Proceedings of the Conference on Human and Economic Resources

The ECO (Formerly Regional Cooperation for Development=RCD) was established in 1985 as a trilateral organization of Iran, Pakistan and Turkey to promote multi dimensional regional cooperation to create conditions for sustained socioeconomic growth in the Member States. Following the amendment in the Treaty of Izmir (as the legal framework for the RCD), ECO was fully launched in early 1991. In 1992, the Organization was expanded to include seven new members, namely: Afghanistan, Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan. The date of the Organization’s expansion to its present position, 28th November, is being observed as the ECO Day. Over the past 13 years the member states have been collaborating to accelerate the pace of regional development through their common endeavors. Besides cultural and historical interdependence, they have been able to use the existing infrastructural and business links to strengthen their major economic decisions. ECO has started several projects in priority sectors of its cooperation including energy, trade, transportation, agriculture and drug control. In this study, we evaluate the performance of ECO with emphasis on Foreign Direct Investment (FDI) and propose the appropriate policies for its future. Despite of this reality that ECO members have great similarities, but they are politically disaggregated. We try to consider economic and political factors simultaneously. Based on formal data in 2004, ECO members had over than 380 million people (almost 6% of world population) that mean a potential market with EU market size. However, the per capita GDP in $US was$1548 that constituted about one-fourth of world average. Also, the unemployment rate in the region was relatively high (5.8%). This trend may be worsening because the average population growth rate (1.7%) is higher than world average. On the other hand, total FDI in the ECO countries was 9 billion dollars in 2004(only 1.4% of total FDI in the world). So, to appraisal the FDI trends in the ECO countries, we need to consider the main factors affecting FDI. Some of these factors are per capita GDP, exchange rate, openness ratio, inflation rate, external debt and ICRG risk factor. We will apply the econometric methods (Generalized Least Squares +fixed or random effects) with panel data over the 1992-2005 period. In this regard, the related tests including unit root test, Hausman test, Normality test… will be provided. It is expected that increases in per capita GDP, openness ratio and exchange rate(as devaluation form) will raise FDI, but inflation rate, accumulated external debt ,economic and political risks will decrease the FDI in the region. Based on our conclusions, ECO members can benefit from their different relative advantages including large market for own and foreigners, tourism, historical and cultural linkages, idle capacities(including young and unemployed people) and various natural resources(mineral and non-mineral resources); and reach to sustainable development if they manage their possibilities and potentials; and provide the context to attract FDI without considering some dilemmatic political or religious resistances and pressures.ECO, RCD, FDI, panel data, GLD, fized effects, random effects

The relationships between interest rates and inflation changes: An analysis of long-term interest rate dynamics in developing countries

Interest rates lie at the centre of monetary policy, not just as passive reflectors on money supply but rather as one of the main policy instruments. Interest rates have played a central role macroeconomic policy. In developing countries, interest rates have also enjoyed high popularity as policy instruments. For instance, high interest rate has been an essential component of many stabilization programs in countries with chronic inflation during the 1980s. This paper deals with theoretical and empirical aspects of the interactions between interest rates and inflation in developing countries. In the theoretical part reviewing literature revealed that many researchers argue that increasing inflation rate results in increasing interest rate. It is also argued that increasing product costs by increasing interest rate raises product’s prices and consequently inflation. This research examines the causal relationship between the interest rate and inflation rate in a panel of 40 selected Islamic countries using new causality approach and applying panel data methodology over the 2002 – 2005 periods. The results of this study show a unidirectional causality from interest rate to inflation rate in 40 Islamic countries. The findings have practical policy implications for decision makers in the area of macroeconomic planning particularly in Islamic countries. The results imply that banks must reduce interest rate to decrease the inflation

Socioeconomic Factors Affecting Informal Payments in the Health Sector

<p>Informal payments are a signifi cant source for fi nancing health systems in many developing and transition countries. The aim of our study was the assessment of the infl uence of patients’ socioeconomic status on their informal payment for health care. This article presents a cross-sectional and applied research that was conducted in a general public hospital in Iran during April 2014. The population of the study was all the 1,035 patients discharged during April 2014. Data gathering was done using a questionnaire. An ordered logistic regression model based on a truncated method was estimated to investigate factors affecting informal health payments. About 48% of respondents reported at least one experience of informal payment for health care during the previous year. The results showed that the patients’ socioeconomic status can signifi cantly affect the likelihood and frequency of informal payments for health care. Older people, members of small and wealthier families, employed persons, and those who are under coverage of only basic medical insurance are more at risk of making such payments. Policymakers should pay more attention to such socioeconomic groups in order to improve the effectiveness of policies.</p