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You are looking at 1 - 10 of 47 items for :

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Cover Resilience and Growth in the Small States of the Pacific
Resilience and Growth in the Small States of the Pacific
Hoe Ee Khor, Mr. Roger P. Kronenberg, and Ms. Patrizia Tumbarello

Abstract

Pacific island countries face unique challenges to realizing their growth potential and raising living standards. This book discusses ongoing challenges facing Pacific island countries and policy options to address them. Regional cooperation and solutions tailored to their unique challenges, as well as further integration with the Asia and Pacific region will each play a role. With concerted efforts, Pacific island countries can boost potential growth, increase resilience, and improve the welfare of their citizens.

Keywords:
BOOK; GDP; GDP-weighted distance; financial crisis; market share; U.S. dollar; lending rate; real GDP; Natural disasters; Inflation; Income; Pacific Islands; Global; Asia and Pacific; Australia and New Zealand; Caribbean; IMF staff estimate; IMF staff calculation; business climate shortcoming; Climate change
Cover IMF Working Papers
The Journey to Inflation Targeting: Easier Said than Done The Case for Transitional Arrangements along the Road
Mr. Bernard J Laurens, Mr. Kelly Eckhold, Mr. Darryl King, Mr. Nils O Maehle, Abdul Naseer, and Alain Durré
Countries with evolving monetary regimes that decide to embark on “the Journey to inflation targeting” may not be able to adopt a full-fledged inflation targeting regime immediately. Those countries would be better off adopting transitional arrangements that take advantage of the informational content of monetary aggregates, developing an economic analysis capacity, and concentrating on monetay operations aimed at steering money market interest rates. This approach would allow the central bank to buy time for developing the building blocks for effective monetary policy, support transparent central bank communication, and limit the potential for undesirable outcomes along the road.
Keywords:
WP; regime; country; central bank; monetary policy; monetary regime; monetary policy transmission; MT regime; central bank communication; monetary policy implementation; balance sheet management; central bank Independence; transitional regime; a number of country; monetary policy framework; regime in place; country's authorities; Monetary base; Monetary aggregates; Inflation; Inflation targeting; Monetary policy frameworks; Africa; Global
Cover IMF Working Papers
Energy Subsidies and Public Social Spending: Theory and Evidence
Mr. Christian H Ebeke and Mr. Constant A Lonkeng Ngouana
This paper shows that high energy subsidies and low public social spending can emerge as an equilibrium outcome of a political game between the elite and the middle-class when the provision of public goods is subject to bottlenecks, reflecting weak domestic institutions. We test this and other predictions of our model using a large cross-section of emerging markets and low-income countries. The main empirical challenge is that subsidies and social spending could be jointly determined (e.g., at the time of the budget), leading to a simultaneity bias in OLS estimates. To address this concern, we adopt an identification strategy whereby subsidies in a given country are instrumented by the level of subsidies in neighboring countries. Our Instrumental Variable (IV) estimations suggest that public expenditures in education and health were on average lower by 0.6 percentage point of GDP in countries where energy subsidies were 1 percentage point of GDP higher. Moreover, we find that the crowding-out was stronger in the presence of weak domestic institutions, narrow fiscal space, and among the net oil importers.
Keywords:
WP; energy subsidy; public spending; political economy; social spending; Energy subsidies; Public social spending; Causality; subsidy rate; energy subsidies data; subsidy regime; Fiscal space; Oil prices; Consumption; Global
Cover IMF Staff Country Reports
Solomon Islands: Fourth Review Under the Extended Credit Facility Arrangement
International Monetary Fund. Asia and Pacific Dept
KEY ISSUES Recent Developments and Outlook. Solomon Islands held its parliamentary elections on November 19, 2014 and elected a new government led by Prime Minister Manasseh Sogavare, representing the Democratic Coalition for Change. The country’s Gold Ridge mine, its only gold mine, remains closed and the chances of it re-opening are limited given current gold prices. At the same time, the logging industry is being adversely affected by the depletion of forestry resources. As a result, the near-term outlook has worsened. While lower oil prices constitute a windfall to consumers and producers, diversifying sources of growth and boosting the competitiveness of the economy are key to strengthening medium-term growth prospects. The risks to the outlook are to the downside. Program Performance. Performance under the Extended Credit Facility (ECF) arrangement has been broadly satisfactory. Performance criteria for end-June 2014 were met by large margins. Indicative targets (ITs) for end September 2014 were also met, except for those on health and education spending, which were both narrowly missed in June and September 2014. Despite delays, the authorities have made progress in implementing the structural reform agenda. Policy Recommendations ? In the medium term, recalibrate ambitious spending plans in line with implementation capacity, revenue envelope, financing availability, and the need to preserve fiscal buffers for resilience against shocks given the serious setback in mining prospects linked to the closure of the only gold mine. ? Strengthen the quality of public spending and fiscal management by advancing Public Financial Management (PFM) reform, including improving the transparency and accountability in the use of constituency funds. ? Maintain the current monetary stance but stand ready to tighten policy if credit growth and inflationary pressures surge. ? Strengthen financial regulation and supervision, including supervision of the National Provident Fund, and improve private sector access to credit.
Keywords:
ISCR; CR; ECF arrangement; government; vulnerabilities to shock; SDR; Solomon Islands government; reform effort; government value; Credit; Oil prices; Imports; Australia and New Zealand; Global; Caribbean; Asia and Pacific
Cover IMF Working Papers
Determinants of Interest Rate Spreads in Solomon Islands
Mr. Nooman Rebei
Bank interest rate spreads in Solomon Islands are high by regional standards. This paper examines the determinants of bank interest rates including bank specific, banking sector, macroeconomic, and legal indicators. The results show that the scale of operation, overhead costs, concentration index, and some macroeconomic variables (i.e., monetary policy rates and real growth) significantly influence interest rate margins. The paper particularly focus on the influence of the banking sector structure and finds strong evidence of bank collusion.
Keywords:
WP; bank; interest rate; interest; rate; Solomon Islands; banking spreads; financial intermediation; bank spread; bank specific; market power; bank concentration; credit risk; bank cost; banks in Solomon Islands; risk-averse bank; bank risk aversion; correlated bank reaction; Commercial banks; Loans; Income; Legal support in revenue administration; Inflation; Asia and Pacific
Cover IMF Staff Country Reports
IMF Executive Board Completes First Review Under the Extended Credit Facility Arrangement for Solomon Islands, and Approves US$ 0.22 Million Disbursement
International Monetary Fund. Asia and Pacific Dept

