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Asia and Pacific > India

You are looking at 1 - 10 of 118 items for :

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Cover Departmental Papers
Economic Diversification in Developing Countries: Lessons from Country Experiences with Broad-Based and Industrial Policies
Corinne C Delechat
,
Giovanni Melina
,
Monique Newiak
,
Chris Papageorgiou
,
Ke Wang
, and
Nikola Spatafora
This paper examines the significance and impact of broad-based and industrial policies on economic diversification in developing economies, supported by a literature reviews, case studies, and IMF analyses. Economic diversification entails shifting from traditional sectors, like agriculture and mining, to a variety of high-quality services and sectors. This transition is crucial for adapting to global market fluctuations and promoting sustainable growth and improved living standards. A literature review, including many IMF contributions, reveals a strong correlation between economic diversification and improved macroeconomic performance in developing countries, such as faster economic growth and higher incomes per capita. Factors influencing economic diversification include macroeconomic stability, infrastructure quality, workforce skills, credit access, regulatory environment, and income equality. Six case studies highlight the experiences of Costa Rica, Gabon, Georgia, India, Senegal, and Vietnam, demonstrating that successful diversification strategies require a long-term commitment and effective broad-based policies. Industrial policies can support diversification by addressing market failures, but they must be well-designed and effectively implemented. Common lessons include the necessity of maintaining macroeconomic stability, investing in human capital, and fostering competition. Sector-specific mechanisms like Special Economic Zones should be used cautiously, emphasizing underlying bottlenecks and minimizing fiscal costs. Country-specific insights include Costa Rica's strategic policy shift towards export orientation, Gabon's reduced dependence on oil, Georgia's market-friendly policies, India's skilled labor and software clusters, Senegal's infrastructure and business environment improvements, and Vietnam's transition from an agrarian to an industrial economy. The IMF's engagement in diversification emphasizes improving human capital, infrastructure, reducing trade barriers, and promoting international trade integration. Policymakers, researchers, and international organizations increasingly recognize the importance of economic diversification for resilient, sustainable, and inclusive growth, requiring nuanced policy interventions tailored to each country's context and capabilities.
Keywords:
Economic Diversification; Developing Economies; Industrial Policy; Macroeconomic Stability; IMF Analysis; IMF team; diversification strategy; countries' diversification experience; government policy; diversification result; Exports; Foreign direct investment; Service exports; Global; Sub-Saharan Africa; Asia and Pacific
Cover IMF Working Papers
Climate Policies and External Adjustment
Rudolfs Bems
,
Luciana Juvenal
,
Weifeng Liu
, and
Warwick J. McKibbin
This paper assesses the economic effects of climate policies on different regions and countries with a focus on external adjustment. The paper finds that various climate policies could have substantially different impacts on external balances over the next decade. A credible and globally coordinated carbon tax would decrease current account balances in greener advanced economies and increase current accounts in more fossil-fuel-dependent regions, reflecting a disproportionate decline in investment for the latter group. Green supply-side policies—green subsidy and infrastructure investment—would increase investment and saving but would have a more muted external sector impact because of the constrained pace of expansion for renewables or the symmetry of the infrastructure boost. Country characteristics, such as initial carbon intensity and net fossil fuel exports, ultimately determine the current account responses. For the global economy, a coordinated climate change mitigation policy package would shift capital towards advanced economies. Following an initial rise, the global interest rates would fall over time with increases in the carbon tax. These external sector effects, however, depend crucially on the degree of international policy coordination and credibility.
