Topic: Economics - CIAO Search Results

151. International Production Network in the Next Generation and the Role of RCEP

Author:: Mitsuyo Ando, Fukunari Kimura, and Kenta Yamanouchi
Publication Date:: 10-2022
Content Type:: Working Paper
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: This paper attempts to discuss the potential role of RCEP from the perspective of two kinds of international division of labor, i.e., machinery international production networks (IPNs) and digital-related services trade. To consider the possible contribution of RCEP to the widening and deepening of IPNs, we first provide an overview of machinery IPNs in ASEAN and East Asia by employing international trade data, a value-added based index for global value chain (GVC) activities using international input–output tables, and a gravity equation exercise. Then, we focus on trade in two global innovator services – information and communication technology (ICT) services and other business services exports – to foresee the future of the new international division of labour and highlights some policy issues. RCEP should be an evolving, living one. In terms of liberalisation and facilitation as well as international rule-making, which cover the whole region, RCEP is expected to revise and upgrade the contents to support the dynamic international division of labour in East Asia. At the same time, RCEP may play an important role in reducing policy risks due to ad hoc trade policies based on political intension and defending the rules-based trading regime for the regional economy.
Topic:: Economics, International Trade and Finance, Labor Issues, and Digital Economy
Political Geography:: Asia and ASEAN

152. Potential Impact of RCEP and Structural Transformation on Cambodia

Author:: Shandre Mugan Thangavelu and Vutha Hing
Publication Date:: 10-2022
Content Type:: Working Paper
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: This paper examines the potential impact of the Regional Comprehensive Economic Partnership (RCEP) on the Cambodian economy in terms of trade, output growth, and employment. It also provides quantitative (structural gravity model estimation and simulation) and qualitative trade policy evaluation in terms of exports, output, and the structural transformation of the economy in global and regional value chains. The results highlight the importance of RCEP for the pandemic and post-pandemic recovery and the structural transformation of the Cambodian economy. The paper also provides key policy recommendations to fully maximise the benefits of RCEP for Cambodia for inclusive and sustainable growth.
Topic:: Economics, International Trade and Finance, Regional Cooperation, and Global Value Chains
Political Geography:: Asia and Cambodia

153. The Implications of the Regional Comprehensive Economic Partnership (RCEP) for Asian Regional Architecture

Author:: Shiro Armstrong and Peter Drysdale
Publication Date:: 10-2022
Content Type:: Working Paper
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: East Asia’s Regional Comprehensive Economic Partnership (RCEP) came into force in 2022 as the world’s largest free trade agreement. RCEP was concluded, signed and brought into force in the face of major international uncertainty and is a significant boost to the global trading system. RCEP brings Australia, China, Japan, South Korea and New Zealand into the same agreement with the ten member ASEAN group at its centre. It keeps markets open and updates trade and investment rules in East Asia, a major centre of global economic activity, at a time of rising protectionism when the WTO itself is under threat. The agreement builds on ASEAN’s free trade agreements and strengthens ASEAN centrality. One of the pillars of RCEP is an economic cooperation agenda which has its antecedents in ASEAN’s approach to bringing along its least developed members and builds on the experience of capacity building in APEC and technical cooperation under the ASEAN Australia-New Zealand Free Trade Agreement. There is an opportunity to create a framework that facilitates deeper economic cooperation that involves experience-sharing, extending RCEP’s rules and membership at the same time as strengthening political cooperation. The paper suggests some areas that might be best suited to cooperation — that is confidence and trust building instead of or before negotiation — and discusses how non-members such as India may be engaged and the membership expanded. Options such as multilateralising provisions and becoming a platform for policy convergence and coordinating unilateral reforms are canvassed.
Topic:: Economics, International Trade and Finance, Regional Cooperation, and Architecture
Political Geography:: Asia and ASEAN

154. Restrictiveness of RCEP Rules of Origin: Implications for Global Value Chains in East Asia

Author:: Archanun Kohpaiboon and Juthatip Jongwanich
Publication Date:: 10-2022
Content Type:: Working Paper
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: This chapter aims to examine the restrictiveness of rules of origin (RoO) in the Regional Comprehensive Economic Partnership (RCEP) and other key multilateral free trade agreements (FTAs) in East Asia with a view to facilitating the operations of existing global value chains (GVCs). The analysis begins with dissecting PSRs in the RoO Chapter in these FTAs and quantifying them. The key finding is that product-specific rules in RCEP are the most flexible compared to the other multilateral FTAs and more facilitative to GVC operations. This is driven by RCEP-specific features, such as high intra-member trade and the member coverage. The main policy inference is that a full cumulation clause is needed in RCEP to allow a regional value content alternative to be in full effect. Harmonisation in RoO provision across these multilateral FTAs remains a challenge for ongoing negotiation. Monitoring the dynamics of RoO as well as the FTA utilisation is needed so that these multilateral FTAs could be a true stepping stone for trade liberalisation in the broader World Trade Organization multilateral trading system.
Topic:: Economics, International Trade and Finance, Regional Cooperation, and Global Value Chains
Political Geography:: Asia and ASEAN

155. Centrality and Community: ASEAN in the Regional Comprehensive Economic Partnership

Author:: Soo Yeon Kim
Publication Date:: 09-2022
Content Type:: Working Paper
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: This paper examines the Association of Southeast Asian Nations’ (ASEAN) role in the formation of the Regional Comprehensive Economic Partnership (RCEP) agreement. The RCEP project proceeded as trade governance has shifted from the multilateral trade regime under the World Trade Organization to free trade agreements and where the geopolitics of Asia has cast a shadow on the progress of regional integration efforts. The analysis in this paper focuses on ASEAN centrality, both as a concept and practice, in influencing the launch and progress of RCEP. Conceptually, ASEAN centrality is about the capacity of the 10-member group to help launch negotiations for the RCEP agreement and to shape its provisions for governing trade. In practice, the RCEP agreement consolidates and significantly unravels the numerous overlapping trade agreements between ASEAN, 38 in all between individual ASEAN members and its five RCEP partners, Australia, China, Japan, the Republic of Korea, and New Zealand. The paper also examines the relationship between the ASEAN Economic Community (AEC) and RCEP. RCEP provides for further tariff liberalisation between ASEAN members and its five RCEP partners and thus expands the zone of preferential treatment for goods exported from ASEAN and other RCEP members. RCEP also consolidates rules of origin requirements under one agreement, providing for diagonal cumulation and common rules of cumulation for agreement partners. The RCEP provisions can greatly facilitate production and trade along regional supply chains, thus accelerating the progress of the AEC as a single market and production base. Moving forwards, RCEP and ASEAN’s place in it, is likely to be shaped by challenges and opportunities from the Comprehensive and Progressive Transpacific Partnership and the Biden administration’s Indo-Pacific Economic Framework (IPEF) initiative. The ASEAN members with overlapping membership in the IPEF and RCEP will be pivotal in determining areas of cooperation. Regional integration will thus continue to be shaped by ASEAN centrality, and its progress will shape the ASEAN community.
Topic:: Diplomacy, Economics, International Trade and Finance, and Regional Cooperation
Political Geography:: Asia and ASEAN

156. Regional Comprehensive Economic Partnership: Economic Backgrounds of ASEAN and Its Dialogue Partners

Author:: Keita Oikawa, Fusanori Iwasaki, and Shujiro Urata
Publication Date:: 09-2022
Content Type:: Working Paper
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: We overview the economic backgrounds of the countries participating in the Regional Comprehensive Economic Partnership (RCEP) negotiations and two Association of Southeast Asian Nations (ASEAN) Dialogue Partners – the United States (US) and the European Union (EU) – to understand their economic relationships before the signing of the RCEP and their economic interests in the RCEP. We discover that the 16 countries participating in RCEP negotiations vary in terms of economic size, income level, growth pattern, share of trade in the economy, and foreign direct investment (FDI) flows. Additionally, both lower- and higher-income ASEAN Member States (AMS) have received a large amount of FDI, in contrast to Japan and the Republic of Korea (henceforth, Korea), which have seen more FDI outflows from their countries than inflows. In terms of bilateral FDI inflows and outflows, as a centre for regional FDI, Singapore attracts FDI from developed countries (including the US and the EU) and reinvests it in India and other AMS. As an FDI hub, Singapore promotes liberalised regional markets to attract advanced country investors. By examining bilateral trade relationships, we find that as the centre of manufacturing in the world, ASEAN and China have participated in international production networks that also include Japan and Korea since 2000. Japan and Korea have maintained competitiveness in intermediate goods in the region’s production networks, while China notably exports final products to the US and the EU. Amongst the 16 countries participating in RCEP negotiations, India has not had a significant presence in the production networks. Indeed, India has expanded its bilateral trade deficit with China, which probably caused India to withdraw from RCEP negotiations to protect its manufacturing industry. Simulation results of the impacts of the RCEP, using a computable general equilibrium (CGE) model (Global Trade Analysis Project model), show that the countries participating in RCEP negotiations – particularly the less developed AMS – would gain greatly from lowering services trade costs and investment liberalisation. India would also gain significantly from the RCEP. In contrast, countries not participating in RCEP negotiations (the US and the EU) would experience small negative impacts of the RCEP through trade diversion effects.
Topic:: Diplomacy, Economics, International Trade and Finance, and Regional Cooperation
Political Geography:: Asia and ASEAN

