Mrs. Harinder K Malothra, Mr. Milan M Cuc, Mr. Ulrich Bartsch, and Mr. Menachem Katz
Transparency and accountability in oil sector operations are necessary to improve governance in oil-producing countries. The same transparency and accountability guidelines that apply to non-oil revenue should apply to oil revenue. Oil revenue is part of government budgetary operations, and it is of overwhelming importance in the countries we are dealing with in this paper. The IMF’s Manual on Fiscal Transparency (IMF, 2001) states that comprehensive coverage of all fiscal activity undertaken by the central government is essential from a transparency standpoint. In some cases, the coverage should extend beyond the government itself: the public sector balance should be reported when nongovernmental public sector agencies undertake significant quasi-fiscal activities. The public should accordingly be provided with full information on the past, current, and projected fiscal activity of the government.
The discussion so far highlights the need to take a broad perspective in thinking about how to make African RTAs work better. Careful design and sustained implementation are necessary to make any RTA deliver, but the more fundamental determinants of RTA performance seem to be policies and conditions that affect the overall environment for trade. In this context, MFN liberalization, improvements in regional infrastructure (particularly transport), and reductions in trading costs at borders are critical. These are all conventional development issues but nonetheless pose difficult challenges for African policymakers. African countries need to protect their revenue base in undertaking MFN tariff reductions, and, when such tariff cuts are implemented in their trading partners, they need to address the consequence of preference erosion.34 Efforts to improve infrastructure and reduce trading costs will require adequate local capacity of implementation, in addition to financial resources. In all these areas, the IMF can lend its support to African countries, beyond its core expertise area of macroeconomic management, which is also essential to create a conducive environment for trade.
Over the past decades, African countries have set ambitious goals for their regional trade arrangements, but the results have so far fallen short of expectations. Most African RTAs started with a low level of intraregional trade. Thus, even if the RTAs had been more successfully implemented, the impact of these arrangements on Africa’s overall trade would have been small—unless they had created a more favorable environment for overall trade. The potential of the RTAs in exploiting economies of scale and enhancing competition has been limited by the lack of trade complementarity among RTA partners, small market size, poor transport infrastructure, and high trading costs at the border. More important, relatively high barriers against trade with the rest of the world have essentially turned RTAs into an import substitution policy at the regional and subregional levels.
Africa is home to some 30 regional trade arrangements (RTAs), many of which are part of deeper regional integration schemes.1 On average, each African country belongs to four RTAs (World Bank, 2004). There has been a renewed push in recent years for broader and deeper preferential trade arrangements in Africa. Some of the previously defunct regional arrangements (e.g., the East African Community) have been revived, while continental institutions—namely, the African Economic Community (AEC), the African Union, and the New Partnership for Africa’s Development (NEPAD)—have been launched under the auspices of the Organization of African Unity (OAU). In addition, African countries are preparing to negotiate FTAs with the European Union (EU) under the Economic Partnership Agreements (EPAs). The Southern African Customs Union (SACU) is negotiating an FTA with the United States. South Africa, the largest African economy, has already signed an FTA with the EU.2
Mr. Christian H. Beddies, Mr. Enrique A Gelbard, Mr. James McHugh, Ms. Laure Redifer, and Mr. Garbis Iradian
This chapter reviews Armenia’s growth performance and poverty indicators since the early 1990s. It seeks to respond to the following four questions: What were the sources of growth? Can the recent rapid growth be sustained? How responsive was poverty reduction to economic growth? What is the minimum annual growth needed for Armenia to reach its poverty target by 2015? The analysis is based on a growth accounting exercise and the results of recent household surveys.
Mr. James Y. Yao, Mr. Gamal Z El-Masry, Padamja Khandelwal, and Mr. Emilio Sacerdoti
Table 3.1 sketches a brief synopsis of the history of industrial transformation in Mauritius, indicating which were the principal growth industries in each period. In the 1970s, the sugar sector, which includes both cane cultivation and sugar milling, accounted for over 26 percent of GDP and formed the largest sector of the economy. The export-processing zone (EPZ), which is dominated by the clothing and textiles industry, took off in the 1980s. The manufacturing share of GDP climbed rapidly from 4.5 percent in 1982 to 11.6 percent in 1986, equivalent to the percentage contribution to GDP made by sugar cultivation. The sugar sector’s contribution to GDP declined, and by the beginning of the 1990s value added in the EPZ was higher than in the agricultural sector. Rapid growth in tourism and financial services during the 1990s further transformed the structure of the economy, and turned Mauritius into a four-pillar economy.
In recent years, African policymakers have increasingly resorted to regional trade arrangements (RTAs) as a substitute for broad-based trade liberalization. This trend has long-term implications for the effectiveness of trade policy as a tool for poverty reduction and growth. This paper examines the record of RTAs in promoting trade and investment. It also explores policy measures that may help improve RTAs' performance.