Africa's Silk Road Broadman, Harry G; Isik, Gozde
2006, 11-02-2006, 2007
eBook, Book
Open access
China and India's new-found interest in trade and investment with Africa - home to 300 million of the globe's poorest people and the world's most formidable development challenge - presents a ...significant opportunity for growth and integration of the Sub-Saharan continent into the global economy. Africa's Silk Road finds that China and India's South-South commerce with Africa is about far more than natural resources, opening the way for Africa to become a processor of commodities and a competitive supplier of goods and services to these countries - a major departure from its long established relations with the North. A growing number of Chinese and Indian businesses active in Africa operate on a global scale, work with world-class technologies, produce products and services according to the most demanding standards, and foster the integration of African businesses into advanced markets. There are significant imbalances, however, in these emerging commercial relationships. These can be addressed through a series of reforms in all countries:"At-the-border" reforms, such as elimination of China and India's escalating tariffs on Africa's leading exports, and elimination of Africa's tariffs on certain inputs that make exports uncompetitive "Behind-the-border" reforms in Africa, to unleash competitive market forces and strengthen its basic market institutions "Between-the-border" improvements in trade facilitation mechanisms to decrease transactions costs Reforms that leverage linkages between investment and trade, to allow African businesses to participate in global production networks that investments by Chinese and Indian firms can generate.
As the world marketplace becomes ever more globalized, much is at stake for the prosperity of hundreds of millions of people in Europe and Central Asia as the regions transition process continues ...through its second decade. Understanding the underlying dynamics shaping the contours and most salient impacts of international integration that have emergedand likely to emerge prospectivelyin the region is thus a crucial challenge for the medium term economic development agenda, not only for policymakers in the countries on themselves, but also for their trading partners, the international financial institutions, the donor community and the future of the world trading system as a whole. This book addresses this challenge.
Foreign direct investment (FDI) has played a major role in China's push towards a market-oriented economy. From the advent of reform in 1978 to 1995, China has received $128.1 billion in FDI. ...However, while China's record in attracting foreign capital in the past decade has been impressive, potential problems exist. First, the pattern of FDI in China is highly geographically concentrated. Of the total amount of FDI that China has received since 1989, the coastal areas' share has been over 90%. Equally important is that the sectoral composition of FDI within China is uneven. The lion's share of FDI has been concentrated in the real estate sector, especially hotels and other tourism-related projects. Although much has been written describing China's overall achievement in attracting foreign investment and the general pattern of Chinese FDI, little work has been done analyzing quantitatively the geographical and sectoral attributes of such investment. The locational and sectoral determinants of FDI within China are assessed empirically. An overview is presented of the recent trend in the flow and stock of Chinese FDI, placing it in the worldwide and regional contexts.
While many industrial firms in Russia have undergone ownership change, relatively few have competitively restructured. This paper, using survey and other data, suggests much of Russian industry is ...immune from robust competition due to seller/buyer concentration in select markets, a high degree of vertical integration, and geographic segmentation. Regulatory constraints protect incumbent firms from entrants, both domestic and foreign. The absence of new businesses is striking. Restructuring anti-competitive structures and reducing barriers to entry should be key items in Russia's post-privatization program, and the paper sketches out a reform agenda. The nascent rules-based framework for competition policy should be strengthened to reduce discretion, increase transparency and enhance accountability.
The state industrial sector is the Achilles heel of China's otherwise remarkable economic performance over the past two decades. Most other countries in transition from socialism have transformed ...SOEs into commercial entities through systematic, market‐driven restructuring and privatisation to become more efficient and competitive. In China, a series of innovative, if often administrative, insitutional reforms since 1978 have begun to achieve the Chinese authorities' goal of ‘separating governemtn from business.’ But the Chinese State still maintains ownership of key enterprises, and government agencies carry out shareholder functions typically performed by private owners in a market economy. Although privatisation and restructuring of SOEs is occurring, it mostly pertains to small and medium sized firms. For the principal businesses, by contrast, the creation of large state enterprise groups and holding companies (and experiments in other forms of ‘state asset management’) have become the main form of restructuring. Today, China's SOEs still account for more than one‐quarter of national production, two‐thirds of total assets, more than half of urban employment and almost three‐quarters of investment. While direct budgetary subsidies have declined, explicit and implicit subsidies are still making their way to prop up loss‐making SOEs through the financial system and other routes. At the same time, SOEs are still producing non‐marketable products, resulting in a sizeable inventory overhang. These inefficiencies and distortions represent a drain on the country's resources and thus present a challenge to the Chinese leadership for reform. This paper sheds light on these challenges by analysing the incentives and constraints on China's SOE reform programme. Four critical aspects of the reforms are highlighted and evaluated against the backdrop of international experience: clarification of property rights; establishment of large group/holding companies and other new organisational structures; improved corporate governance incentives; and implementation of international financial accounting and auditing practices. The paper concludes with policy recommendations.
Building Market Institutions in South Eastern Europe—a study of impediments to investment and private sector development in Albania, Bosnia and Herzegovina, Bulgaria, Croatia, the former Yugoslav ...Republic of Macedonia, Moldova, Romania, and Serbia and Montenegro—yields fundamentally new insights for improving the region’s business environment, economic development, and prospects for growth. It focuses on four core topics: Business competition and economic barriers to entry and exit Access to regulated utilities and services Corporate ownership, transparency of business accounts, and access to finance Mechanisms for commercial dispute resolutionEach topic is empirically investigated across all eight South Eastern European countries through the systematic use of data from multiple sources: Official data from each country in the region Results from two annual rounds of quantitative, firm-level surveys covering 1,600 firms Results from 40 originally developed enterprise-level business case studiesThe result is an innovative analysis of cross-country comparisons and the development of key policy challenges from a regional perspective. Building Market Institutions in South Eastern Europe, a collaborative effort between the World Bank and the European Bank for Reconstruction and Development, offers important practical insights for all policymakers and observers concerned with the future of South Eastern Europe. It makes concrete recommendations for reforms that would ease the constraints on domestic and foreign investment, an essential step in sustaining growth and reducing poverty in the region.
This paper examines the impact of improved trade facilitation measures and institutional capacity in a set of economies in transition Europe. Our results suggest that behind-the-border barriers play ...an important role in determining bilateral trade flows (controlling for the effects of tariffs, development levels, distance, and regional characteristics of exporters and importers, among other factors). For European Union (EU) members that joined the Union in 2004 and less developed and candidate members raising capacity in port efficiency and information technology infrastructures halfway to the EU-15 average, trade could expand by US$49 billion and US$62 billion respectively. In the context of the economic crisis and fragile recovery, as well as efforts to strengthen Europe integration, efforts to facilitate trade with investments to raise capacity in trade facilitation should be considered as part of policy steps going forward.
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