157. Regional Comprehensive Economic Partnership, ASEAN’s Agency, and the Role of ASEAN Members in Shaping the Regional Economic Order

Author:: Huong Le Thu
Publication Date:: 09-2022
Content Type:: Working Paper
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: The Regional Comprehensive Economic Partnership (RCEP) – a mega free trade agreement comprising 15 countries – the 10 Association of Southeast Asian Nations (ASEAN) Member States and the dialogue partners (China, Japan, the Republic of Korea, Australia, and New Zealand) was finalised in November 2020. This paper looks at the process of the RCEP negotiations as an example of an ASEAN exercising agency. This paper also argues that RCEP asserts the agency of smaller powers within the trade network – ASEAN and its member states – particularly the more active role of individual members, including Viet Nam and Singapore amongst the most diplomatically supportive of the deal. The circumstances under which RCEP came to life is not trivial. Under Viet Nam’s ASEAN chair in 2020, and amidst the global pandemic, RCEP was finalised. RCEP’s political and geo-economic significance arguably can overtake its economic role. In the time of great power competition where China becomes one of the key economic centres of the world, and the United States (US) competes with a vision of Indo-Pacific, the region’s middle and smaller powers are anxious about becoming ‘collateral damage’, particularly in the process of US–China ‘decoupling’. The ASEAN countries have emphasised the reluctance to ‘choose a side’. RCEP shows that they can show agency in carrying out trade liberalisation at the time when the global leader of the US in this field is missing. A mega-trade deal can be successfully led by smaller, and even developing, economies.
Topic:: Economics, Regional Cooperation, Social Order, and Strategic Interests
Political Geography:: Asia and ASEAN

158. Trade Facilitation in RCEP Countries

Author:: Weixiang Wang and Shandre Mugan Thangavelu
Publication Date:: 09-2022
Content Type:: Working Paper
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: The trade facilitation under the Regional Comprehensive Economic Partnership (RCEP) is critical for regional trade and economic cooperation amongst the 15 member countries. This chapter examines the trade facilitation under RCEP using the available datasets on the trade facilitation index and compares the current trends in trade facilitation across RCEP countries in terms of four dimensions: the World Trade Organization’s Trade Facilitation Agreement, digital trade streamlining, ease of doing business, and trade logistics performance. The study finds that RCEP countries have improved significantly in trade facilitation measures, but they vary across the countries. For example, China should further enhance its performance in cross-border paperless trade, whilst the Association of Southeast Asian Nations countries should improve their performance in the documentary compliance of trade, the infrastructure of trade, and trade logistics performance.
Topic:: Economics, International Trade and Finance, Regional Cooperation, and Regionalism
Political Geography:: Asia and ASEAN

159. Opportunities and Challenges for ASEAN and East Asia from the Regional Comprehensive Economic Partnership on E-Commerce

Author:: Jane Kelsey
Publication Date:: 09-2022
Content Type:: Working Paper
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: The Regional Comprehensive Economic Partnership (RCEP) is a microcosm of the current tensions in negotiations on digital trade involving parties that have divergent positions on the digital economy, data, and regulation, including within the Association of Southeast Asian Nations (ASEAN) itself. It adopts a prudent approach that recognises the state parties need flexibility and policy space at the national and regional levels to develop of policy and regulation in the rapidly changing digital ecosystem and seeks to advance their collective interests through dialogue and cooperation. This paper contrasts that approach with the disciplinary nature of binding legal obligations that are enforceable by other states and their investors, as in the Trans-Pacific Partnership Agreement and similar recent treaties. The analysis of key differences focuses on matters of particular importance to ASEAN, such as local content and government procurement, data rules and flexibilities, financial data, source codes, and transparency. RCEP’s cautious approach enables ASEAN members to deepen their national and regional understanding of the opportunities and challenges these agreements present, whilst developing and implementing their own digital development strategies. Yet those good efforts may be undermined through the binding and enforceable trade in services rules.
Topic:: Economics, Regional Cooperation, Digital Economy, and Economic Cooperation
Political Geography:: Asia and ASEAN

160. Traditional Services Trade in the Regional Comprehensive Economic Partnership

Author:: Zhang Yan and Shandre Mugan Thangavelu
Publication Date:: 09-2022
Content Type:: Working Paper
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: Traditional services trade (TST), including tourism and transport services, is the basic and key component of services trade in the Regional Comprehensive Economic Partnership (RCEP). The implementation of RCEP will provide a platform for further liberalisation in TST, thus effectively promoting the growth of the whole service trade and the development of the travel and transportation industry. In this paper we will first show the trade pattern of TST in RCEP. Then, the commitments by each RCEP member will be thoroughly analysed, and the Hoekman index will be constructed to measure the liberalisation levels for the RCEP members. In the last section, we outline some impacts of the COVID-19 pandemic on TST and propose policy implications for RCEP in the post pandemic era.
Topic:: Economics, Tourism, Services, and Transportation
Political Geography:: Asia and ASEAN

161. The Investment Chapter in the Regional Comprehensive Economic Partnership: Enhanced Rules without Enforcement Mechanism

Author:: Henry Gao
Publication Date:: 09-2022
Content Type:: Working Paper
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: This paper examines the legal rules in the investment chapter in the Regional Comprehensive Economic Partnership (RCEP). It starts with an overview and summary of the main provisions in the chapter, followed by an assessment of the rules by comparing established free trade agreements (FTAs), especially the Comprehensive and Progressive Trans-Pacific Partnership. In particular, it notes that the chapter, whilst largely following the established approaches to investment in other FTAs, also includes important twists to the common rules to favour the host states. The last part discusses the conspicuous absence of an investor–state dispute settlement mechanism, its pros and cons, and wider implications on regional integration, then concludes with some thoughts on future developments.
Topic:: Economics, Regional Cooperation, Economic Cooperation, and Strategic Interests
Political Geography:: Asia and ASEAN

162. The Regional Comprehensive Economic Partnership Agreement and Europe: Impact and Implications

Author:: Haans Gunther Hilpert
Publication Date:: 08-2022
Content Type:: Working Paper
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: In the first 2 decades of the millennium, European Union (EU) trade policy underwent historic changes, amongst them an explicit pivot to Asia. Along with continued firm support of the rules-based World Trade Organization (WTO)-centred multilateral trading system, important new directions in the EU’s trade policy included a turn to competitive bilateralism, a strong focus on values, an ambition to protect and to promote European trade standards as well as the politicisation of trade policy. Asia’s outwards looking economic growth, the increasing trade interdependence in Asia as well as the various bilateral and multilateral trade agreements in the region, notably amongst them the Regional Comprehensive Economic Partnership (RCEP), attracted the EU’s attention, and have helped cause and drive these changes. There was no particular Asian influence on the EU’s own regionalisation, however. Meanwhile, trade and investment relations between Europe and Asia have intensified greatly over this period. But the EU has been slow and late to formulate a comprehensive strategy for the Indo-Pacific region. In spite of some notable successes, the EU’s trade policy remains fragmented with differentiated approaches for each trading partner. Opinions on the RCEP’s relevance and importance for Europe are divided. RCEP sceptics point to the overall shallow nature of the agreement. RCEP optimists emphasise the future potential of trade and investment integration within the newly established RCEP economic area and warn of the discriminatory effects for Europe’s economy and businesses. So, Europe’s business will have to invest in the new RCEP free trade zone to overcome trade diversion risks and to benefit from the RCEP market integration. More worrying from Europe’s perspective is RCEP’s potentially negative policy impacts: a relative loss in the EU’s trading power, the risk of Europe being sidelined in the make-up of future trade rules, and RCEP’s future impact on rules based multilateralism and the WTO. The EU has various trade policy options with regard to the Indo-Pacific trade area and RCEP in particular. The most promising options include the conclusion of free trade agreements with as many RCEP member countries as possible, with the Association of Southeast Asian Nations as a group (as a region-to-region agreement), with other trading partners (from the Indo-Pacific or from other world regions), or with the Comprehensive and Progressive Agreement for Transpacific Partnership area.
Topic:: Diplomacy, Economics, Regional Cooperation, and Economic Cooperation
Political Geography:: Asia and ASEAN

