This Selected Issues paper on the Republic of Mozambique reports key policy and institutional issues in the macroeconomic management of scaled-up aid and in promoting sustainable private-sector led growth. A further moderate scaling-up of foreign aid could continue to be fully spent and focus on productive priority sectors. This would help achieve the Millennium Development Goals while at the same time eliciting a supply response to mitigate potential Dutch-disease effects brought on by an appreciating real exchange rate.
This paper summarizes recent developments in the Doha Round negotiations, and aid for trade. As requested by the Development Committee last September, it reviews existing mechanisms for cross-country and regional aid for trade needs. It proposes possible options to overcome the coordination and capacity problems affecting regional cooperation.
This Selected Issues paper and Statistical Appendix provide background information and analytical support for key policy issues discussed in the 2004 Article IV Consultation discussions with Mauritius. The impact of the erosion of trade preferences on exports, growth, and employment is assessed under two scenarios—a moderate and an extreme scenario. To quantify the adverse impact of trade liberalization, the paper estimates various elasticities of GDP growth to exports, and unemployment to growth. The paper also analyzes the labor market institutions and low-skilled employment in Mauritius.
This paper examines different explanations-initial conditions, openness to trade and FDI, and institutions-of the Mauritian growth experience since the mid-1970s. We show that arguments based on openness to trade and FDI are either misleading or incomplete, and the transmission mechanism insufficiently identified. However, even when correctly articulated, openness appears to be a proximate rather than an underlying explanation for the Mauritian experience. The institution-based explanation offers greater promise. Ultimately, however, the econometric results indicate that existing explanations may be incomplete. Some idiosyncratic factors, particularly Mauritian diversity and the responses to managing it, may provide the missing pieces in the story of Mauritius's success.
International Monetary Fund. External Relations Dept.
This paper examines how Africa can reposition itself to take full advantage of globalization—while minimizing the risks in the process—to accelerate economic growth and reduce poverty. The paper highlights that Africa’s share of world trade has dwindled, foreign direct investment in most countries has remained at low levels, and the income gap relative to advanced countries has widened. The paper looks at why Africa has missed out so far on the benefits of globalization, and indicates what steps Africa now needs to take to boost economic growth.
International Monetary Fund. External Relations Dept.
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Since the early 1990s, many countries in sub-Saharan Africa have made significant progress in opening their economies to external competition through trade and currency liberalization. This paper analyzes trade and policy developments for 22 countries in eastern and southern Africa, looks at regional and multilateral integration issues, and reflects on the main challenges these countries face in the new decade. It addresses the main trade policy issues for these countries and suggests possible actions they and their trading partners could follow.
This Background Paper and Statistical Annex examines selected issues pertaining to the Mauritian economy, which are all related to the question of how Mauritius will be able in the future to sustain its export-led development and diversify its economy. The paper discusses the impact of the Uruguay Round agreement on the Mauritian economy. The paper also utilizes available data to assess Mauritius’s external competitiveness, which is a major issue as regards the sustainability of high export growth.
Since the early 1990s, many countries in sub-Saharan Africa have made significant progress in opening their economies to external competition through trade and exchange liberalization, often in the context of IMF and World Bank-supported programs. African liberalization took place during a period of increasing globalization of trade and investment, the conclusion of the Uruguay Round of trade negotiations, and the creation or expansion of a number of important regional trade arrangements in other parts of the world. These initiatives contributed to a revival of interest among African policymakers in regional integration, resulting in the establishment or renewal of regional organizations, such as the West African Economic and Monetary Union (WAEMU), the Cross-Border Initiative (CBI), the Southern African Development Community (SADC), the Common Market for Eastern and Southern Africa (COMESA), the Commission for East African Cooperation (EAC), and the Indian Ocean Commission (IOC) (Table 1.1).
The 22 eastern and southern African countries covered in this study vary considerably in population, size, and economic profile (Table 2.1). Population size varies from fewer than 80,000 people in Seychelles to about 62 million people in Ethiopia. The average per capita income of about US$1,100 also masks large variations across countries. The Seychelles is the richest country, with a per capita GDP of about US$6,000 at 1990 prices, while the Democratic Republic of Congo (DRC) stands as the poorest country, with an income per capita of US$99 (a ratio of 60 to 1). There is also a wide variation in income inequality among countries. For example, the Gini coefficient, which measures income inequality, varies from 29 in Rwanda to 59 in South Africa, the latter being among the highest in the world.