External Sector Research Articles

Reserves quantity and economic stability: the central bank of Ghana's position and practices

Discussions on Reserve Adequacy Assessment on a country-specific basis have been scant in the literature despite its significance. This situation has led to calls for the discussions on reserves holdings and adequacy levels to be more rooted in the country's Article IV consultation report.In this study, we examined if reserves build-up by the central bank of Ghana meets the specific metrics of theoretical reserve models such as the reserves to M2 growth metrics and the Greenspan-Guidotti rule metrics. We also determined whether the reserves build-ups correctly adjust to economic and policy variables and whether these adjustments are consistent with the predictions of empirical theories and findings. We again examined whether exchange rate depreciations contribute to positive reserves accumulation by the central bank of Ghana.Using Vector Error Correction Model, this research has rejected the short-run matching of the reserves stock of the central bank of Ghana to the theoretical standard metrics of 20% of broad money and 100% of short-term debts. These results have implications on the future credit ratings of the country and could also make future borrowing more expensive. Also, the impulse response functions showed a mixed result of the adjustments in reserves build-up to the predictions of empirical theories and findings. Additionally, the analysis proved the long-run test of restriction of exchange rate depreciation on positive reserves build-up of the central bank. However, the short-run adjustments of the exchange rates on reserves rejected this relationship. Furthermore, the decomposition analyses showed that short-run variations in reserves are explained by external forces, whereas the long-run variations are explained through the financial sector and partly by external forces. Therefore, an econometric specification of reserves beyond three months must specify in the model both the financial sector and external sector variables.

Governance, domestic resource mobilization, and inclusive growth in sub-Saharan Africa

This study investigates the role of governance in the resource mobilization-inclusive growth relationship. We explore the difference Generalized Method of Moments (GMM) estimation technique to examine this relationship in 27 sub-Saharan African countries for the period 1995–2015. This study uses aggregate tax and disaggregated taxes to capture domestic resource mobilization. The findings from our empirical analysis indicate that the persistence level of inclusive growth determines to a large extent, the current growth inclusiveness in the SSA region. The results show that the aggregate tax and disaggregated taxes do not have a significant impact on inclusive growth. The results also show a positive direct impact of all dimensions of governance on inclusive growth. All dimensions of governance have direct positive effect on inclusive growth. However, these dimensions exert no palpable catalytic role in enhancing the extent to which resource mobilization facilitates inclusive growth. By implication, the resource mobilization frame seems disconnected from the pace of governance as evident by low level of tax efforts while governance infrastructure is beginning to have some effects to galvanize benefits of economic growth to citizens. The results are indicative of how other seemingly easy sources of finance have been a distraction for the governments in the region. The tax efforts by governments are significantly low which make them less accountable to the citizens. These findings should prompt policymakers to develop reliable tax reforms coupled with quality governance to make growth inclusiveness in the region a reality. This will include building a strong database with information on taxpayers in the country at individual, corporation and external sector levels as well as quality institutions that will ensure accountability.

Trends in the Development of the Balance of Payments and the International Investment Position of Russia

The article deals with the economic and statistical analysis of trends in the development of statistical data on the balance of payments and the international investment position of Russia over the past 15 years, indicating the sustainable development of the foreign economic sector of the Russian economy.The article begins with addressing the scope and subject matter of the study of the balance of payments and the international investment position of the country. Then the author examines external economic activities for each of the three periods depicting the influence of the crisis phenomena in the global economy in 1998, 2008 and 2014. Within these periods the author considers the interaction of the world and Russian economies, serious reduction of the external sector of the Russian economy in these periods of crisis and generally the deterioration of the results of foreign economic activity of the country. Comparing the balance of payments and international investment position before and after crisis periods it is possible to note the good state government management of the external sector of the Russian economy, which helped to restore the balance of payments of the country and to increase its net international investment position after the crisis.On a final note, it is concluded that the most effective and efficient for external regulation in a crisis is the so called profitable method when the expense of centralized redistribution of income and cash management of financial flows, is formed in the margin in the markets, determines the scale and direction of cash flows, are governed by incorporated in the cost of exported products yield. The market method with the help of tariff pricing and regulation does not allow to fully control and predict the vector of cash flows in a crisis, redistribute profitability between sectors of the economy and even “save” borrowers in crisis situation.