163. The Story of RCEP: History, Negotiations, Structure, and Future Directions

Author:: Aladdin D. Rillo, Anna Maria Rosario D. Robeniol, and Salvador Buban
Publication Date:: 08-2022
Content Type:: Working Paper
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: This paper is about the story of the Regional Comprehensive Economic Partnership (RCEP), including the history, dynamics of negotiations, and structure of this multilateral framework. Issues related to ASEAN centrality, sensitivities of negotiations, and other challenges are also highlighted and analysed. Nearly a decade in the making, RCEP represents a significant achievement for the region. As an ASEAN-led process, RCEP supports not only the region’s market integration but as well as ASEAN’s economic relations with the rest of the world, particularly with the 5 RCEP FTA Partners. Beyond the impact of RCEP in supporting the multilateral trading system, it is also intended to address the current challenges in the region, including the COVID-19 pandemic crisis. Thus, the narrative of RCEP provides a comprehensive overview of, and considers the potential implications for, trade in the region; for economic integration, and for the future of trade policy.
Topic:: Diplomacy, Economics, Regional Cooperation, Regionalism, and Economic Cooperation
Political Geography:: Asia and ASEAN

164. FDI Spillover Effects: Evidence from the Philippines

Author:: Rafaelita Aldaba and Angel Derrickvhel Quejada
Publication Date:: 08-2022
Content Type:: Working Paper
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: Using firm-level data in manufacturing, this chapter examines the impact of foreign direct investment (FDI) spillover effects on domestic firm performance. Through knowledge spillovers, FDI inflows affect the performance of domestic firms. Overall, there is some evidence to show that horizontal and forward spillovers from FDI have a significant positive impact on the performance of domestic firms. However, in terms of backward spillovers, the impact of FDI on the performance of domestic firms is negative and significant. The diffusion of backward spillover effects to domestic firms has remained limited due to the weak competitiveness of domestic firms and their inability to absorb the technology or knowledge being transferred. To strengthen the absorptive capacity and productivity of domestic firms, the chapter suggests a more comprehensive approach that would combine industrial policy to improve and develop domestic parts and supplier firms with measures to create an environment conducive to the creation and expansion of FDI backward spillovers. These include upgrading industry participation towards higher segments of global value chains, innovation, human resource development, upskilling and reskilling the workforce, and liberalising ecozone regulations affecting the transactions between multinational corporations and companies outside the economic zones.
Topic:: Economics, International Trade and Finance, Foreign Direct Investment, and Investment
Political Geography:: Philippines and Oceania

165. Prediction Errors of Macroeconomic Indicators and Economic Shocks for ASEAN Member States, 1990‒2021

Author:: Masahito Ambashi, Fusanori Iwasaki, and Keita Oikawa
Publication Date:: 05-2022
Content Type:: Working Paper
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: In this study, economic shocks on six selected Association of Southeast Asian Nations (ASEAN) Member States (i.e. Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Viet Nam) are analysed in three dimensions: global, domestic, and uncertainty. Annual actual and prediction values from 1990–2021 macroeconomic indicators – from international organisations such as the Asian Development Bank – were collected, and macroeconomic shocks were calculated based on prediction errors (i.e. actual values minus prediction values). The first finding is that if prediction errors of the real gross domestic product (GDP) growth rates are negative, on average, the countries were significantly subjected to negative economic shocks that were not anticipated. Second, according to a correlation analysis of the actual values and prediction errors of real GDP growth rates, economic fluctuations and shocks are highly synchronised within the countries as well as with the world, as previous literature has indicated. Finally, by conducting regression analyses regarding the prediction error of real GDP growth rates separately for each country, (i) variations of the global real GDP growth rate are positively associated with countries’ economic shocks; (ii) the previous estimates have different quantitative significance amongst the countries; (iii) residual variations approximate country-specific, domestic shocks; and (iv) global and country-level uncertainty indices are correlated with negative economic shocks in some countries. Based on this dataset, the effect of the COVID-19 pandemic is also reviewed, and economic and historical backgrounds are examined that caused past economic shocks to these ASEAN Member States.
Topic:: Economics, Regional Cooperation, Macroeconomics, and Economic Cooperation
Political Geography:: Asia and ASEAN

166. Entry Mode Choice and Performance of Foreign Direct Investment Firms in Emerging Economies: Micro-evidence from Viet Nam

Author:: Linh Bui, Huyen Hoang, and Hang Bui
Publication Date:: 03-2022
Content Type:: Working Paper
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: Does the right entry mode choice help foreign direct investment (FDI) firms to perform efficiently in emerging economies? This study attempts to answer this question by examining the impact of the entry mode choice made by FDI firms on their post-entry performance in emerging markets. Using a dataset derived from specific firms for the period 2002–2016, this study accounts for the selection biases and inherent differences of FDI firms that affect their selection of entry strategies. The study found that, with regard to the manufacturing sector, the ownership type with a wholly owned subsidiary (WOS) had negative impacts on either the technical efficiency or the total factor productivity (TFP) of firms. Conversely, regarding all sectors in the economy, the WOS is likely to have a positive role on technical efficiency and TFP. It is also interesting to see that for firms with an equity joint venture (EJV) type, the higher proportion of capital contribution from domestic firms might lead to lower technical efficiency and TFP. It implies that the higher degree of management and control by the domestic firms compared with foreign firms would have negative impacts on the EJV firms’ performance.
Topic:: Economics, Foreign Aid, Foreign Direct Investment, and Emerging Powers
Political Geography:: Asia and Vietnam

167. Projecting Infrastructure Needs and the Financing Mechanism: A Review of Estimations by ADB, McKinsey, and the OECD

Author:: Fauziah Zen and Michael Regan
Publication Date:: 03-2022
Content Type:: Working Paper
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: How much does a country, a region, and the world need to spend on infrastructure development to fulfil demand? This question has been asked frequently because governments try to see it as a reference for budget allocation and evaluation of development progress. Since infrastructure consists of a wide range of types, qualities, and sizes, it is difficult to come up with a number that represents these variants. Several widely cited attempts have been made to provide estimations of infrastructure needs. This paper aims to assess the features, scope, methods, and suggested financing mechanism of the projections made by the Asian Development Bank (2017), the Organisation for Economic Co-operation and Development (2017), and the McKinsey Global Institute (2016). It is not meant to focus on the limitations of these projections, but to understand the process used to put these estimates together and the extent to which they provide comparative information.
Topic:: Development, Economics, Emerging Markets, and Infrastructure
Political Geography:: Asia and ASEAN

168. Economic Integration of Venezuelan Immigrants in Colombia: A Policy Roadmap

Publication Date:: 12-2022
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: This paper studies the formal labor market integration and firm creation of Venezuelan immigrants and refugees in Colombia between late 2019 to late 2021. It applies a novel framework to identify segments of the Colombian economy where Venezuelan immigrants and refugees are lagging behind. When it comes to labor market dynamics, we identify professional services as one of the sectors where Venezuelan workers are not integrating fast enough consistently across different parts of the country, hinting that the recognition of professional credentials might be an important bottleneck to effective integration. As for entrepreneurship, we find that sectors where there are fewer firm creations by foreigners as compared to locals include commerce and service industries all across the nation. This paper is accompanied by a set of downloadable files which list sectors of the economy in each geographic department with poor integration of Venezuelan immigrants both for labor markets and firm creation. These lists are meant to be used by national and local policymakers for further investigation of possible market failures or distortions hindering immigrant integration, given our results.
Topic:: Economics, Labor Issues, Immigration, and Economic Integration
Political Geography:: Colombia, South America, and Venezuela

169. Do Cash Transfers Deter Migration?

Author:: Michael A. Clemens
Publication Date:: 10-2022
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: Conditional Cash Transfers are increasingly used by development aid agencies to reduce the incentives for migration from low-income countries. The evidence to date suggests that such transfers typically increase the rate of migration when they are conditional on investment, such as investment in education. They do this primarily by facilitating acquisition of human capital and by lowering capital constraints—increasing both migration aspirations and the means to achieve them. But with certain design features, particular transfer programs have reduced the incentive to migrate. Broadly speaking, migration can be deterred by transfer programs that are conditional on presence in the origin country—provided that the condition is strict, targeted, and lengthy.
Topic:: Economics, Migration, Finance, and Investment
Political Geography:: Global Focus

