While trade integration has been an engine of global growth and prosperity, as suggested by theory, some sectors have been negatively affected by increased import competition. We test if this negative effect is significant in a context of high intranational migration, as theory indicates that labor mobility could reduce it. We focus on the 2004-14 period of trade liberalization in Peru (a major beneficiary of trade integration), which allows for methodological improvements relative to similar studies. We find that districts competing with liberalized imports experienced significantly lower growth in consumption per capita despite some emigration in response to increased import competition. This underscores the need to support the “losers of trade liberalization” even amidst high labor mobility.
Rahul Anand, Ms. Kalpana Kochhar, and Mr. Saurabh Mishra
Structural transformation depends not only on how much countries export but also on what
they export and with whom they trade. This paper breaks new ground in analyzing India’s
exports by the technological content, quality, sophistication, and complexity of the export
basket. We identify five priority areas for policies: (1) reduction of trade costs, at and
behind the border; (2) further liberalization of FDI including through simplification of
regulations and procedures; (3) improving infrastructure including in urban areas to enhance
manufacturing and services in cities; (4) preparing labor resources (skills) and markets
(flexibility) for the technological progress that will shape jobs in the years ahead; and (5)
creating an enabling environment for innovation and entrepreneurship to draw the economy
into higher productivity activities.
This volume examines how independent evaluation contributes to the legitimacy and effectiveness of the IMF. It describes the evolution and impact of the Independent Evaluation Office ten years after its creation as well as the challenges it has faced. It also incorporates feedback from a wide range of internal and external actors and offers useful insights for international organizations, academics, and other global stakeholders.
Report prepared by Jack Boorman, Former Director of the Policy Development and Review Department and Teresa Ter-Minassian, former Director of the Fiscal Affairs Department at the IMF:
This report summarizes the views of a representative sample of country authorities on IMF surveillance.
This paper uses the 1991 Indian trade liberalization to measure the impact of trade liberalization on poverty, and to examine the mechanisms underpinning this impact. Variation in sectoral composition across districts and liberalization intensity across production sectors allows a difference-in-difference approach. Rural districts, in which production sectors more exposed to liberalization were concentrated, experienced slower decline in poverty and lower consumption growth. The impact of liberalization was most pronounced among the least geographically mobile, at the bottom of the income distribution, and in Indian states where inflexible labor laws impeded factor reallocation across sectors.
Country surveillance constitutes an essential part of the IMF's mandate to oversee the international monetary system and to monitor the economic and financial policies of its 185 member countries. The IMF's Executive Board conducts regularly scheduled reviews of country surveillance (the Triennial Surveillance Review) to consider ways to improve its effectiveness. The 2008 review is the first such review since the Executive Board approved, in June 2007, a new Decision on Bilateral Surveillance. This Decision affirms that the focus of bilateral surveillance is on those policies of members that can significantly influence present or prospective external stability. The review focused on the implementation of country surveillance in the recent past, as presented in the following set of papers:
• The overview paper presents the main findings and priority areas for further work. The review finds that stakeholders hold the quality of IMF surveillance in high regard, but that improvements should focus on risk assessment, integration of macroeconomic and financial sector surveillance, multilateral perspectives (cross-border spillovers and cross-country analysis), and exchange rate assessments. The priority areas identified in the review served as key background for the preparation of the IMF’s Statement of Surveillance Priorities (SSP).
• The Thematic Findings (Supplement 1) provides supporting analysis on the implementation of bilateral surveillance in the recent past and, particularly, on the appropriateness of its focus and its analytical value added in particular areas, including the overall “health check”, exchange rates, financial sector issues, cross-country analysis and cross-border spillover analysis (including a case study of surveillance in the run up to the subprime crisis), the degree of candor and evenhandedness in surveillance, and the effectiveness of its communication.
• The Background Information paper (Supplement 2) provides further information, including a description of review methodologies, and results including interview findings, surveys of various audiences, and supporting data on the quality of consultation documents.
• The External Consultant’s Report provides an independent view of IMF surveillance in Europe.
International Monetary Fund. External Relations Dept.
In December 2006, Murilo Portugal of Brazil joined the IMF’s four-member management team as Deputy Managing Director, with broad responsibilities in running the IMF—including overseeing the technical assistance [TA] initiative. Portugal, who until recently was Brazil’s deputy finance minister, had previously served as an IMF Executive Director (1998–2005) representing a Latin American constituency and as a World Bank Group Executive Director (1996–2000). He shared his thoughts with Laura Wallace of the IMF Survey on Latin America’s economic outlook and the TA effort.
This paper examines the possibility of Asian monetary integration. The paper highlights that the objectives and motivations behind the continuing debate for Asian monetary integration have now evolved. The objectives are no longer defensive, no longer preoccupied with crisis prevention or resolution. They are now more forward looking; they are about growth, about greater trade integration, about spurring greater cross-border flows of investment within Asia, and about promoting the integration and deepening of financial markets.
This paper discusses the need for Asian Monetary Integration. The original motivation for proposals for Asian monetary Integration had to do with a desire to reduce Asia’s susceptibility to shocks, particularly financial shocks. There was also a broader sense that Asia had to be more self-reliant and gain fuller control over its destiny. The objectives are about growth, about greater trade integration, about spurring greater cross-border flows of investment within Asia, and about promoting the integration and deepening of financial markets. This paper highlights that financial market integration has lagged substantially behind trade integration, and this is why Asian saving surpluses are intermediated largely through financial markets outside Asia.