Georgia

An external sector statistics (ESS) technical assistance (TA) mission visited the National Statistics Office of Georgia (Geostat) in Tbilisi, Georgia, during May 6–10, 2019. It was undertaken at the request of Geostat and was a follow up to the TA mission conducted in November 2016. The main objectives of the mission were to assess the Geostat’s progress in the area of external sector statistics (ESS) and provide further recommendations on improving the data collection and compilation for producing the financial account components, including direct investment statistics, in an integrated format. Additionally, the mission worked closely with the National Bank of Georgia (NBG)—the institution in charge of compilation of balance of payments, international investment position (IIP), and external debt statistics—on issues related to reconciliation between the data provided by the Geostat with compiled ESS datasets.

An Assessment of Budget Deficit Financing and Nigeria’s External Sector Performance (1990-2017)

This paper assessed Budget Deficit Financing and Nigeria’s External Sector Performance (1990-2017); the general objective of the study is to assess Budget Deficit Financing of Nigeria in the context of her performance in the External Sector while the specific objective is tied to evaluating the implications of Budget Deficit Financing on Nigeria’s Net Trade and Foreign Direct Investment. The ADF unit root test and the Autoregressive Distributed Lag (ARDL) models were used as the estimation techniques of the data analysis. The findings of the study showed that 78% of the total variation in Nigerian Net Trade (NT) resulted from the explanatory variables (DFB and FDI) included in the model and conclude that: Budget Deficit Financing (DBF) has insignificant positive impact on the Nigerian External Sector Performance during the period reviewed, and that, FDI’s impact is significant and positive on the Nigeria’s External Sector Performance during the period reviewed. Hence, we recommend that government should focus on fiscal and monetary policies that will enshrine fiscal discipline for at levels of government and its agencies.

Testing the Validity of the Triple Deficit Hypothesis for Nigeria

This paper tests the validity of the triple deficit hypothesis in Nigeria by examining the causal relationship among current account deficit, financial account deficit, and fiscal deficit within a five-variate ARDL framework complemented with GMM framework for the period 2008-2017 using quarterly data. The paper obviates the variable omission bias that characterizes most existing studies. The ARDL-bound testing technique confirms that there is the presence of a long-run bi-causal relationship between current account and financial account deficits in Nigeria. The results based on the model and empirical outputs suggest that authorities of this economy must put in place a fully fiscal and monetary discipline policy that should ensure the drastic curtailment of fiscal deficit and create a conducive environment to attract foreign remittances and foreign investment, which would help to generate healthy external balances. In addition, exchange rate stability can promote the export sector and minimize external imbalances through creating critical surpluses in current accounts, including related comprehensive discipline policies that may be pursued, which enable the external sector, financial and fiscal sectors, and monetary sector to perform without creating adverse imbalances in this economy.