170. Healthier Firms for a Stronger Recovery: Policies to Support Business and Jobs in Latin America and the Caribbean

Author:: Andrew Powell and Liliana Rojas-Suarez
Publication Date:: 08-2022
Content Type:: Special Report
Institution:: Center for Global Development
Abstract:: This report—the product of a joint working group convened by the Center for Global Development and the Inter-American Development Bank—focuses on firms and labor markets in Latin America and the Caribbean during the COVID-19 crisis and the highly uncertain recovery phase now underway. The ongoing Russian war in Ukraine, volatility in international financial markets, and fears of global stagflation (low growth and high inflation) combine with the impacts of the pandemic to make the economic environment particularly challenging. Through a balance sheet analysis, the report describes how larger firms have navigated the crisis by cutting back on variable costs and investment. It also focuses on small and medium-size enterprises (SMEs), which appear to have suffered more in terms of closures and restrictions on credit access. The impacts on labor markets were unprecedented, with steep falls in employment and participation rates. A key question is whether the reallocation of resources, favoring firms in sectors that were hit less hard and able to take advantage of digital technologies, will persist. Key dangers are that informality is higher than ever, that productive resources remain trapped in small and less productive or ultimately unviable enterprises, and that firms are not rebuilding their capital stocks quickly. Drawing on an analysis of firms and labor markets, the report provides a set of recommendations for policymakers in the region and suggestions for international financial institutions to assist productive firms to invest, support the growth of new firms, and enhance labor market performance.
Topic:: Development, Economics, Finance, and Banking
Political Geography:: South America, Latin America, Caribbean, and North America

171. Beyond India’s Lockdown: PMGKY Benefits During the COVID-19 Crisis and the State of Digital Payments

Author:: Alan Gelb, Anurodh Giri, Anit Mukherjee, Ritesh Rautela, Mitul Thapliyal, and Brian Webster
Publication Date:: 04-2022
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: India imposed a lock-down in response to the COVID-19 pandemic in March 2020 and began a gradual re-opening in June. A telephonic survey in April examined the early effectiveness of information and the massive PMGKY social protection program (Policy Paper 217). This paper analyzes a second-round survey, conducted six months later. Logistical and information constraints had relaxed, and incomes and jobs had begun to stabilize for some. There were not strong indications of differential access to benefits by income or location, but constraints to providing public employment had tightened in the face of increased demand, resulting in greater job rationing. Men made more use of digital channels, with a clear smartphone ownership hierarchy between men and women; this divide carried over into the growing autonomous use of digital payments which is conditioned on access to smartphones. Survey results confirm strong local agglomeration effects in digital payments, mirroring the general pattern with higher use in states hosting India’s major technology hubs. At the same time, trust-based concerns reduced the use of assisted digital cash-outs through agents.
Topic:: Economics, Pandemic, COVID-19, and Digitalization
Political Geography:: India and Asia

172. Domestic Revenue Mobilization and Debt Relief: The Lack of Any Link

Author:: Mark Plant and Nancy Lee
Publication Date:: 02-2022
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: As the global financial community considers how to extend debt relief accompanied by IMF adjustment programs to vulnerable low-income countries, the issue of policy conditions for fiscal adjustment will inevitably arise. This paper considers the effectiveness of conditions related to domestic revenue mobilization (DRM) in the last systematic round of debt relief in the early 2000s Highly Indebted Poor Countries Initiative and the Multilateral Debt Relief Initiative (HIPC/MDRI). We find that debt relief had no impact on low-income countries’ DRM. Countries benefitting from debt relief had roughly the same DRM as those that did not. And DRM grew only slightly over time for both sets of countries. In the months to come there will be pressure to use debt restructuring and leverage to accelerate fiscal reforms and boost domestic revenue mobilization so that LICs can be seen to be contributing “their fair share” to economic recovery and transformation. Experience with the HIPC/MDRI tells us that we must be realistic in our expectations: external forces have limited impact unless combined with strong internal will and implementation capacity.
Topic:: Debt, Economics, IMF, and Credit
Political Geography:: Global Focus

173. Embedding Human Rights in European and US China Policy

Author:: Malin Oud
Publication Date:: 05-2022
Content Type:: Working Paper
Institution:: German Marshall Fund of the United States (GMFUS)
Abstract:: Europe and the United States share an interest in promoting human rights in China but often struggle to affect change in this regard. Because of ineffective approaches and low political commitment, human rights are a marginalized issue in transatlantic China policy and an afterthought to commercial interests. European and US policymakers have attempted to compartmentalize their approach to China, keeping human rights separate from commercial and other interests. This does little to advance human rights, and it only seems to encourage more assertive and coercive behavior by China. During the last few years, the Western assumption that trade and foreign capital would transform China into a more open and democratic society has been replaced by a disillusioned realization that its rise as a superpower is reshaping the international order. Under President Xi Jinping, China has evolved from its previous position as rule-taker and status quo-keeper at the UN to become an assertive rule-maker and international norm entrepreneur. Its vulnerability to external pressure has declined while its power to exert pressure and economic coercion on others has increased. China no longer presents its political and economic model merely as different from but as superior to that of the liberal democracies in the West. For several years now, European and US policymakers have declared an “end of naivety” in relation to China. After years of debating how to make the EU more resilient and robust, Russia’s invasion of Ukraine has “given birth to geopolitical Europe,” in the words of its chief diplomat, Josep Borrell. It remains to be seen whether this moment of clarity will translate into a more principled defense of human rights and investment in democratic resilience. For this to happen, there needs to be a broader reckoning with how Western countries for decades mishandled the authoritarian challenge to the international order, often because they were pursuing stronger economic ties with the same governments they now see as systemic rivals.
Topic:: Foreign Policy, Economics, Human Rights, Business, and Trade
Political Geography:: China, Asia, North America, and United States of America

174. How Its War on Ukraine Killed Russia’s Hydrogen Ambitions

Author:: Aliaksei Patonia
Publication Date:: 10-2022
Content Type:: Working Paper
Institution:: German Marshall Fund of the United States (GMFUS)
Abstract:: Hydrogen looks like the fuel that can facilitate global decarbonization because it can be used in diverse applications—such as heat and power generation, transport, and manufacturing—without any carbon emissions. But, while many countries (including in Europe) view renewables-based, zero-carbon hydrogen as the ultimate goal in transitioning to a hydrogen economy, today most hydrogen is produced from natural gas. Thus, it is unlikely that the hydrogen transition will happen without relying on this fossil fuel. Russia is the country with the world’s largest natural gas deposits, and it has been exploring ways to adjust its energy sector to the needs of the emerging global hydrogen one. In 2021, it announced the goal of capturing up to 20 percent of the world’s hydrogen market by 2030. This came after all the major importers of Russia’s energy products had developed their hydrogen strategies, and its key energy companies started to explore new opportunities. Having signed memoranda of understanding with some of the world’s major energy companies to jointly develop Russia’s hydrogen export potential, they focused on Europe as the key destination. Some of Asia’s hydrogen pioneers and most promising future importers, such as Japan and South Korea, were also included among Russia’s potential partners. These steps could have resulted in long-lasting and fruitful collaborations generating large profits for Russia, but its ambitions have been jeopardized by its invasion of Ukraine in February 2022. This has led to Russia losing key political and economic partners in Europe and also in Asia, which—in combination with being the target the toughest sanctions in its history—is likely to cripple its nascent hydrogen sector. Having planned to convert its natural-gas pipelines to transport hydrogen to future buyers in Europe, Russia is unlikely to be able to use this infrastructure for this purpose anymore. The EU will be an unlikely buyer of Russian hydrogen for the foreseeable future. Turning to Japan and South Korea would not be a success either, since they have joined the sanctions regime against Russia and, like the EU, have been officially labeled as unfriendly by Moscow. This will make the transfer of the technologies critical for the production of low- and zero-carbon hydrogen from the world leaders to a technologically backward Russia very problematic. Europe will also feel long-lasting repercussions of Russia’s war in Ukraine in the energy and hydrogen sectors. With no steady supplies of cheap Russian gas or hydrogen, Europe’s decarbonization efforts and building up its hydrogen industry will be inhibited and require a lot more effort and money. Russia will have to seek alternative markets for its energy commodities and it will seek deals with China, the only country whose energy consumption can rival that of Europe. But, as one of the world’s largest producers of electrolysers and of conventionally manufactured hydrogen, China probably will not need to import Russia’s hydrogen to build up its own hydrogen sector. Possessing critical technologies of its own, it will instead increase imports of Russian primary energy sources (such as natural gas) that it can use for producing hydrogen. The influx of huge volumes of cheap Russian feedstock will speed up China’s transformation from a country with a nascent hydrogen sector into a dominant player on the global hydrogen market. If the EU or the United States—the only two actors comparable to China in economic, technological, and geopolitical strength—do not develop similarly strong hydrogen sectors, Beijing could end up dominating the global energy landscape. To avoid the geopolitical consequences of this and for global balance to be maintained, further cooperation between the EU and the United States will be needed to speed up the creation of strong hydrogen sectors for both.
Topic:: Foreign Policy, Economics, Business, Trade, Hydrogen, and Russia-Ukraine War
Political Geography:: Russia, Europe, and Ukraine

