Poverty simulations suggest that the COVID-19 pandemic and the measures implemented by the government to contain the spread of the virus will increase the number of poor in the country. As such, various social safety nets were implemented by both the national and local government agencies to help the affected individuals, families, and enterprises cope with the economic effects of COVID-19 and to smoothen their consumption particularly during the initial stages of the national lockdown, albeit temporarily.
We are continuing to seek our Shadow Board members' views on whether the Official Cash Rate (OCR) should be negative and if the Reserve Bank should expand its quantitative easing (QE). Board members once again saw a reduced need for a negative OCR and further QE over the coming year. The expected implementation of a Funding for Lending programme (FLP) by the Reserve Bank was highlighted by some Board members as an influence on their view about the need for further stimulus. The Reserve Bank has indicated it was likely to implement the programme to offer secure long-term funding at low interest rates to banks by the end of this year. The aim of the FLP was to reduce borrowing costs for households and businesses in order to encourage them to borrow and invest. Shadow Board members continue to highlight the challenges facing New Zealand as it navigates the post-COVID recovery. However, members generally remain sceptical about the effectiveness of a negative OCR to stimulate the economy.
Countries around the world are increasingly alert to the potential social and financial benefits of Central Bank Digital Currencies (CBDCs), which are sovereign cryptocurrencies. ASEAN should start thinking of a regional-digital currency to stay ahead and deepen regional economic integration.
Annual reports generally look outwards. They are usually meant to showcase an organisation's yearly performance mostly for outsiders: general public, supporters, partners, donors etc. Consequently, most of them fall in the category of promotional literature. The Sustainable Development Policy Institute (SDPI) has taken a different route this year: Our annual report for 2019 speaks as much to others as it does to the organisation itself. Not as a monologue but as a conversation. Not as a reverie but as an exchange of ideas. Questionnaires were circulated, templates were moved around and discussions were held to achieve that objective. The outcome is this document that aims simultaneously at introspection and prognosis.
This policy note explores options for building greater financial resilience among DAOs and CDCs. Financial resilience describes the ability to anticipate, absorb, and react to financial shocks. The analysis argues that the COVID-19 crisis has highlighted a lack of financial resilience in many municipalities and outlines a two-step process for strengthening resilience, which cities hoping to insure themselves against future crises can consider.
Restoring its territorial integrity, the Republic of Azerbaijan has entered a new era. The state authorities have to carry out restructure and infrastructure building tasks in the liberated territories to provide energy, utilities, transport infrastructure, and create conditions for life and business of citizens returning to their native lands. Therefore, one of the main features of the state budget for 2021 is the creation of financial security to implement the aforementioned honorable and responsible tasks. Along with their implementation, the budget for 2021 envisages the creation of financial guarantees for further improvement of the people's welfare, sustainable economic development, and implementation of state programs.
Given Myanmar's geographical proximity to China, and with China embarking on its "going out" policy, Myanmar's importance to China's geopolitics has risen significantly in recent times. By the end of the military junta-era, China had already become one of Myanmar's most crucial investors. This led to growing concern about the nature of these investments. Since 2011, the top-down transition in Myanmar posed severe concerns for China's investments in Myanmar. After the NLD-led government took power in 2016, China's investments has proceeded at a moderate pace. This paper seeks to address two key questions: What are the motivations behind China's Outbound Direct Investment (ODI) in Myanmar and what are the prospects of China's mega-projects in Myanmar?
The 1997–1998 Asian financial crisis and the 2007–2008 global financial crisis highlighted the need for global and regional financial safety nets to safeguard financial stability and enhance resilience to future crises. Over the past decade, Asian economies have made progress in establishing financing arrangements to strengthen the region's financial safety net. These arrangements have enhanced regional macroeconomic and financial surveillance, strengthened crisis management, and bolstered cooperation for financial stability and resilience. This report examines the evolution and the toolkits of regional financing arrangements and assesses the Asian Development Bank's role in providing crisis response mechanisms through its policy based lending facilities.