Increase in the bioavailability of trace metals after sediment resuspension

This study evaluated the potential mobility of metallic contaminants (Cd, Cr, Cu, Ni, Pb and Zn) present in sediments at the mouth of Sao Francisco Channel (Sepetiba Bay, RJ), using resuspension tests. Fourteen surface sediment and superficial water samples were collected along a salinity gradient from the river mouth into the bay. The resuspension tests consisted in the mechanical agitation of humid sediment aliquots in local unfiltered water, in a ratio of 7.5 g:100 mL, during 1 h and 24 h. The determination of the metals in the bioavailable fraction was performed in ICP-OES, after extraction in 1 mol L−1 HCl. Significant differences were observed between the central and external sectors for Cd (p = 0.009), Cr (p = 0.017), Ni (p = 0.047) and Zn (p = 0.007) concentrations (Kruskal–Wallis). The water’s temperature (p < 0.001), pH (p < 0.05) and dissolved oxygen (p < 0.001) decreased in both time intervals in comparison to the initial measures before resuspension. The concentrations of Zn in the sediment increased from 222 to 316.2 mg kg−1 after 24 h agitation (Kruskal–Wallis; p < 0.05) at the external sector, possibly because this region has stronger oxidizing conditions. In general, a significant increase in the metals’ concentrations was observed after resuspension, especially for the samples from the central sector that showed more than 90% of increase in metals concentrations after 24 h of agitation. These increases could lead to higher ecological risks to the local biota, especially during dredging activities.

Choques externos e desequilíbrios financeiros: uma interpretação sobre a crise brasileira

&lt;p&gt;This paper investigates the causes of the Brazilian recession that began in 2014. If, on the one hand, the conventional diagnosis attributes the crisis to a lack of control of public finances, other interpretations emphasize external shocks and excessive indebtedness of the private sector. The alternative hypothesis is that the deterioration of public accounts is a consequence of the crisis and not its cause. The methodology developed by Toda and Yamamoto (1995) is used to verify the hypothesis of non-causality of Granger between the time series of the balances of the private sector, public sector and current account, from the Central Bank of Brazil (BCB, 2017) for the 2002-2017 period. The results suggest that the balances of the external and private sectors cause in the Granger sense the balance (result) of the public sector.&lt;/p&gt;

Agricultural Exports and Economic Growth in Nigeria: An Econometric Analysis

It has been observed that export promotion drive boosts economic growth of developing countries (Nigeria inclusive) through the multiplier effects that the income earned from exports has on the economy. Prior to the discovery of oil, agriculture has been the main contributor to the Nigerian external sector. It is in the light of this that this study sets out to examine the impact of agricultural export on Nigeria’s economic growth. This study used the Autoregressive Distribution Lag (ARDL) econometric technique to analyze the long run relationship and the impact of agricultural exports on Nigeria’s economic growth. Economic growth is the dependent variable, and is proxied by the real gross domestic product, the explanatory variables include: agricultural export, foreign direct investment, inflation rate and the labour force. The results from the ARDL technique revealed that agricultural exports significantly affect Nigeria’s economic growth; this suggests that, a 1percent increase in - agricultural export will boost economic growth in Nigeria by approximately 25percent.Therefore, from the results, the study recommended that agricultural export need to be promoted through the increase in agricultural production base.

Bringing Local Food to Global Market: A Food Technology Perspective

It has been observed that export promotion drive boosts economic growth of developing countries (Nigeria inclusive) through the multiplier effects that the income earned from exports has on the economy. Prior to the discovery of oil, agriculture has been the main contributor to the Nigerian external sector. It is in the light of this that this study sets out to examine the impact of agricultural export on Nigeria’s economic growth. This study used the Autoregressive Distribution Lag (ARDL) econometric technique to analyze the long run relationship and the impact of agricultural exports on Nigeria’s economic growth. Economic growth is the dependent variable, and is proxied by the real gross domestic product, the explanatory variables include: agricultural export, foreign direct investment, inflation rate and the labour force. The results from the ARDL technique revealed that agricultural exports significantly affect Nigeria’s economic growth; this suggests that, a 1percent increase in - agricultural export will boost economic growth in Nigeria by approximately 25percent.Therefore, from the results, the study recommended that agricultural export need to be promoted through the increase in agricultural production base.

