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1001. The Impact of Global Crises, Trade Finance and Aid on Export Flows: A Developing Country Perspective

Author:
Jose Brambila-Macias, Isabella Massa, and Matthew J. Salois
Publication Date:
11-2011
Content Type:
Working Paper
Institution:
Danish Institute for International Studies
Abstract:
In this paper, we use a mixed-effects trade gravity model on a sample of 83 developing countries over the period 1990-2007 to assess the impact of trade finance and foreign aid on bilateral export flows. In addition to traditional variables, we also include a banking crises variable and a global economic downturns variable among the regressors. Differences across developing regions are taken into account. Our results suggest that: (i) trade finance has a positive and significant impact on bilateral export flows in all developing regions except Latin America; (ii) foreign aid matters in all regions; (iii) global economic downturns exert a negative and significant impact on export flows in all developing countries, and especially in Latin American and Sub-Saharan African economies; (iv) banking crises appear to have no significant impact in most developing regions.
Topic:
Economics, Globalization, International Trade and Finance, Foreign Aid, and Financial Crisis
Political Geography:
Africa and Latin America

1002. Chinese Commodity Imports in Ghana and Senegal: Demystifying Chinese Business Strength in Urban West Africa

Author:
Laurence Marfaing and Alena Thiel
Publication Date:
11-2011
Content Type:
Working Paper
Institution:
German Institute of Global and Area Studies
Abstract:
Since the beginning of the twenty‐first century, Africa has seen the arrival of a new form of Chinese migration. Largely independent from big Chinese players, these “new entrepreneurial migrants” come to Africa not as workers in the highly prestigious state projects, but rather to follow their own economic interests. Engaging in business activities as diverse as petty manufacturing, printing, pharmaceutical and medical services, restaurants, beauty salons and last but not least, general trade, these independent Chinese migrants are often acknowledged for bringing affordable new commercial services and goods to low‐income households on the African continent. On the other hand, the high visibility of the Chinese entrepreneurial activities has also sparked anti‐Chinese sentiments among many African entrepreneurs.
Topic:
Economics, Imperialism, International Trade and Finance, and Markets
Political Geography:
Africa, China, and Ghana

1003. Between consensus and confusion: Institutional changes and policy challenges in the EU's development policy Post-Lisbon

Author:
Marikki Stocchetti
Publication Date:
11-2011
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
The Lisbon Treaty anchored the EU development policy at the forefront of the Union's external relations. For the development policy, this provides an opportunity to improve its own role and functions in relation to its own targets, as well as in relation to the Common Foreign and Security Policy and the trade policy. To take this opportunity, the EU development policy actors need to find a means and a vision in the context of the changing institutional landscape and the EU development policy overhaul. A stronger EU development policy as a part of the external relations equation depends on the EU development actors' capability to act jointly in the area of shared competency, and to define the policy's focus and content vis-à-vis the other branches of the EU's external relations. This is of utmost importance in the new institutional context that was formed to implement the Lisbon Treaty. Most notably, the European External Action Service (EEAS) risks inheriting the previous organizational challenges of the EU development policy and creating new ones. The EU Commission proposal 'Agenda for Change' (October 2011) still passes up the opportunity to present a strong vision for the development policy in the EU's external relations along the lines of the Lisbon Treaty. While enhancing the common agenda for the CFSP and the development policy is conducive to development policy objectives, it is alarming that the policy proposal turns a blind eye to the role of the EU trade policy.
Topic:
Development, International Trade and Finance, Regional Cooperation, and Treaties and Agreements
Political Geography:
Europe and Lisbon

1004. Microfinance on the Ground in Post-Conflict Juba, South Sudan

Author:
Crystal Murphy
Publication Date:
10-2011
Content Type:
Working Paper
Institution:
The Wilson Center
Abstract:
Though microfinance is championed in “typical” underdeveloped societies, its appropriateness for societies in the wake of conflict is not certain. Through in-depth field interviews and subsequent narrative analysis, this essay details lived realities of microfinance in Juba, South Sudan since the 20 05 Comprehensive Peace Agreement. It describes how repatriates navigate the complex new economy, credit, and income opportunities to secure livelihoods after war. It finds that microfinance in Juba does serve some worthwhile ends in the post-conflict economy, which, however, complicate the industry's success narratives.
Topic:
Conflict Resolution, Economics, International Trade and Finance, and Peacekeeping
Political Geography:
Africa, South Sudan, and Juba

1005. Ukrainian arms supplies to sub-Saharan Africa

Author:
Paul Holtom
Publication Date:
02-2011
Content Type:
Working Paper
Institution:
Stockholm International Peace Research Institute
Abstract:
Ukraine has consistently been among the 10 largest arms exporters in the world during the past two decades. An estimated 18 per cent of Ukrainian arms exports during 2005–2009 were for recipients in sub-Saharan Africa, specifically to Kenya (or Southern Sudan), Chad, Nigeria, Equatorial Guinea, and the Democratic Republic of the Congo (DRC). Ukraine has supplied surplus aircraft, tanks, armoured vehicles, artillery, SALW and ammunition to armed forces in sub-Saharan Africa. Additionally, Ukrainian companies and individuals have supplied other services related to arms transfers and participated in combat missions for African armed forces.
Topic:
Security, Arms Control and Proliferation, and International Trade and Finance
Political Geography:
Kenya, Africa, Ukraine, Democratic Republic of the Congo, Nigeria, Guinea, and South Sudan

