-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
This paper sheds light on two problems in the Penn World Table (PWT) GDP estimates. First, we show that these estimates vary substantially across different versions of the PWT despite being derived from very similar underlying data and using almost identical methodologies; that this variability is systematic; and that it is intrinsic to the methodology deployed by the PWT to estimate growth rates. Moreover, this variability matters for the cross-country growth literature. While growth studies that use low-frequency data remain robust to data revisions, studies that use annual data are less robust. Second, the PWT methodology leads to GDP estimates that are not valued at purchasing power parity (PPP) prices. This is surprising because the raison d'être of the PWT is to adjust national estimates of GDP by valuing output at common international (PPP) prices so that the resulting PPP-adjusted estimates of GDP are comparable across countries. We propose an approach to address these two problems of variability and valuation.
Topic:
Development, Economics, International Political Economy, International Trade and Finance, and International Affairs

1734. Can Global De-Carbonization Inhibit Developing-Country Industrialization?

Author:
Arvind Subramanian, Aaditya Mattoo, Dominique van der Mensbrugghe, and Jianwu He
Publication Date:
11-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Most economic analyses of climate change have focused on the aggregate impact on countries of mitigation actions. We depart first in disaggregating the impact by sector, focusing particularly on manufacturing output and exports because of the potential growth consequences. Second, we decompose the impact of an agreement on emissions reductions into three components: the change in the price of carbon due to each country's emission cuts per se; the further change in this price due to emissions tradability; and the changes due to any international transfers (private and public). Manufacturing output and exports in low carbon intensity countries such as Brazil are not adversely affected. In contrast, in high carbon intensity countries, such as China and India, even a modest agreement depresses manufacturing output by 6-7 percent and manufacturing exports by 9-11 percent. The increase in the carbon price induced by emissions tradability hurts manufacturing output most while the Dutch disease effects of transfers hurt exports most. If the growth costs of these structural changes are judged to be substantial, the current policy consensus, which favors emissions tradability (on efficiency grounds) supplemented with financial transfers (on equity grounds), needs re-consideration.
Topic:
Climate Change, Development, and Economics
Political Geography:
China, India, and Brazil

1735. Back from the cold? The EU and Belarus in 2009

Author:
Grzegorz Gromadzki, Vitali Silitski, Margarita M. Balmaceda, Sabine Fischer, Andrei Liakhovich, Astrid Sahm, and Leonid Zlotnikov
Publication Date:
11-2009
Content Type:
Working Paper
Institution:
European Union Institute for Security Studies
Abstract:
The EU and Belarus have arrived at an important but difficult crossroads. After a long freeze, relations between Brussels and Minsk have been thawing over the past year. In September 2008, the Council of the European Union announced its readiness to 'begin to review the restrictive measures against Belarusian leaders and to take positive and concrete measures that may lead to a gradual engagement, including via a meeting between the European Union troika and the Belarusian Minister for Foreign Affairs'. A month later, on 13 October, the Council decided to restore political dialogue with the Belarusian authorities and to suspend travel restrictions against leading Belarusian officials for a period of six months. The package of restrictive measures imposed on Belarus in 2006 was extended for one year. Since October 2008, three Troika meetings between the EU and Belarus have taken place. They were complemented by a visit to Minsk by EU High Representative Javier Solana in February, and a visit by EU Commissioner for External Relations and European Neighbourhood Policy Benita Ferrero-Waldner in June. Mean- while, the European Commission and the Belarusian govern-ment held consultations and began technical cooperation in the fields of energy, transport, phytosanitary regulations and agriculture at the beginning of 2009. In May 2009, Belarus was included in the multilateral dimension of the Eastern Partner- ship. The EU and Belarus launched a dialogue on human rights issues in June 2009.
Topic:
Development, Diplomacy, and Bilateral Relations
Political Geography:
Europe and Asia

1736. 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

1737. Bamboo Bikes in Kisumu, Kenya

Author:
Katherine Athanasiades, Michelle Eames, Riham Hussein, and Young Rhee
Publication Date:
12-2009
Content Type:
Working Paper
Institution:
Columbia Center on Sustainable Investment
Abstract:
This study was undertaken by Columbia University's School of International and Public Affairs (SIPA) with support from the Millennium Cities Initiative (MCI) at The Earth Institute. The MCI was launched in 2006 to assist selected midsized cities across sub-Saharan Africa in their efforts to achieve the Millennium Development Goals (MDG).
Topic:
Development
Political Geography:
Africa and AustralAsia

1738. Post-Conflict Health Reconstruction: New Foundations for U.S. Policy

Author:
Leonard S. Rubenstein
Publication Date:
09-2009
Content Type:
Working Paper
Institution:
United States Institute of Peace
Abstract:
The stabilization and reconstruction of states emerging from conflict has gained increasing attention in U.S. foreign policy as means to promote well-governed states, avoid future conflict and alleviate the enduring human suffering from war. Over the last two decades, stabilization and reconstruction initiatives supported by the United States and other donors have sometimes included investments in re-establishing – or in some cases, establishing for the first time – a system of health services for the population. Despite the knowledge generated and the encouraging outcomes of many of these programs, however, and the increasing attention to and financial commitments to global health in U.S. foreign assistance, the place and priority of health reconstruction as part of post-conflict U.S. stabilization initiatives remain undefined.
Topic:
Foreign Policy, Development, Humanitarian Aid, and Foreign Aid
Political Geography:
United States

1739. Climate Shame: Get back to the table Initial analysis of the Copenhagen climate talks

Author:
Kate Raworth
Publication Date:
12-2009
Content Type:
Policy Brief
Institution:
Oxfam Publishing
Abstract:
Copenhagen was a unique opportunity to turn the world's course away from climate disaster, towards a safe future for all of us on this small planet. Massive global public mobilization demanded it. But leaders of the major powers negotiated for their national interests, instead of safeguarding our shared destiny.
Topic:
Climate Change, Development, Poverty, and Treaties and Agreements
Political Geography:
United States

1740. The Missing Middle in Agricultural Finance: Relieving the capital constraint on smallholder groups and other agricultural SMEs

Author:
Alan Doran, Ntongi McFadyen, and Robert C Vogel
Publication Date:
12-2009
Content Type:
Working Paper
Institution:
Oxfam Publishing
Abstract:
So far the private sector has made only small progress in responding to the needs of, and opportunities in, the market segment of small-scale agricultural enterprises, after the widespread withdrawal of the paradigm of government funded and controlled agricultural development. The unmet needs for finance of producer associations and other forms of SMEs (small- and medium-sized enterprises) in agriculture, for transactions in the size range £5,000 to £500,000, constitute the missing middle. The crucial issue is how to overcome the barriers to scaling-up the private sector's response.
Topic:
Agriculture, Development, Poverty, and Third World