THE MEDIATING ROLE OF SUPPLIER NETWORK, THE MODERATING ROLE OF FLEXIBLE RESOURCES IN THE RELATIONSHIP BETWEEN LEAN MANUFACTURING PRACTICES AND THE ORGANIZATIONAL PERFORMANCE

Purpose: Given the internationalization of business today, it illustrates the importance of companies looking for overseas market opportunities for the capture of and sustainability of competitive advantage. Following the success of companies from newly developed nations such as the Far East Asian nations of the Republic of Korea and the Republic of China, Taiwan and South East Asian countries such as Singapore, emerging economies are shifting to external sector growth through export industries from the internal sector growth of import substitutes industries. Thus the current study is interested in exploring the nexus between supply chain integration, export marketing strategies and export performance of Indonesian manufacturing firms.&#x0D; Methodology: Employing the survey-based methodology, the SEM-PLS technique is used to test the hypothesized relationships. So, the current study has used SEM-PLS as a statistical tool to answer the research questions raised in this study and research objectives envisaged in the current study.&#x0D; Results: The findings of the study have provided support to the theoretical foundation and proposed hypothesis of the current study. Current study will be helpful for policymakers and practitioners in understanding the issues related to supply chain risk, supply chain integration and supply chain agility. In the author's knowledge this is among very few pioneering studies on this issue.

EXPLORING THE NEXUS BETWEEN SUPPLY CHAIN INTEGRATION, EXPORT MARKETING STRATEGIES PRACTICES AND EXPORT PERFORMANCE: A CASE OF INDONESIAN FIRMS

Purpose: Given the internationalization of business today, it illustrates the importance of companies looking for overseas market opportunities for the capture of and sustainability of competitive advantage. Following the success of companies from newly developed nations such as the Far East Asian nations of the Republic of Korea and the Republic of China, Taiwan and South East Asian countries such as Singapore, emerging economies are shifting to external sector growth through export industries from the internal sector growth of import substitution industries. Thus, the current study is interested in exploring the nexus between supply chain integration, export marketing strategies and export performance of Indonesian manufacturing firms. Methodology: Employing the survey-based methodology, the SEM-PLS technique is used to test the hypothesized relationships. So, the current study has used SEM-PLS as a statistical tool to answer the research questions raised in this study and research objectives envisaged in the current study. Results: The findings of the study have provided support to the theoretical foundation and proposed hypothesis of the current study. Current study will be helpful for policymakers and practitioners in understanding the issues related to supply chain risk, supply chain integration and supply chain agility. In the author's knowledge this is among very few pioneering studies on this issue.

Mineralogical petrographic and geochemical characterization of marmora from the Roman quarries of Cabra (Córdoba) and Antequera (Málaga), External Sector Areas of the Betic Chain, Spain

This paper the results of the mineralogical-petrographic and geochemical characterization of marmora from the quarry sectors of Cabra, Córdoba, and Antequera, Málaga in Spain. They are located in the western area of the Subbetic Zone within the Betic Chain and were exploited as marmora in Roman times. The archaeometric analysis of these quarries has a great importance for archaeological research since the proper characterization of geological outcrops to know the source of a significant number of architectural, epigraphic, sculptural, inscription and decoration elements used in the Roman Baetica province. As it is very difficult to determine the commercialization area or use for each rock type found in these two quarries sectors, the study methodology proposed in this paper is based on the characterization of the rocks sampled from these quarries by using also different analytical techniques, including polarized optical microscopy, X-ray diffraction and X- ray fluorescence. In the Cabra quarries three stone lithotypes have been identified: CW1, C-R1 and C-R2. The C-R1 and C-R2 lithotypes (Red Cabra varieties) show differences from a petrographic-mineralogical and chemical point of view: higher SiO2 and Al2O3 in C-R1 than in C-R2, which is related to a higher content in quartz and phyllosilicates, the C-R2, which also presents calcite-filled veins and traces of hematite. In the Antequera quarries, four stone lithotypes have been identified: A-RS, A-W2, A-R and A-BR lithotypes. The A-R lithotype (Red Antequera variety) is characterized by presence of siderite, iron oxides and pelagic ooids. The breccia (A-BR) show fragments of red micritic and oolitic limestones, a characteristic stone variety of the Penibetic. The A-RS lithotype contains siderite and hematites. Petrographic or mineralogical differences have not been found in the white varieties (CW1 and A-W2), but some geochemical differences related to higher content in P2O3 in CW1 are of particular interest.