This paper discusses Solomon Islands’ First Review Under the Extended Credit Facility (ECF) Arrangement. The three-year arrangement under the ECF is on track. All December 2012 and continuous performance criteria have been met, except for the cash balance floor, which was temporarily missed by a small amount. The indicative target on health and education for December 2012 was also missed by a very small margin. The IMF staff recommends completion of the review and supports the authorities’ request for a waiver of the nonobservance of the cash balance floor at end-December, and the modification of end-June 2013 performance criteria.

Keywords:
ISCR; CR; government; balance; IMF staff estimate; land access regime; cash balance; public finance act; Currencies; Exchange rate policy; Conventional peg; Inflation
Cover IMF Working Papers
Exogenous Shocks and Growth Crises in Low-Income Countries: A Vulnerability Index
Ms. Era Dabla-Norris and Yasemin Bal Gunduz
This paper develops a new index which provides early warning signals of a growth crisis in the event of large external shocks in low-income countries. Multivariate regression analysis and a univariate signaling approach are used to map information from a parsimonious set of underlying policy, structural, and institutional indicators into a composite vulnerability index. The results show that vulnerabilities to a growth crisis in low-income countries declined significantly from their peaks in the early 1990s, but have risen in recent years as fiscal policy buffers were expended in the wake of the global financial crisis. 
Keywords:
WP; Vulnerability index; growth crises; low-income countries; growth crisis; real GDP growth; terms of trade; confidence interval; explanatory variable; crisis probability; Exchange rate arrangements; Currency markets; Export prices; Exports; Global
Cover IMF Staff Country Reports
IMF Completes the First Review Under the Standby Credit Facility with Solomon Islands, and Approves Request for Modification of Performance Criteria
International Monetary Fund

The First Review Under the Standby Credit Facility (SCF) discusses Solomon Islands’ satisfactory performance under the SCF-supported program, approved in December 2011. The current arrangement is intended to be precautionary and, given the current level of reserves, the authorities do not intend to draw on the IMF's resources unless an unexpected need arises. The outlook remains favorable, but with large near-term downside risks. Substantial progress has been made toward implementing structural benchmarks.

Keywords:
ISCR; CR; implementation; inflation risk; request; government; GDP; Inclusive growth; Expenditure efficiency; Commodity price shocks
Cover IMF Staff Country Reports
IMF Completes the Final Review Under the Standby Credit Facility Arrangement for Solomon Islands and Approves US$ 4.85 Million Disbursement
International Monetary Fund

Solomon Islands’ economy has rebounded from the 2008–09 global financial crisis. An 18-month Standby Credit Facility has been approved in June 2010 and succeeded in restoring macroeconomic and financial stability. A new resource taxation regime is the key to reap the benefits from natural resource wealth and ensure that the government receives a fair share of mining revenue. Reforms of mining legislation should be a key part of a broader set of measures to improve the investment climate and the regulatory framework.

Keywords:
ISCR; CR; staff appraisal; debt; SCF arrangement; Solomon Islands' economy; Financial sector stability; Medium-term budget frameworks; Commodity price shocks; Global financial crisis of 2008-2009; Global
Cover IMF Staff Country Reports
Solomon Islands: Selected Issues
International Monetary Fund
This paper analyzes Solomon Islands’ ongoing reforms concerning of the mineral taxation regime and the fiscal impact of mineral resources. The analysis shows that mineral revenue could be substantial, provided that mineral prices remain strong in the medium term. Enforcing the tax agreement with, a Gold Ridge company, and implementing the new resource taxation regime are critical to ensure that the forthcoming mineral wealth spills over to the rest of the economy. Solomon Islands should adopt new fiscal rules and fiscal responsibility provisions to manage large but volatile resource revenue.
Keywords:
ISCR; CR; revenue; tax; transmission mechanism; headline inflation; consumer goods price; basket regime; Gold Ridge tax agreement; monetary policy transmission mechanisms; mining revenue; inflation pressure; mineral revenue; Mining sector;