1006. What Can and Cannot Be Done about Rating Agencies

Author:
Nicolas Véron
Publication Date:
11-2011
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
Credit Rating Agencies (CRAs) are prominent participants in the assessment of credit risk by financial markets. They determine and publish credit ratings, which represent the CRA's opinions on issuers' relative probability of default. The market for credit ratings is currently dominated in most western countries by three players: n Standard Poor's (S) is a division of the McGraw- Hill Companies, a US-based media group whose ownership is dispersed (the largest shareholder is Capital Group, with 12 percent of shares); n Moody's Corporation is an autonomous US-based listed company with dispersed ownership (the largest shareholder is Berkshire Hathaway, with 12.5 percent of shares); n Fitch Ratings is a division of the Fitch Group which is jointly owned by Fimalac, a Paris-based listed investment vehicle (60 percent of shares), and the US-based Hearst Corporation (40 percent of shares).
Topic:
Debt, Economics, Globalization, International Trade and Finance, and Markets
Political Geography:
United States

1007. The United States Should Establish Permanent Normal Trade Relations with Russia

Author:
Gary Clyde Hufbauer and Anders Åslund
Publication Date:
11-2011
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
After 18 years, Russia is finally on the verge of acceding to the World Trade Organization (WTO). No country has struggled for so long to become a member of this important organization. The last impediment was removed on November 9, when Russia and Georgia concluded an agreement on monitoring trade flows across their disputed border. The WTO Working Party, which oversaw the negotiations, then approved Russian accession on November 10, clearing the way for formal membership to be adopted at the WTO ministerial conference to be held December 15–17, 2011 (WTO 2011).
Topic:
Conflict Resolution, Economics, International Trade and Finance, Markets, and Bilateral Relations
Political Geography:
Russia, United States, and Georgia

1008. G-20 Reforms of the International Monetary System: An Evaluation

Author:
Edwin M. Truman
Publication Date:
11-2011
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
With great French fanfare the G-20 committed itself in Seoul, Korea a year ago “to build a more stable and resilient international monetary system (IMS), including by further strengthening global financial safety nets.” As subsequently elaborated by French President Sarkozy and other French government officials, the agenda for IMS reform included five elements: surveillance of the global economy and financial system, the international lender-of-last-resort mechanisms (global financial safety nets), the management of global capital flows, reserve assets and reserve currencies, and IMS governance.
Topic:
Economics, Globalization, International Trade and Finance, Markets, and International Monetary Fund
Political Geography:
Korea

1009. The Trans-Pacific Partnership and Asia-Pacific Integration: A Quantitative Assessment

Author:
Peter A. Petri, Michael G. Plummer, and Fan Zhai
Publication Date:
10-2011
Content Type:
Working Paper
Institution:
East-West Center
Abstract:
Two emerging tracks of trade agreements in the Asia-Pacific—one based on the proposed Trans-Pacific Partnership (TPP) agreement and an Asian track—could consolidate the “noodle bowl” of current smaller agreements and provide pathways to a Free Trade Area of the Asia-Pacific (FTAAP). We examine the benefits and strategic incentives generated by these tracks over 2010-2025. The effects on the world economy would be small initially but by 2025 the annual welfare gains would rise to $104 billion on the TPP track, $303 billion on both tracks, and $862 billion with an FTAAP. The tracks will be competitive but their strategic implications are constructive: each would generate incentives for enlargement. Over time, strong economic incentives would emerge for the United States and China to consolidate the tracks into a region-wide agreement. Each track would bring a different template to such consolidation and can be viewed as defining a “disagreement point” in the Asia-Pacific bargaining game. The study is based on an analysis of 48 actual and proposed Asia-Pacific trade agreements and models impacts on variables including sectoral trade, output, employment and job shifts in 24 world regions.
Topic:
Economics and International Trade and Finance
Political Geography:
United States, China, Israel, Asia, Australia/Pacific, and Asia-Pacific

1010. An Evaluation of Overseas Oil Investment Projects Under Uncertainty Using a Real Options Based Simulation Model

Author:
ZhongXiang Zhang, Lei Zhu, and Ying Fan
Publication Date:
11-2011
Content Type:
Working Paper
Institution:
East-West Center
Abstract:
This paper applies real options theory to establish an overseas oil investment evaluation model that is based on Monte Carlo simulation and is solved by the Least Squares Monte-Carlo method. To better reflect the reality of overseas oil investment, the model has incorporated not only the uncertainties of oil price and investment cost but also the uncertainties of exchange rate and investment environment. These unique features have enabled the model to be best equipped to evaluate the value of oil overseas investment projects of three oil field sizes (large, medium, small) and under different resource tax systems (royalty tax and production sharing contracts). In the empirical setting, China was selected as an investor country and Indonesia as an investee country as a case study. The results show that the investment risks and project values of small sized oil fields are more sensitive to changes in the uncertainty factors than the large and medium sized oil fields. Furthermore, among the uncertainty factors considered in the model, the investment risk of overseas oil investment may be underestimated if no consideration is given of the impacts of exchange rate and investment environment. Finally, as there is an important tradeoff between oil resource investee country and overseas oil investor, in medium and small sized oil investment negotiation the oil company should try to increase the cost oil limit in production sharing contract and avoid the term of a windfall profits tax to reduce the investment risk of overseas oil fields.
Topic:
Development, Economics, Energy Policy, International Trade and Finance, and Oil
Political Geography:
China, Indonesia, and Israel