External Sector Report, July 2019

The IMF’s 2019 External Sector Report shows that global current account balances stand at about 3 percent of global GDP. Of this, about 35–45 percent are now deemed excessive. Meanwhile, net credit and debtor positions are at historical peaks and about four times larger than in the early 1990s. Short-term financing risks from the current configuration of external imbalances are generally contained, as debtor positions are concentrated in reserve-currency-issuing advanced economies. An intensification of trade tensions or a disorderly Brexit outcome—with further repercussions for global growth and risk aversion—could, however, affect other economies that are highly dependent on foreign demand and external financing. With output near potential in most systemic economies, a well-calibrated macroeconomic and structural policy mix is necessary to support rebalancing. Recent trade policy actions are weighing on global trade flows, investment, and growth, including through confidence effects and the disruption of global supply chains, with no discernible impact on external imbalances thus far.

Marco regulatorio cambiario y dinámica del sector externo: un análisis del caso argentino reciente

El presente trabajo analiza los aspectos institucionales que caracterizaron el funcionamiento del mercado cambiario argentino durante la etapa de la posconvertibilidad (2002-2017) y su impacto sobre la dinámica del sector externo. La revisión de los esquemas regulatorios vigentes durante las tres etapas que comprende este periodo, esto es, la de construcción del marco regulatorio del Mercado Único y Libre de Cambios (2002-2011), de control de cambios (2012-2015) y de liberalización (2016-2017), nos permite concluir que las reformas estructurales instrumentadas por el nuevo gobierno no solo no han revertido la tendencia hacia el deterioro del sector externo observada desde el 2011, sino que incluso han tendido a incorporar mayores riesgos sistémicos.

Financial Structure, Misery Index, and Economic Growth: Time Series Empirics from Pakistan

This study empirically analyzes the impact of the financial structure and misery index on economic growth in Pakistan. We adopted Autoregressive-Distributed Lag (ARDL) for a co-integration approach to the data analysis and used time series data from 1989 to 2017. We used GDP as the dependent variable; the Financial Development index (FDI) and misery index as the explanatory variables; and remittances, real interest, and trade openness as the control variables. The empirical results indicate the existence of a long-term relationship among the included variables in the model and the FD index, misery index, interest rate, trade openness, and remittances as the main affecting variables of GDP in the long run. The government needs appropriate reform in the financial sector and external sector in order to achieve a desirable level of economic growth in Pakistan. The misery index is constructed based on unemployment and inflation, which has a negative implication on the economic growth, and the government needs policies to reduce unemployment and inflation.

Role of Elisional Water Exchange in the Hydrodynamic Field Formation in the Yamal–Kara Depression

Unique material pertaining to the hydrodynamics of petroliferous rocks in the Yamal–Kara Depression has been summarized for the first time in the last 30 years. The region is distinguished by a wide development of anomalous high formation pressure (Ca up to 2.21) in both Jurassic and Lower Cretaceous rocks. Results of the study of filtration-capacity properties and hydrodynamic characteristics of reservoir rocks in the Jurassic–Cretaceous section suggest a dominant role of the elisional water exchange in the formation of modern structure of the hydrodynamic field. Elisional lithostatic system located at a depth of about 2–2.5 km begins to acquire features of elisional thermodehydration. At the current development stage of the basinal aquifer system, spacious piezomaximum zones (Bol’shaya Kheta and Kara megasyneclises) became internal water load (supply) zones with the maximal hydrogeological closedness in the Earth’s interior. Piezominimum zones extending along the main centers of oil-and-gas generation match the largest oil-and-gas fields (Vankor–Suzun, Bovanenkovo, Urengoi, and others). At present, we can define in the study region two types of natural aquifer systems: (i) elisional type prevailing in the internal sectors (e.g., Yamal–Kara Depression); (ii) infiltrational type prevailing in the external (marginal) sectors (West Siberian sedimentary basin).

