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Mr. Amadou N Sy, Mr. Peter J Kunzel, Mr. Paul S. Mills, and Andreas Jobst
Recent years have witnessed a surge in the issuance of Islamic capital market securities (sukuk) by corporates and public sector entities amid growing demand for alternative investments. As the sukuk market continues to develop, new challenges and opportunities for sovereign debt managers and capital market development arise. This paper reviews the key developments in the sukuk market and informs the debate about challenges and opportunities going forward.
Ms. Andrea Schaechter
Using electronic delivery channels for banking services and products has become increasingly popular in recent years. Electronic banking makes it possible to offer banking services around the world 24 hours a day. The dependence on technology for providing the services with the necessary security, and the cross-border nature of transactions, involve additional risks for banks and new challenges for banking regulators and supervisors. This paper provides an overview of some of the issues resulting from the development of electronic banking and how they are currently being addressed by regulatory and supervisory authorities.
Mr. Ernesto Hernández-Catá
This paper argues that sub-Saharan Africa’s growth performance needs to be improved substantially in order to raise standards of living to an acceptable level and achieve a visible reduction in poverty. The paper provides a broad overview of the explanations for sub-Saharan Africa’s unsatisfactory growth performance in the past, paying particular attention to the empirical literature. It argues that growth has been hampered by economic distortions and institutional deficiencies that have increased the risk of investing in Africa, and lowered the rates of return on capital and labor as well as the growth of total factor productivity.
Mr. Jan Walliser
Analysts agree that raising national saving is one of the key objectives of social security reform in the United States. Hence, to judge the merits of proposals requires a comparison of saving responses. The paper outlines the difficulties involved in making those comparisons, which arise from the unsustainability of the current social security system and the uncertainty regarding the use of projected budget surpluses. Building on previously developed arguments, it discusses three typical reform plans and also draws some conclusions about the relationship between social security reform and the long-run sustainability of fiscal policy.
Mr. V. Hugo Juan-Ramon
For more than three decades, Honduras’s average annual growth in real per capita GDP has been almost zero and highly uneven, even though its total investment-to-GDP ratio has been relatively large. This paper argues that policy and efficiency variables seem to have had less of an influence on growth in Honduras than they had on other countries. Instead, lack of growth can be attributed to the offsetting negative influence of low labor and capital productivity, which result from deficient levels of human capital and inadequate composition of investment. Other constraints to growth in Honduras include inadequate physical and institutional infrastructures.
Mr. Mohsin S. Khan, Mr. Stanley Fischer, and Mr. Ernesto Hernández-Catá
This paper examines the experience of Sub-Saharan Africa (SSA) to answer the question of whether the region is at a turning point in its economic fortunes. The improvement in growth reflects in part a rise in the utilization of existing capacity. To be sustained, however, a high rate of growth will require an increase in investment rates and/or an increase in total factor productivity—i.e., an improvement in the technological, political, administrative and economic factors that raise the rate of return on both capital and labor. The close link between investment and growth in developing countries over the long term is evident in the empirical growth literature. For developing countries in general, the elasticity of growth with respect to the investment/GDP ratio has been found to lie within the range of 0.3–0.5. Although increasing investment is crucial, action is also needed in many complementary areas in order to raise productivity and growth.
Mr. George Kopits
Pursuant to the Treaty of Maastricht, members of the European Union (EU) intend to participate in the Economic and Monetary Union (EMU), in part through convergence toward specified limits on the overall deficit and gross debt of general government. The paper argues that in several EU members, the financial imbalance of social security institutions may constitute an impediment to meeting these requirements. Given a constraint on further payroll tax increases, most countries will need to undertake major reform of public pension and health-care systems, to ensure adherence to the EMU fiscal criteria in the medium to long run.
Mr. Jonathan David Ostry
Since the mid-1980s, New Zealand has been engaged in a broad-ranging economic reform program--involving liberalization of key sectors of the economy, reduction in trade protection, and trimming of the public sector--in order to restructure its economy and stimulate growth. With growth performance having been rather lackluster in recent years, questions have been raised as to whether a more interventionist approach--such as that followed by some Asian countries--might be warranted in order to place the economy on a higher growth path. A review of the empirical literature dealing with the experience of the dynamic Asian economies does not suggest that their success can be attributed to any significant degree to selective government interventions.