175. Russian Strategic Interest in Arctic Heats Up as Ice Melts

Author:: Robert Jr. McVey
Publication Date:: 09-2022
Content Type:: Working Paper
Institution:: LSE IDEAS
Abstract:: In this latest Strategic Update, Col Robert A. McVey Jr addresses why Russia has dramatically changed its Arctic strategy since 2007, committing significant military and fiscal resources to the region. McVey additionally describes the diplomatic, information, legal, and military tools of national power that Russia is craftily employing to pursue, promote, and protect its growing strategic economic interests in the Arctic, finding that the possibility of conflict between great powers remains ever present, regardless of the potential for cooperation or competition. Given that Russia’s Arctic strategy is primarily driven by economic interests, this paper makes five key recommendations for U.S. policymakers and military leaders, focusing on security cooperation programmes with NATO allies and the Arctic states.
Topic:: Security, NATO, Economics, and Strategic Interests
Political Geography:: Russia and Arctic

176. ASEAN’s Cambodian Stress Test

Author:: Tan Sri Munir Majid
Publication Date:: 03-2022
Content Type:: Working Paper
Institution:: LSE IDEAS
Abstract:: The Association of Southeast Asian Nations (ASEAN), has faced an unprecedented challenge since the military junta seized power in a coup in Myanmar in 2020. Departing from its initial premise of ‘non-interference’ in the domestic policies of its member states, the regional group decided to ban Myanmar’s military representatives from meetings and summits. The five-point plan for consensus was supported by most members, however, Cambodia’s tenure as Chair of this organisation has brought the plan’s efficacy and longevity into question. At a time when Europe stands united against Russian actions in Ukraine, with a coherent and consistent response from states across the continent, can ASEAN do the same as it seeks to find a peaceful solution in the case of Myanmar?
Topic:: Foreign Policy, Economics, ASEAN, Regional Politics, and Russia-Ukraine War
Political Geography:: Cambodia and Southeast Asia

177. The Indo-Pacific Economic Framework and Digital Trade in Southeast Asia

Author:: Andreyka Natalegawa and Gregory B. Poling
Publication Date:: 05-2022
Content Type:: Special Report
Institution:: Center for Strategic and International Studies
Abstract:: In October 2021, the Biden administration announced the development of an Indo-Pacific Economic Framework (IPEF) with partner nations to “define our shared objectives around trade facilitation, standards for the digital economy and technology, supply chain resiliency, decarbonization and clean energy, infrastructure, worker standards, and other areas of shared interest.” Details on the framework are still being worked out, but it now seems that those six areas of focus have been distilled into four negotiating “pillars.” Deputy U.S. Trade Representative Sarah Bianchi said in early February that these would include “fair and resilient trade, supply chain resilience, infrastructure and decarbonization, and tax and anticorruption.” The Office of the U.S. Trade Representative (USTR) will likely lead negotiations on the first, while it appears that the Commerce Department will take the lead on the other three. The details of each pillar will be worked out in the months ahead, but the Biden administration is certain to face challenges and trade-offs across each, given the diversity of economies and political constraints across the region. USTR has said the trade pillar will be “high-ambition” and include binding commitments. But this will be complicated by the fact that the administration plans to roll out the IPEF through executive action rather than as a traditional trade deal requiring congressional approval. This pathway will help the framework sidestep political obstacles that agreements like the Trans-Pacific Partnership faced before Congress, but it also means that the administration cannot offer increased market access or any other concessions that would require changes to U.S. law. Moreover, moving forward with the IPEF through executive action has led to concerns among partners that the framework could be vulnerable to U.S. domestic politics or that a future administration may well roll back or abandon the framework. Given these self-imposed constraints, the administration will face headwinds trying to convince countries to sign on to high-standard provisions on digital trade, labor, and environmental standards that might run counter to their perceived short-term political or economic interests. One possible solution would have been to make the involvement in the other three pillars, where there are likely to be more tangible benefits for other countries, contingent on an agreement in the trade pillar. But that would run counter to the desire to get as many countries on board as possible. So, the administration has instead indicated that countries will be invited to engage in each pillar a la carte. And while like-mindedness in and of itself does not immediately guarantee their support for the IPEF, the likely result is that only Japan, Australia, New Zealand, Singapore, and perhaps South Korea—the most developed economies which already share U.S. standards on digital trade, environment, and labor—will engage with USTR on the trade pillar. But a wider array of economies will likely join the talks with the Commerce Department on the other three.
Topic:: Economics, International Trade and Finance, Digital Economy, and Economic Cooperation
Political Geography:: Asia, Southeast Asia, and Indo-Pacific

178. Russia Futures: Three Trajectories

Author:: Cyrus Newlin and Andrew Lohsen
Publication Date:: 05-2022
Content Type:: Special Report
Institution:: Center for Strategic and International Studies
Abstract:: Beginning in 2018, the Europe, Russia, and Eurasia Program at CSIS initiated a research project to explore scenarios related to Russia’s future development and to consider the transatlantic implications of each scenario. The project, which was generously funded by the Norwegian Foreign Ministry, was intended to provide policymakers with an understanding of how Russia’s domestic political situation, economic outlook, military activities, and foreign policy might evolve in response to modern-day challenges including climate change, growing competition in the Arctic, and the fraught relationship between China and the collective West. Based on original research and workshops involving U.S., Norwegian, and European experts, CSIS identified three potential scenarios for Russia’s future development. The first scenario envisioned a path of continuity, in which Russian leaders strove to maintain the status quo. The second scenario foresaw a trend of risk reduction in the Kremlin’s decisionmaking that led to a partial normalization of relations with the West. The third scenario considered a darker future, in which Russian leaders accepted a higher degree of risk to manage mounting problems at home and abroad, leading to sustained confrontation with the West and the further detachment of the Russian government from its people. These scenarios were being prepared for publication when Russian president Vladimir Putin launched a renewed invasion of Ukraine on February 24 and ushered in a period of deep uncertainty for European and global affairs. Almost immediately, Russia’s act of aggression turned the country into a global pariah, triggering international sanctions far beyond the Kremlin’s expectations and consolidating transatlantic unity to an extent that was difficult to imagine in the tense months immediately preceding the invasion. As orthodoxies have been challenged and expectations reconsidered, contingencies that were thought impossible—from embargoes of Russian hydrocarbons to the potential use of nuclear weapons by the Kremlin—are starting to feature into conversations among policymakers and analysts.
Topic:: Defense Policy, Development, Economics, and Military Strategy
Political Geography:: Russia and Europe

179. Strategic Competition in the Financial Gray Zone

Author:: Heather A Conley, James Andrew Lewis, Eugenia Lostri, and Donatienne Ruy
Publication Date:: 04-2022
Content Type:: Special Report
Institution:: Center for Strategic and International Studies
Abstract:: Over the past 10 years, the U.S. government has slowly reoriented its foreign and security policy from the fight against global terrorism toward strategic competition with Russia and China. This reorientation has been accompanied by a new examination of how strategic competition will impact the integrity and future stability of the U.S. economy and financial system. One of the most important elements of strategic competition is sub-threshold warfare (also called asymmetric, hybrid, or gray zone warfare), wherein strategic competitors seek to shape the geostrategic environment in their favor, from information operations to economic warfare—which includes such tools as illicit finance and strategic corruption. Strategic competitors present a clear economic and financial threat to the United States when they operate in the emerging financial gray zone, in which malign actors can take advantage of the U.S. financial system to further their aims and disarm the country internally. The U.S. government, along with its allies, has only begun to acknowledge the sweeping nature of the financial gray zone and to reposition itself to compete within it. Because adversaries exploit the seams between the internal and external policies and authorities, Washington must have greater insights into a complex operating system and better integrate data across the many relevant agencies—in a way, connecting the financial dots. As it develops this comprehensive picture, the U.S. government should develop stronger defensive and offensive policy tools to counter this emerging threat.
Topic:: Economics, Finance, Strategic Competition, and Rivalry
Political Geography:: China, Asia, North America, and United States of America

