This Selected Issues paper for the former Yugoslav Republic of Macedonia is examined. Real GDP growth accelerated to 5 percent in 2007 and 6 percent in the first half of 2008, from its historical average of about 3 percent. Increased investment, partly financed by FDI, is the main driver boosting domestic demand, as seen in the fast-growing import of investment and intermediate goods. Simultaneously, the current account deficit has widened substantially since 2007 and has become a major concern for macroeconomic stability.
The paper is an elaborated report on Nicaragua’s potential economic growth. The challenges and idiosyncratic shocks were immense but the policies of better education, labor contracts, and accomplishments in public investments paved the way for movement of the economy. The external competitiveness and exchange rate assessment also have an important hand. The achievements in the electricity sector and the improvement in reforming the pension system are the prominent aspects. On the whole, the Board considers this growth as a positive trial of development in the global panorama.
In this study, owing to the global financial crisis, a Stand-By Arrangement (SBA) for the Dominican Republic was approved. The aim is to limit the procyclical policies in the short-term and discussions focused on policies necessary to ensure that the end-2011 and 2011 targets are observed. Administrative measures such as proindustria, withholding income tax, and indexation of specific tax are estimated to increase revenues. The conditional cash program “Solidaridad” is explained. Finally, various issues under the financial program are discussed.
International Monetary Fund. Western Hemisphere Dept.
This Selected Issues paper assesses the economic impact of Mexico’s structural reforms. The Mexican authorities have been implementing an ambitious structural reform agenda in a coordinated effort to lift productivity growth. The reforms have targeted a broad range of industries; dissolved state monopolies; and addressed labor market, education, and governance shortcomings. The analysis suggests that external headwinds have masked evidence that the reforms are achieving many of the intended transformations in the targeted sectors. Priority should go to reforms targeting the rule of law and attendant improvements in security and reduction of corruption. These will not only improve the business environment but are key to the success of existing reform efforts.
In this paper we contribute to the empirical literature on growth in the MENA region by attempting to quantify the impact of the various constraints faced by local businesses highlighted by the World Bank’s Business Enterprise surveys. To the best of our knowledge this dataset has not been used in any empirical analysis looking at the main constraints on growth in the MENA region. Our empirical results suggest that the key direct constraints to growth in the MENA region are difficulties in access to finance, labor skill mismatches and shortages, and electricity constraints.
Mr. Benedicte Baduel, Carolin Geginat, and Ms. Gaelle Pierre
This paper examines the extent to which firms in selected MENA countries reported being constrained by the business environment around the time of the Arab Spring and the extent to which these constraints affected their employment performance. The results suggest that small firms in MENA faced more structural constraints than similar firms in other regions. We also find that MENA firms’ weaker job creation can be explained in great part by the macroeconomic environment and structural constraints. Low GDP growth, falling external competitiveness, corruption, lack of access to finance and poor access to electricity are found to explain a significant part of the lack of employment growth in MENA firms compared to their peers.
Many developing economies are often hit by electricity crises either because of supply
constraints or lacking in broader energy market reforms. This study uses manufacturing
firm census data from Ethiopia to identify productivity losses attributable to power
disruptions. Our estimates show that these disruptions, on average, result in productivity
losses of about 4–10 percent. We found nonlinear productivity losses at different quantiles
along the productivity distribution. Firms at higher quantiles faced higher losses compared
to firms around the median. We observed patterns of systematic shutdowns as firms
attempt to minimize losses.
International Monetary Fund. External Relations Dept.
Is the much-hyped “new economy,” based on the information technology (IT) sector, a real phenomenon? Reactions to this sector have gone from “unbridled optimism through much of 2000 to skepticism after the crash in IT equity prices later that year.” But Tamim Bayoumi and Markus Haacker, authors of a recent IMF working paper, are convinced not only that the IT revolution is real but that it will produce big benefits over the long run. They spoke to the IMF Survey about who will benefit from the IT revolution and how.