Keywords:
Global climate policies; carbon tax; net-zero emissions; current account balances; international capital flows; dynamic general equilibrium modelling; G-Cubed; climate change mitigation policy package; current account response; IMF working paper 24/162; infrastructure investment; investment response; Current account; Greenhouse gas emissions; Productivity; Global; Europe
Cover Policy Papers
IMF and World Bank Approach to Cross-Border Payments Technical Assistance
International Monetary Fund. Monetary and Capital Markets Department
and
World Bank
The G20 had made enhancing cross-border payments a priority. Faster, cheaper, more transparent and more inclusive cross-border payment services have the potential to be transformative for citizens and economies across the world. The Roadmap for Enhancing Cross-Border Payments, launched in 2020, is the first attempt by the international community to address the challenges faced by cross-border payments in a holistic way. A key foundational element in the Roadmap was the publication by the FSB of 11 quantitative targets to define the Roadmap’s aims and create accountability. Technical Assistance (TA) plays a critical role in helping achieve the Roadmap targets. TA relates closely to, and builds on, the IMF’s and World Bank’s respective missions. This paper outlines a multi-year strategy to provide TA in order to meet the cross-border payments targets. The paper (1) details the important role TA plays in achieving the Roadmap targets; (2) summarizes stocktakes conducted by the IMF and World Bank of recent and ongoing TA supporting cross-border payments; and (3) explains the IMF’s and World Bank’s approaches to cross-border payments TA. The IMF and World Bank commit to collaborating, coordinating, and complementing each other on cross-border payments TA wherever possible and appropriate at country/project level.
Keywords:
Cross-border payments; stocktake; technical assistance; payment systems; IMF TA approach; strengthening World Bank TA; IMF TA mission; TA program; IMF-World Bank; TA mission; cross-border payments TA; Anti-money laundering and combating the financing of terrorism (AML/CFT); Remittances; Central Bank digital currencies; Global
Cover IMF Staff Country Reports
United Arab Emirates: Selected Issues
International Monetary Fund. Middle East and Central Asia Dept.
The Selected Issues paper discusses United Arab Emirates’ (UAE) focus on reforms for productive and greener growth. This paper aims to quantify the potential long-term growth and productivity gains from ongoing structural reform efforts. Facilitating green and sustainable private finance would reduce the direct fiscal burdens of investment needs and help promote a smooth transition to a lower carbon future. The UAE has recently signed or started negotiations for Comprehensive Economic Partnership Agreements with eleven countries. Depending on the UAE’s ability to further attract foreign direct investment, the reduction of tariffs, especially on intermediate inputs, can significantly lift long-term growth through stronger competition, access to a higher number of varieties and quality of inputs, and transfer of technology. Developing and scaling up private green and sustainable finance, as well as creating an enabling environment for smooth energy transition, would reduce direct fiscal costs, increase efficiency of green investments, and preserve public financial wealth while delivering on growth and Net Zero ambitions.
Keywords:
UAE government; ICT investment outcome; FDI restrictiveness index; quantifying gains from trade liberalization; productivity gain; Climate finance; Digital economy; Foreign direct investment; Sustainable growth; Global
Cover IMF Working Papers
Inequality and the Structure of Countries’ External Liabilities
Philipp Harms
,
Mathias Hoffmann
,
Miriam Kohl
, and
Tobias Krahnke
In this paper, we present empirical evidence that higher income inequality is associated with a greater equity share in countries' external liabilities, and we develop a theoretical model that can explain this observation: In a small open economy with traded and nontraded goods, entry barriers depress entrepreneurial activity in nontraded industries and raise income inequality. The small number of domestic nontraded-goods firms leaves room for foreign firms to operate on the domestic market, and it reduces external borrowing. The model suggests that barriers to entrepreneurial activity could be conducive to attract equity-type capital inows. Our empirical results lend some support to this conjecture.
Keywords:
Portfolio Equity; Foreign direct investment; External debt; External liabilities; Income Inequality; entry barrier; equity share; barriers to entrepreneurial activity; traded-goods firm; Income; Portfolio investment; Self-employment; South Asia; East Asia; Foreign corporations
Cover IMF Working Papers
Measuring Carbon Emissions of Foreign Direct Investment in Host Economies
Maria Borga
,
Achille Pegoue
,
Mr. Gregory M Legoff
,
Alberto Sanchez Rodelgo
,
Dmitrii Entaltsev
, and
Kenneth Egesa
This paper presents estimates of the carbon emissions of FDI from capital formation funded by FDI and the production of foreign-controlled firms. The carbon intensity of capital formation financed by FDI has trended down, driven by reductions in the carbon intensity of electricity generation. Carbon emissions from the operations of foreign-controlled firms are greater than those from their capital formation. High emission intensities were accompanied by high export intensities in mining, transport, and manufacturing. Home country policies to incentivize firms to meet strict emissions standards in both their domestic and foreign operations could be important to reducing emissions globally.