180. Regional Perspectives on the Indo-Pacific Economic Framework

Author:: Matthew Goodman and Aidan Arasasingham
Publication Date:: 04-2022
Content Type:: Policy Brief
Institution:: Center for Strategic and International Studies
Abstract:: The proposed Indo-Pacific Economic Framework (IPEF) is the Biden administration’s answer to questions about the United States’ economic commitment to the vital Indo-Pacific region. For this initiative to succeed, it must address concerns among regional partners about the framework’s form, function, benefits, inclusivity, and durability. Based on conversations with representatives from over a dozen regional governments, this brief summarizes Indo-Pacific perspectives on the IPEF.
Topic:: Economics, International Trade and Finance, Regional Cooperation, and Regionalism
Political Geography:: North America, United States of America, and Indo-Pacific

181. Beyond 2025: The Future of the African Growth and Opportunity Act

Author:: Daniel F. Runde and Sundar R. Ramanujam
Publication Date:: 03-2022
Content Type:: Policy Brief
Institution:: Center for Strategic and International Studies
Abstract:: Over the past two decades, the United States has provided assistance and support for sub-Saharan Africa’s efforts to transform its economic and trade relationships, centered around the African Growth and Opportunity Act (AGOA). First enacted into law on May 18, 2000, AGOA was designed to significantly enhance designated sub-Saharan African countries’ market access to the United States by providing duty-free treatment for specific import categories. The legislation’s primary goal was to promote economic growth through good governance and free markets. To qualify and remain eligible for AGOA, countries were expected to demonstrate progress toward market liberalization and to improve the rule of law, human rights protections, and core labor standards. More than 20 years later, AGOA continues to provide preferential treatment to 44 countries in the region, spanning over 6,500 tariff lines. Since May 2000, AGOA has been amended four times, mostly to clarify preferential treatment terms, technical standards, and sunset deadlines. The act was initially designed to be valid for eight years, expiring at the end of September 2007. In July 2004, however, President George W. Bush signed the AGOA Acceleration Act, extending it to 2015. Toward the end of his second term, in June 2015 President Barack Obama extended its validity by signing the Trade Preferences Extension Act, under which AGOA is set to expire in 2025. The global political and economic landscape has changed profoundly since AGOA was enacted in 2000, even before the Covid-19 pandemic created new disruptions and accelerated several ongoing changes. The mobile telephony revolution has created new opportunities for millions to participate in the digital sphere, use mobile banking and payments systems, and receive commercial, educational, and medical services via the internet. Even as the sub-Saharan African region’s middle class continues to grow, it is also set to experience a youth population boom in the next three decades—which, under the right conditions, could pay a demographic dividend and avert a social crisis. Meanwhile, the United States has also entered an era of great-power competition with China. With China’s influence in sub-Saharan Africa rising significantly, this competition is also playing out through the region’s political and economic institutions. Considering these opportunities and challenges, leaders in Washington (and their constituents across the United States) ought to look at Africa as a prospect for deepening commercial partnerships, not as a continent that needs to be “saved” through foreign assistance. Accordingly, the United States can consider one of the three following scenarios in response to AGOA’s current expiration timeline
Topic:: Development, Economics, International Cooperation, and International Trade and Finance
Political Geography:: Africa

182. The Kremlin Playbook 3: Keeping the Faith

Author:: Heather A Conley and Donatienne Ruy
Publication Date:: 02-2022
Content Type:: Special Report
Institution:: Center for Strategic and International Studies
Abstract:: For six years, the Kremlin Playbook series has studied Russia’s malign influence efforts in Europe, primarily through the economic lens. This research showed the Kremlin has developed a pattern of malign economic influence in Europe through the cultivation of “an opaque network of patronage across the region that it uses to influence and direct decision-making.” The aim is to weaken democratic systems from within, using existing and creating new societal divides. But what if Russia, for its own malign purposes, were to seek to influence religious or traditional views? The Kremlin Playbook 3: Keeping the Faith aims to protect these beliefs by exposing how Russian malign influence works in this particularly challenging and very personal dimension—a new strategic seam—to ensure citizens do not unwittingly become part of an influence operation. The instrumentalization of values, traditions, and religious beliefs is a relatively recent and particularly pernicious front of the Kremlin’s influence efforts in Europe and elsewhere. This study investigates these dynamics in four case study countries: Bosnia and Herzegovina, France, Georgia, and Greece. This report explores how the United States and its European allies can protect the religious beliefs and values of their citizens from malign influence at a time when transatlantic societies are grappling with the speed of societal change. Societal anxiety and fear related to these rapid economic, demographic, and generational shifts—and the subsequent politics and political figures that seek to capitalize on them—have fueled societal divisions around the so-called cultural wars in Western societies. Through two main channels, the Orthodox world and the traditional values ecosystem, the Kremlin has taken advantage of these fears to accentuate societal wedges in Europe and Eurasia.
Topic:: Economics, Hegemony, Strategic Interests, and Influence
Political Geography:: Russia and Europe

183. Trump ended WTO dispute settlement. Trade remedies are needed to fix it.

Author:: Chad P. Bown
Publication Date:: 01-2022
Content Type:: Working Paper
Institution:: Peterson Institute for International Economics
Abstract:: Unhappy with the rulings of the WTO dispute settlement system, which disproportionately targeted US use of trade remedies, the United States ended the entire system in 2019. There are multiple hurdles to agreeing to new terms of trade remedy use and thus potentially restoring some form of binding dispute settlement. First, a change would affect access to policy flexibility by the now large number of users of trade remedies. Second, although China’s exports are the overwhelming target of trade remedies, exporters in other countries increasingly find themselves caught up in trade remedy actions linked to China. Third, critical differences posed by China’s economic model may call for new rules for trade remedies, but no consensus on those rules has emerged. Even some of the most promising reforms have practical limitations, create additional challenges, or may be politically unviable.
Topic:: Economics, Trade, Donald Trump, and WTO
Political Geography:: China and United States of America

184. Competing Economic Visions in the Gulf

Author:: Robert Mogielnicki
Publication Date:: 01-2022
Content Type:: Journal Article
Journal:: Cairo Review of Global Affairs
Institution:: School of Global Affairs and Public Policy, American University in Cairo
Abstract:: Economic visions offer regional governments roadmaps for development, but they can also serve as a tool for measurement and—ultimately—accountability
Topic:: Development, Economics, Governance, and Accountability
Political Geography:: Gulf Nations

185. The international financial system after COVID-19

Author:: Maurice Obstfeld
Publication Date:: 02-2022
Content Type:: Working Paper
Institution:: Peterson Institute for International Economics
Abstract:: In March 2020, international markets seized up with a violence unequaled since the global financial crisis nearly a dozen years before. As economies around the world locked down in the face of the potentially deadly but completely novel SARS-CoV-2 virus, stock markets fell, firms and governments scrambled for cash, liquidity strains emerged even in the market for US Treasurys, and capital flows to emerging-market and developing economies (EMDEs) reversed violently. This paper reviews the evolution of global financial markets since the global financial crisis, changes in academic thinking about these markets’ domestic impacts, the strains seen during the COVID-19 crisis, and perils that may lie ahead. A key theme is that stability will be enhanced if the global community embraces reforms that elevate market resilience, rather than depending on skillful policymakers wielding aggressive but ad hoc policy interventions to ride to the rescue again.
Topic:: Economics, Markets, COVID-19, and Financial Systems
Political Geography:: Global Focus

186. Socioeconomic diversity of economics PhDs

Author:: Robert Schultz and Anna Stansbury
Publication Date:: 03-2022
Content Type:: Working Paper
Institution:: Peterson Institute for International Economics
Abstract:: It is well documented that women and racial and ethnic minorities are underrepresented in the economics profession, relative to both the general population and many other academic disciplines. Less is known about the socioeconomic diversity of the profession. In this paper, we use data from the National Science Foundation’s Survey of Earned Doctorates to examine the socioeconomic background of US economics PhD recipients as compared with US PhD recipients in other disciplines, proxying for socioeconomic background using PhD recipients’ parents’ educational attainment. We find that economics PhD recipients are substantially more likely to have highly educated parents, and less likely to have parents without a college degree, than PhD recipients in other disciplines. This is true both for US-born and non-US-born PhD recipients, but the gap between economics and other disciplines is starker for those born in the United States. The gap in socioeconomic diversity between economics and other PhD disciplines has increased over the last two decades.
Topic:: Economics, Women, Diversity, and Academia
Political Geography:: Global Focus

