Demand for World Bank lending

Bridging the external financing gap has been an important factor in borrowing cgovernment's demand for World Bank loans. The demand for IBRD and IDA lending is positively related to an increase in debt service payments and inversely related to a borrowing country's level of reserves. These two variables explain a large part of the variation in IBRD and IDA lending commitments, not only since the Asian crisis but also during tranquil times over the past two decades. Borrowing to service debt during a crisis is consistent with the Bank's role as a lender of last resort as well as with its core development objectives, but such borrowing during tranquil times may conflict with the Bank's long-term objective ofreducing poverty. That investment lending commitments are related to debt service payments implies that aid may be more fungible than previously believed. If Bank lending is fungible and there is no guarantee that a particular Bank loan is financing an identified investment project or program, a case could be made for greater use of programmatic lending (with well-defined conditionality) As developing countries become larger and more integrated with volatile international capaital markets, there is also likely to be a greater need for fast-disbursing, contingent program lending facilities from the Bank.Economic Adjustment and Lending,Payment Systems&Infrastructure,Financial Intermediation,Economic Theory&Research,Banks&Banking Reform,Financial Intermediation,Banks&Banking Reform,Strategic Debt Management,Economic Theory&Research,Economic Adjustment and Lending

Complementarity between multilateral lending and private flows to developing countries : some empirical results

Despite the surge in private capital flows in the 1990s, lending by the multilateral development banks continues to be a significant source of external finance for low-income and lower-middle-income countries. And for middle-income countries, which receive the lion's share of private flows, multilateral lending has played an important stabilizing role during times of credit rationing. Even though multilateral loans may have behaved countercyclically with respect to private flows in the short term, these loans also tended to complement private flows in the medium term by signaling-and often fostering-a better investment environment in the borrowing countries.Banks&Banking Reform,Economic Theory&Research,Financial Intermediation,International Terrorism&Counterterrorism,Payment Systems&Infrastructure,Economic Theory&Research,Poverty Assessment,Economic Development,Macroeconomic Management,Banks&Banking Reform

Twin Deficits or Distant Cousins? Evidence from India

The twin-deficits theory has intrigued economists and policy-makers alike for the past few decades. In a Keynesian economy, budget deficit increases the absorption of the economy, causes import expansions, and thereby, worsens the trade deficit. It also causes domestic interest rates to rise, domestic currency to appreciate, and thereby, contributes to trade deficits. Using monthly data over 1998-2009 and the bounds testing approach to cointegration, we find evidence that the twin-deficits theory holds for India in the short-run. Evident of the Ricardian Equivalence Hypothesis (REH), it appears that no such relation exists the long run.Bounds-Testing, Budget Deficit, Fiscal Stimulus, India, Trade Deficit, Twin Deficits

Asian Financial Crisis and the J-Curve: Evidence from South Korea

Using an error correction version of an autoregressive distributed lag model, we investigate the dynamics of the Korean J-Curve against her eight trading partners. The strict version of the J-Curve is observed with a few major Korean trading partners, such as the U.S. and Indonesia. The estimation results from the Trade Balance Model and the Error Correction Model confirm that, after a depreciation of the Korean won, there has been a long-run adjustment toward the improvement of Korean trade balance against most trading partners. The findings are consistent over different sample periods, including before and after the financial crisis in 1997, and with different trading partners. After the Asian financial crisis, we find that the J-Curve relationship with Korean trading partners has become much more apparent than it was before the crisis.Bilateral Trade, J-Curve, Currency Crisis

Impact of the Global Financial Crisis on Migration and Remittances

Remittances to developing countries are estimated to have declined by 6.1 percent in 2009 as a result of weak job markets in major destination countries. Although new migration has fallen, it is still positive. The stock of international migrants, therefore, has continued to grow and remittances have remained resilient. Going forward, remittance flows to Latin America are expected to recover, whereas those to East Asia and South Asia are likely to slow. Policy responses should involve efforts to facilitate migration and remittances to make these flows cheaper, safer, and more productive for both the sending and the receiving countries.remittances, labor, developing countries, development, migration, migrants, financial crisis, Latin America, East Asia, South Asia

Unsupervised Classification of PolSAR Data Using a Scattering Similarity Measure Derived from a Geodesic Distance