The State Fights Back: A comparative Analysis of Law and Order Situation of Pakistan During 2008 – 2012 (PPP Period) and Its Effects on the Economy

The number of blasts started to escalate in 2004 but jumped dramatically in 2007 which was the worst year. The number declined in 2008-2010 but rose sharply again in 2011. In 2008, 2148 terrorist attacks were recorded throughout the country in which 7997 people were killed and 9670 were injured. In this year 63 suicide attacks were recorded. In 2009, 2586 terrorist attacks were recorded in which 3021 people were killed and 7334 were injured. Most of these attacks took place in N.W.F.P. There was 5% increase in number of people killed and injured in this year as compared to previous year. In 2010, 2113 terrorist attacks took place. Number of people killed in these attacks was 2913 and injured 5824. There was 11% decrease in number of incidents and terrorism as compared to previous year. In 2011, Drone attacks and Suicide attacks were reported less. Target killing became the new threat. Only in August 2011, 97 Cases of target killing were reported and 324 people lost their lives in Karachi. In 2012, there were 7% decrease in border attacks, 29% in suicide attacks and 41% in Drone attacks. But 28% increase in sectarian violence, the number of target killing was also increased by 811 and the number of terrorists arrested was 1238. All the above mentioned events lead to serious instability in every sector of the country. Pakistan's economy is affected almost at all economic fronts which comprises of external, industrial, agricultural, business and services sector, etc. Each and every upcoming year for Pakistan has been more effecting the law and order situation in the country.Terrorism creates uncertainty, reduces confidence and increases risk perceptions; leading to lower rates of investment and lower economic growth. In fact, Pakistan has not only lost precious lives and infrastructure; according to official estimates, it has also suffered a loss of around $ 35-40 billion. Pakistan has suffered more than any other country due to the war on terror.

Efecto de los precios del petróleo en la actividad económica sectorial de México. Análisis para el periodo 2002-2018

Este trabajo analiza el papel que tienen los precios del petroleo en las variaciones de la actividad economica sectorial de Mexico. El periodo analizado es de enero de 2002 a enero 2018, con frecuencia mensual. La metodologia propuesta es la de un modelo de Vector Auto Regresivo Estructural (SVAR) para cada sector economico. En dicho modelo se anaden los precios del petroleo, el indice de actividad industrial por sector, los precios al consumidor, la tasa de interes nominal, la actividad economica y el tipo de cambio real como variables de control. Adicionalmente, se construyen funciones impulso respuesta para todos los sectores y sub-sectores industriales. La originalidad del trabajo radica en ser uno de los pioneros en analizar los efectos de precios del petroleo en las diferentes ramas de actividad sectorial en Mexico. Entre los resultados destacados se encuentra que variaciones de los precios del petroleo afectan positivamente a la rama manufacturera. Asimismo, se encuentra que variaciones en el gasto publico afectan directamente el sector de la mineria. Se concluye que los sectores mas ligados al sector externo son los mas influenciados ante shocks en los precios del petroleo.

A Contrary View on Indian Economic Crisis of 1991

India was passing through difficult times on various fronts like Economic, Political and External sector in late 1980’s. Rupee was pegged with a basket of currencies and exchange rate of rupee with foreign currencies was highly regulated by RBI. Rupee was devaluated several times on the guidelines of IMF in 1990 and 1991. As it was always earlier, India’s current account balance was negative and country was facing Balance of Payment difficulties in 1991. India’s foreign exchange reserves had depleted and IMF and world community was not willing to help India unless it brings in economic reforms. This situation though emerged in few months; economists consider various factors responsible for the situation, which were results of policies of government and chronological events occurred for several years. In this paper author will review the available literature and will present his contrary view on the said economic crisis.