187. WTO 2025: Restoring binding dispute settlement

Author:: Alan Wm. Wolff
Publication Date:: 04-2022
Content Type:: Working Paper
Institution:: Peterson Institute for International Economics
Abstract:: Binding dispute settlement—the ability to obtain a final judgment of whether a member of the World Trade Organization (WTO) has acted inconsistently with its obligations—was the defining attribute of the WTO as created in 1995. Global commerce thrived on having the certainty provided by its taking place within this system. For well over a decade, the United States had complained that the dispute settlement system was undermining the trade remedies—antidumping, countervailing duties against subsidies, and safeguard actions against injurious imports—that were allowed under the WTO’s rules. When a populist US administration assumed office in 2017, it blocked appointments to the WTO’s Appellate Body. Today, the WTO dispute settlement system has become balkanized. The European Union and a number of other countries have banded together to put into place an alternative mechanism. Outside this system are the other two-thirds of the WTO members, including the United States. For most WTO members, no definitive result can be reached as to whether WTO obligations have been violated, as there is no assurance that WTO dispute settlement will be binding for them. This paper addresses how to reconstruct a system that the United States could join that would be broadly acceptable to others. It sets out a wide range of elements for negotiators to consider to rebuild the WTO dispute settlement system and make WTO agreements enforceable again.
Topic:: Economics, Trade, WTO, and Disputes
Political Geography:: Global Focus

188. WTO 2025: Enhancing global trade intelligence

Author:: Alan Wm. Wolff
Publication Date:: 04-2022
Content Type:: Working Paper
Institution:: Peterson Institute for International Economics
Abstract:: International trade flows based on information. Is the foreign market open? What are the conditions for entry? Are there customs duties to be paid and other regulations that need to be satisfied? Businesses thrive on getting as much certainty as they can find, and this requires reliable information. Is the competition subsidized? Are the competitors favored state-owned companies? During the pandemic, governments needed to know if food and medical supplies were going to be available from foreign sources and, most importantly, how available vaccines would be as most of the world’s countries could not produce any. Effective public policy cannot be made in the dark. The World Trade Organization, and the General Agreement on Tariffs and Trade before it, were founded with the idea of providing transparency. But more is needed to understand why trade is taking place, and even more important, when it is not, why not?
Topic:: Economics, Markets, Trade, and WTO
Political Geography:: Global Focus

189. WTO 2025: Constructing an executive branch

Author:: Alan Wm. Wolff
Publication Date:: 05-2022
Content Type:: Working Paper
Institution:: Peterson Institute for International Economics
Abstract:: The World Trade Organization (WTO) as an institution accords much less of a role to its chief officer and her staff, namely the WTO Director-General and the Secretariat, than do any of its sister international organizations—the World Bank, the International Monetary Fund, the Organization for Economic Cooperation and Development—to their chief officers and staff. The WTO Secretariat is much smaller than its peer international organizations and underfunded. In considering WTO reform, this deficiency needs to be rectified if the WTO’s performance is to live up to its Members’ needs.
Topic:: Economics, World Bank, IMF, WTO, and OECD
Political Geography:: Global Focus

190. Public responses to foreign protectionism: Evidence from the US-China trade war

Author:: David Steinberg and Yeling Tan
Publication Date:: 06-2022
Content Type:: Working Paper
Institution:: Peterson Institute for International Economics
Abstract:: America's recent turn toward protectionism has raised concerns about the future viability of the liberal international trading system. This study examines how and why public attitudes toward international trade change when one's country is targeted by protectionist measures from abroad. To address this question, the authors fielded three original survey experiments in the country most affected by US protectionism: China. First, they find consistent evidence that US protectionism reduces Chinese citizens' support for trade. This finding is replicated in parallel experiments on technology cooperation, and further validated outside of the China context with a survey experiment in Argentina. Second, they show that responses to US protectionism reflect both a "direct reciprocity" logic—citizens want to retaliate against the United States specifically—and a "generalized reciprocity" logic that reduces support for trade on a broader, systemic basis.
Topic:: Economics, Political Economy, Public Opinion, Trade, and Protectionism
Political Geography:: China, Asia, North America, and United States of America

191. Defying United Nations Sanctions: Three Reasons for African Engagement with North Korea

Author:: Tycho van der Hoog
Publication Date:: 06-2022
Content Type:: Working Paper
Institution:: Korea Economic Institute of America (KEI)
Abstract:: The United Nations (UN) sanctions against North Korea are weakened by structural evasion techniques and weak enforcement. The African continent is a crucial node in the global illicit networks of North Korea. This paper examines three motives for African states to cooperate with North Korea, with a particular focus on the context of southern Africa: historical affinity (reciprocity), the practical issue of maintenance dependency (necessity), and the presence of weak enforcement regimes (opportunity). Based on a deep reading of UN Panel of Experts reports, academic literature and policy papers, novel archival material, and an interview with a defected North Korean diplomat, this paper argues that solutions to strengthen the sanctions regime can be successful only if they are grounded in African initiatives.
Topic:: Security, Economics, United Nations, and Sanctions
Political Geography:: Africa, Asia, and North Korea

192. South Korea's Critical Moment in Digital Currency Policymaking: Between Regulating Cryptocurrencies and Launching a Central Bank Digital Currency (CBDC)

Author:: June Park
Publication Date:: 03-2022
Content Type:: Working Paper
Institution:: Korea Economic Institute of America (KEI)
Abstract:: Why is South Korea pilot-testing its Central Bank Digital Currency (CBDC), and what made it shift from non-issuance to consideration? This paper investigates the Bank of Korea (BOK)’s CBDC-related developments amid the geopolitical contest between the U.S. and China. It examines the Moon Jae-in administration’s defiance of decentralized finance (DeFi) and the BOK’s sudden shift from non-issuance to potential issuance, which led to expedited research, development, and pilot-testing of CBDCs. As in the case of the digital yuan, the BOK envisions a hybrid architecture for the digital won, wherein central banks and associated partner institutions are CBDC distributors, though they are distinguished by placing the digital won on distributed ledger technology rather than by centrally controlling it. However, South Korea’s previously rash decision to forego DeFi under an undemocratic process has deprived the country of the time and opportunity to develop new innovations as a leading country in the digital frontier. By sticking only to digitalizing centralized finance, the country now aims to be in “standby” mode for its CBDC launch if and when required, so as not to fall behind in digital financial architecture. This paper scrutinizes the South Korean government’s moves on crypto and CBDCs and argues that 1) the Moon administration has shown incapability in addressing DeFi amid the crypto boom and bust, and 2) the BOK’s shift from non-issuance to potential issuance of the digital won is driven by its interest to uphold central bank independence amid swaying geopolitics between the U.S. and China and an unpredictable upcoming presidential election in South Korea.
Topic:: Economics, Elections, Finance, Cryptocurrencies, and Digital Currency
Political Geography:: China, Asia, South Korea, North America, and United States of America

193. Revisiting the links between economic inequality and political violence: The role of social mobilization

Author:: Patricia Justino
Publication Date:: 02-2022
Content Type:: Working Paper
Institution:: United Nations University
Abstract:: The main aim of this paper is to explore theoretically important mechanisms through which economic inequalities may affect the emergence of political violence given the forms of social mobilization they (may) generate. The paper identifies and explores two mechanisms under which social mobilization in unequal societies may result in either non-violent or violent collective action and, ultimately, in violent conflict. The first condition is the level of social cooperation between different social groups that are formed during the process of social mobilization. The second is the efficacy of collective action to drive change, which is in turn shaped by the ability of individuals within groups to coordinate their actions. Forms of social mobilization become violent when antagonism is the dominant form of social interaction between different social groups in unequal societies, and when each of these social groups exhibits high levels of internal coordination.
Topic:: Political Violence, Economics, Social Movement, Inequality, Mobilization, and Collective Action
Political Geography:: Global Focus