In this letter, we propose a novel technique for obtaining scattering components from Polarimetric Synthetic Aperture Radar (PolSAR) data using the geodesic distance on the unit sphere. This geodesic distance is obtained between an elementary target and the observed Kennaugh matrix, and it is further utilized to compute a similarity measure between scattering mechanisms. The normalized similarity measure for each elementary target is then modulated with the total scattering power (Span). This measure is used to categorize pixels into three categories i.e. odd-bounce, double-bounce and volume, depending on which of the above scattering mechanisms dominate. Then the maximum likelihood classifier of [J.-S. Lee, M. R. Grunes, E. Pottier, and L. Ferro-Famil, Unsupervised terrain classification preserving polarimetric scattering characteristics, IEEE Trans. Geos. Rem. Sens., vol. 42, no. 4, pp. 722731, April 2004.] based on the complex Wishart distribution is iteratively used for each category. Dominant scattering mechanisms are thus preserved in this classification scheme. We show results for L-band AIRSAR and ALOS-2 datasets acquired over San Francisco and Mumbai, respectively. The scattering mechanisms are better preserved using the proposed methodology than the unsupervised classification results using the Freeman-Durden scattering powers on an orientation angle (OA) corrected PolSAR image. Furthermore, (1) the scattering similarity is a completely non-negative quantity unlike the negative powers that might occur in double- bounce and odd-bounce scattering component under Freeman Durden decomposition (FDD), and (2) the methodology can be extended to more canonical targets as well as for bistatic scattering.Comment: Accepted for publication at IEEE Geoscience and Remote Sensing Letter

Impact of migration on economic and social development : a review of evidence and emerging issues

This paper provides a review of the literature on the development impact of migration and remittances on origin countries and on destination countries in the South. International migration is an ever-growing phenomenon that has important development implications for both sending and receiving countries. For a sending country, migration and the resulting remittances lead to increased incomes and poverty reduction, and improved health and educational outcomes, and promote economic development. Yet these gains might come at substantial social costs to the migrants and their families. Since many developing countries are also large recipients of international migrants, they face challenges of integration of immigrants, job competition between migrant and native workers, and fiscal costs associated with provision of social services to the migrants. This paper also summarizes incipient discussions on the impacts of migration on climate change, democratic values, demographics, national identity, and security. In conclusion, the paper highlights a few policy recommendations calling for better integration of migration in development policies in the South and the North, improving data collection on migration and remittance flows, leveraging remittances for improving access to finance of recipient households and countries, improving recruitment mechanisms, and facilitating international labor mobility through safe and legal channels.Population Policies,Health Monitoring&Evaluation,Access to Finance,Voluntary and Involuntary Resettlement,Banks&Banking Reform

Spatio-temporal co-occurrence of alien and native molluscs : a modelling approach using physical-chemical predictors

The invasion of alien species can have serious economic and ecological impacts. Ecologically, invasions often lead to an increased rate of native species replacement and decreased biodiversity. A critical step in the dominance of alien species is their successful co-occurrence with native species. In this study, we assessed the occurrence of alien molluscs and their co-occurrence with native molluscs and identified the determining physical-chemical variables. We expected that a combination of some key variables of water quality could provide suitable conditions promoting alien molluscs to occur and to co-occur with native molluscs. The analyses were based on 20-year data, collected from river systems across Flanders (Belgium). Classification Trees (CTs) were used to perform the analyses and to develop the predictive models. Based on CT models, the co-occurrence of alien and native molluscs could be reliably predicted based on physical-chemical variables. However, there was insufficient data to determine the environmental conditions in which alien taxa dominate. From the past to the present, spatial co-occurrence significantly increased. Sinuosity, ammonium and nitrate concentrations, chemical oxygen demand, pH and conductivity were the key determining variables. Our findings suggest that the co-occurrence of alien and native molluscs mainly occurs in straight rivers with good chemical water quality. These results provide insights into the ecology and behaviour of alien species which could support management practices and priority setting for conservation planning in surface waters of Flanders and Europe

Shadow Sovereign Ratings

Sovereign ratings are a necessary condition for countries to fully access international capital. Even if the sovereign government is not issuing bonds, the sovereign rating often acts as a ceiling for the private sector and can influence its international capital market access. However, 58 developing countries are still not rated by Standard and Poors, Moodys, and Fitch, the three international credit rating agencies. This premise presents an exercise to predict shadow sovereign ratings to estimate where unrated countries would lie on the credit spectrum if they were rated. Contrary to popular perception, unrated countries are not necessarily at the bottom of the rating spectrum.AAA, credit ratings, moody's, fitch, standard and poors, credit, credit ratings, World Bank, developing countries, soverign debt

Remittances and natural disasters : ex-post response and contribution to ex-ante preparedness

Macro- and micro-economic evidence suggests a positive role of remittances in preparing households against natural disasters and in coping with the loss afterwards. Analysis of cross-country macroeconomic data shows that remittances increase in the aftermath of natural disasters in countries that have a larger number of migrants abroad. Analysis of household survey data in Bangladesh shows that per capita consumption was higher in remittance-receiving households than in others after the 1998 flood. Ethiopian households that receive international remittances seem to rely more on cash reserves and less on selling household assets or livestock to cope with drought. In Burkina Faso and Ghana, international remittance-receiving households, especially those receiving remittances from high-income developed countries, tend to have housing built of concrete rather than mud and greater access to communication equipment, suggesting that they are better prepared against natural disasters.Population Policies,Natural Disasters,Remittances,Debt Markets,Small Area Estimation Poverty Mapping