The NZIER has been collecting information about the confidence of New Zealand businesses since 1975. We publish the results in the NZIER Quarterly Survey of Business Opinion (QSBO). When we reported that business confidence had fallen dramatically in late 2017, the Government, the Opposition, the press and all the other economists in New Zealand had a view on what this meant. Depending on who you talked to, the results were meaningless, a harbinger of doom, another example of the vast right-wing conspiracy or an interesting example of the views of businesses that provided some insights into how parts of the economy were tracking. Our own take is the QSBO is an important measure when interpreted carefully, but shouldn't be viewed in isolation of other data when making predictions. Given the level of interest in this topic, we have undertaken some more detailed analysis of the QSBO.
Discussion about the potential for a recession to hit at least one of the major economies has intensified in recent months. The US Federal Reserve has become more cautious about the outlook for the US economy, and over the past year has moved from a hiking bias to cutting interest rates. Here in New Zealand, the Reserve Bank embarked on another easing cycle by cutting the Official Cash Rate (OCR) at its May meeting and followed up with a 50 basis points cut at its August meeting. We look at what current conditions are telling us about the state of the New Zealand economy, and by considering the common indicators of a recession discuss how worried we should be. We also look at the levers available to try and combat the effects of a recession.
Korea and Vietnam have maintained more than 25 years of diplomatic relations. During the periods remarkable progress has been made in improving and upgrading their ties. A strategic partnership was signed between the two countries in 2009 in addition to free trade commitments under the framework of the ASEAN-Korea agreement (AKFTA). As a result, the trade and investment between Vietnam and Korea has increased exceptionally. Moreover, Vietnam's growth potential has been highly estimated due to favorable economic conditions such as increase in FDI inflow, multi- and bilateral FTAs, the establishment of the ASEAN Economic Community (AEC) and so on. With its abundant low-wage workers, political stability, large-scale population also serving as positive factors for investment attraction into Vietnam, Korea's investments to Vietnam are rapidly increasing.
This report is the third instalment of CPD's flagship programme titled "Independent Review of Bangladesh's Development (IRBD)". The report presents a detailed snapshot of the current state of the national economy and flags the emerging challenges facing the economy. Earlier instalments, released in January and April of 2016, provided an interim assessment of the state of the current economy and concerns regarding the upcoming budget for FY2017. The IRBD exercise to be carried out in this fiscal year will also include an immediate assessment of the upcoming FY2017 national budget, to be released on 3 June 2016 (the day after the national budget is set to be presented at the national parliament). Based on latest national and global micro- and macroeconomic data and information, this report presents CPD's assessments as regards the performance of the economy in FY2016, and the tasks to be addressed in view of the emerging macroeconomic and sectoral scenarios. Discussion of the state of the economy is segmented into following sections which are focused on GDP growth and private investment (Section II), fiscal and budgetary framework (Section III), financial sector performance (Section IV), and the external sector dynamics (Section V). Two thematic issues of current relevance are also discussed in detail; these concern recent crop sector dynamics and policy responses (Section VI), and labour market dynamics and performance (Section VII). The final section closes the report with some concluding remarks.
As the world economy becomes integrated and foreign investment becomes liberalized, most governments compete to attract foreign direct investment (FDI) to their country based on the belief that foreign firms bring advanced technology, create jobs, and boost economic growth. Also, since FDI is one of the most stable capital flows, unlike capital flows in the stock and bond markets, it holds particular importance for developing countries. For these reasons, the determinants of FDI have been broadly studied from a variety of perspectives. Since FDI is determined by the behavior of multinational companies (MNEs), the motive behind the investment from the perspective of the investing firm is relevant. The first motive for FDI is to serve the local market by substituting exports from home to host country, called horizontal FDI. In this case, local market size and purchasing power strongly impact the location choice of MNEs. The second motive for FDI is to gain access to production factors including natural resources, raw materials, and human resources, called vertical FDI. In this case, availability of resources and lower factor costs play important roles. The third and last type of FDI is to relocate certain parts of production, produce goods, and then export them to third countries, which is called export-platform FDI. Since the main reason firms seek export-platform FDI is to save production and trade costs, low labor costs, lax market regulations, and trade openness are crucial determinants.