Keywords:
Carbon emissions; foreign direct investment; input-output tables; A. carbon emissions; carbon intensity; emission intensity; FDI flow; carbon emission intensities of MNEs; Greenhouse gas emissions; Gross fixed investment; Exports; Manufacturing; Africa; Global
Cover IMF Working Papers
No Easy Solution: A Smorgasbord of Factors Drive Remittance Costs
Tito Nícias Teixeira da Silva Filho
There has been a global push to decrease the cost of remittances since at least 2009, which has culminated with its inclusion in the Sustainable Development Goals in 2015. Despite this effort and the emergence of new business models, remittance costs have been decreasing very slowly, disproving predictions that sharp declines would be just around the corner. In addition, remitting to poorer countries remains very expensive. Oddly, this situation has not been able to elicit academic interest on the drivers of remittance costs. This paper delved deeply into the remittances ecosystem and found a very complex, heterogenous and unequal environment, one in which costs are driven by a myriad of factors and where there are no easy and quick solutions available, which explains the disappointing outcome so far. Nonetheless, it also shows that while policymakers have limited room to act they still have a very important role to play.
Keywords:
remittance cost; remittances ecosystem; factors drive remittance; receiving country; remittance price; Remittances; Medium taxpayer office; Global; North America; Central America
Cover IMF Staff Country Reports
St. Vincent and the Grenadines: Request for Disbursement Under the Rapid Credit Facility-Press Release; Staff Report; and Statement by the Executive Director for St. Vincent and the Grenadines
International Monetary Fund. Western Hemisphere Dept.
An explosive volcanic eruption that began on April 9 is hitting St. Vincent and the Grenadines hard, creating an urgent balance of payments need and a humanitarian crisis as the country continues to deal with the fallout from the global pandemic. The economy is estimated to have contracted in 2020 by 3.8 percent as tourism activity fell 70 percent. Before the eruption, economic growth was expected to be flat in 2021, as the global pandemic continued, and tourism remained depressed. While there is considerable uncertainty about the evolution of the eruption, staff estimate the infrastructure damage to exceed 20 percent of GDP and for the economy to contract by 6.1 percent in 2021 with agriculture and related sectors severely affected.
Keywords:
St. Vincent and the Grenadines economy; Vincentian authorities; IMF support; expenditure measure; authorities plan; COVID-19; Balance of payments need; Natural disasters; Caribbean; Global
Cover Policy Papers
2019 Quota Data Update
International Monetary Fund. Finance Dept.
and
International Monetary Fund. Statistics Dept.
The paper presents summary results for the updated data set, with country-by-country details provided in Appendix I. In terms of broad country groups, the results of the data update are broadly consistent with trends observed in previous updates. The aggregate share of Emerging Market and Developing Countries (EMDCs) increased by 0.3 pp, to 50.0 percent, following a small decline in the EMDCs’ share recorded in the 2018 data update. The rising EMDC share reflected again foremost an increase for Asia. Most advanced economies recorded a small decrease in their calculated quota share using the current quota formula.
Keywords:
PP; openness variable; annexes advance; cutoff date; EMDC share; PPP GDP share; Purchasing power parity; Financial account; Labor unions; Monetary unions; Africa; Asia and Pacific; Global; Middle East; Western Hemisphere
Cover IMF Working Papers
Capital Flow Data – A Guide for Empirical Analysis and Real-time Tracking
Mr. Robin Koepke
and
Simon Paetzold
This paper provides an analytical overview of the most widely used capital flow datasets. The paper is written as a guide for academics who embark on empirical research projects and for policymakers who need timely information on capital flow developments to inform their decisions. We address common misconceptions about capital flow data and discuss differences between high-frequency proxies for portfolio flows. In a nowcasting “horse race” we show that high-frequency proxies have significant predictive content for portfolio flows from the balance of payments (BoP). We also construct a new dataset for academic use, consisting of monthly portfolio flows broadly consistent with BoP data.
Keywords:
WP; flow data; portfolio flow; debt flow; flow proxy; IMF balance of payments statistic; portfolio flows; fund flows; balance of payments; coincident indicators; IIF data; IMF balance of payments data; Capital flows; Stocks; Balance of payments statistics; Flow of funds; Emerging and frontier financial markets; Africa; Global