194. Immigrant entrepreneurship in startup cities — what works in which context?

Publication Date:: 02-2022
Content Type:: Video
Institution:: MIT Center for International Studies
Abstract:: Migrants are often considered to be ‘natural entrepreneurs’. This notion is based on a presumed inclination to take risks, an openness to new experiences, and a higher willingness to adapt than their local counterparts. Migrants found more businesses relative to the local population in many countries, despite facing additional challenges in the startup process. To support them in overcoming these challenges and to leverage their entrepreneurial potential, more and more organizations create targeted offers for this group of entrepreneurs — particularly in cities with vibrant entrepreneurial ecosystems. Increasingly, these ‘newcomer entrepreneurs’ find that their particular needs are better recognised and taken into account. Despite this, it is still unclear which interventions actually work for which target group, and in which context. Which role do the different stakeholders and systemic mechanisms in the local entrepreneurial ecosystem play?
Topic:: Economics, Entrepreneurship, Business, and Immigrants
Political Geography:: Global Focus

195. Mine Action and the Environment in Karabakh

Author:: Emil Hasanov
Publication Date:: 04-2022
Content Type:: Journal Article
Journal:: Baku Dialogues
Institution:: ADA University
Abstract:: The now‑liberated areas of Azerbaijan are contaminated by mines and explosive remnants of war (ERW), the clearance thereof being one of Baku’s highest post‑conflict priorities. Before proceeding any further, we must provide proper definitions of these terms, since they are technical in nature and thus may not be familiar to the general reader. According to the Convention on the Prohibition of the Use, Stockpiling, Production and Transfer of Anti‑Personnel Mines and on Their Destruction that was adopted in Oslo in 1997 and entered into force in 1999 (it is colloquially called the AntiPersonnel Mine Ban Convention, or APMBC), an anti‑personnel mine “means a mine designed to be exploded by the presence, proximity or contact of a person and that will incapacitate, injure or kill one or more persons.” An antivehicle or antitank mine is effectually the same thing, except that it is designed to explode when triggered by a vehicle. Together, they fall under the catchall term mine, which the same document defines as a “munition designed to be placed under, on, or near the ground or other surface area and to be exploded by the presence, proximity, or contact of a person or a vehicle.” Furthermore, explosive remnants of war (ERW) are defined as explosive munitions left behind after a conflict has ended. They include unexploded artillery shells, grenades, mortars, rockets, air‑dropped bombs, and cluster munitions. If such weapons fail to detonate as intended for whatever reason, they are called unexploded ordnance (UXO); if, on the other hand, they have not been used during an armed conflict and have been left behind by the party that brought them to the battlefield, they are called abandoned explosive ordnance (AXO). Lastly, cluster bombs or cluster munitions, which are defined as weapons containing from several to hundreds of explosive submunitions. They are dropped either from the air or fired from the ground and are designed to break open in mid‑air, releasing submunitions and saturating an area that can be as wide as several football pitches. Based on past practice, the failure rate of cluster munitions to explode as intended stands at between 10 and 30 percent.
Topic:: Climate Change, Economics, Environment, Mining, and Recovery
Political Geography:: Central Asia, Asia, and Azerbaijan

196. Sanctions, Economic Statecraft, and Venezuela’s Crisis

Author:: César Rodríguez
Publication Date:: 01-2022
Content Type:: Special Report
Institution:: Fourth Freedom Forum
Abstract:: This case study summarizes the evidence on the effect on Venezuela’s economic and social conditions of economic sanctions and other actions of economic statecraft taken by the United States and its allies in response to the country’s political crisis. The preponderance of evidence indicates that sanctions and other statecraft measures—including the formal recognition of a government with no de facto control over the territory—have had a strong and significant negative effect on the Venezuelan economy. These actions have made a sizable contribution to declining oil production, exacerbating the country’s fiscal crisis, and contributing to one of the largest documented peacetime economic contractions in modern history. Many arguments commonly voiced to dispute the effects of sanctions, such as those that appeal to temporal precedence of other causes of the country’s crisis, are either factually incorrect or premised on fallacious logic. Reforming the sanctions regime will be a complex task, given the interaction with other statecraft measures and a broader toxification of the country’s economic relations. Reform attempts should include the introduction of an oil-for-essentials program, support for political humanitarian agreements, issuance of clearer compliance guidelines, introducing an explicit differentiation between strategic and nonstrategic sanctions, and seeking multilateral alignment with international actors on key strategic issues including that of government recognition.
Topic:: Security, Diplomacy, Economics, Sanctions, and Humanitarian Crisis
Political Geography:: South America, Venezuela, and United States of America

197. Cutting Putin’s Energy Rent: ‘Smart Sanctioning’ Russian Oil and Gas

Author:: Ricardo Hausmann, Agata Łoskot-Strachota, Axel Ockenfels, Ulrich Schetter, Simone Tagliapietra, Guntram Wolff, and Georg Zachmann
Publication Date:: 04-2022
Content Type:: Working Paper
Institution:: The John F. Kennedy School of Government at Harvard University
Abstract:: Following the Russian aggression against Ukraine, major sanctions have been imposed by Western countries, most notably with the aim of limiting Russia’s access to hard international currency. However, Russia remains the world’s first exporter of oil and gas, and at current energy prices this provides large hard currency revenues. As the war continues, European governments are under increased pressure to scale-up their energy sanctions, following measures taken by the United States, the United Kingdom, Canada and Australia. This piece argues that given the inelasticity of Russia’s oil and gas supply, for Europe the most efficient way to sanction Russian energy would not be an embargo, but the introduction of an import tariff that can be used flexibly to control the degree of economic pressure on Russia.
Topic:: Economics, Oil, Sanctions, Exports, Currency, Energy, and Russia-Ukraine War
Political Geography:: Russia, Europe, Ukraine, and North America

198. Regional Diffusion of Foreign Demand Shocks Through Trade and Ownership Networks

Author:: Lionel Fontagné and Gianluca Santoni
Publication Date:: 09-2022
Content Type:: Working Paper
Institution:: Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:: International demand shocks are transmitted within the trade and ownership firms' networks and impact directly or indirectly domestic firm productivity and labor misallocation. Considering manufacturing firms for Italy, Spain and France over the period 2009-2017, we quantify these transmission channels from the global economy to the domestic firms, and within the domestic economy across locations, sectors and firms. We compute in a shift share fashion international demand shock at the district-sector-year level as plausibly exogenous to individual firms. Our results confirm that global shocks are transmitted through trade networks and that this transmission is largely mediated by firms' ownership networks both across and within the borders of the three countries.
Topic:: Economics, International Trade and Finance, Demand, and Productivity
Political Geography:: Europe, France, Spain, and Italy

199. Current Account Balances’ Divergence in the Euro Area: an Appraisal of the Underlying Forces

Author:: Emmanuelle Faure, Carl Grekou, and Valérie Mignon
Publication Date:: 12-2022
Content Type:: Working Paper
Institution:: Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:: This paper revisits the crucial issue of current account imbalances and focuses on the determinants of their gaps between eurozone Member States. We conduct robust estimations of the current account balances for a panel of ten founding euro area economies and construct a measure that allows us to diagnose why some countries have started to diverge from the eurozone mean in the last two decades. Our findings show evidence of remaining differences in countries’ economic development, meaning that real macroeconomic convergence has failed in the zone. Price and cost competitiveness, as well as fiscal balances, have also participated in this growing macroeconomic divergence. Overall, while the European authorities cannot influence the part of the current account gaps due to demographic factors, the role of fiscal redistribution and investment at the euro area level could help achieve macroeconomic convergence and thus reduce current accounts’ divergence in the zone.
Topic:: Economics, Regional Cooperation, European Union, Eurozone, and Regionalism
Political Geography:: Europe

200. University Participatory Budgets. From Municipalities to Higher Education?

Author:: Mariusz Poplawski
Publication Date:: 06-2022
Content Type:: Journal Article
Journal:: Polish Political Science Yearbook
Institution:: Polish Political Science Association (PPSA)
Abstract:: The participatory budget is an important element of the catalogue of tools for involving residents in the local decision-making. The positive effects of involving many citizens in the decision-making process slowly bear fruit in attempts to transfer p.b. into other spheres. This article analyses how these well-known patterns are adapted to new conditions – at universities. Several of them decided to introduce their own participatory budget. A comparative analysis of the local government model and solutions adopted by three universities provides the answer to this question. The hypothesis assumes that the civic budget at universities and polytechnics is, for the most part, a modification of the model used in cities with district status. As shown, the municipal participatory budget is a proven basis for creating its own regulations. However, the available schemes should be modified.
Topic:: Economics, Higher Education, Participation, and Schools
Political Geography:: Europe and Poland

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COLUMBIA UNIVERSITY PRESS