The impact of the strong euro on the real effective exchange rates of the two Francophone African CFA Zones

The author estimates the degree of misalignment of the CFA franc since the introduction of the euro in 1999. Using a relative purchasing power parity-based methodology, he develops a monthly panel time series dataset for both the Economic and Monetary Community of Central Africa (CEMAC) zone and the West African Economic and Monetary Union (UEMOA) zone to compute a trade-weighted real effective exchange rate indexed series from January 1999 to December 2004. The author's main finding is that the real effective exchange rate appreciated by close to 8 percent in UEMOA and 7 percent in CEMAC, influenced by volatility in the euro-dollar bilateral exchange rate and conservative monetary policies in the two zones, resulting in a partial loss of competitiveness in export markets. The lower appreciation in Central Africa can be explained by lower inflation in CEMAC than in UEMOA and by the greater trade with higher inflation East Asian countries, partially offset by the peg to the dollar. However, the inclusion of"unrecorded trade"results in an appreciation of only 6 percent in the UEMOA zone and 6 percent in the CEMAC zone due to higher inflation in the two countries with unmonitored cross-border flows, Ghana and Nigeria. Using time series econometrics, an Engle-Granger two stage procedure for cointegration, and an error correction framework, a single equation modeling of the real exchange rate from 1970 to 2005 as a function of terms of trade, economic openness, aid inflows, and a dummy representing the 1994 devaluation, the author finds little statistical evidence of a long-run equilibrium exchange rate that is a vector of economic fundamentals. The dummy explains most of the real exchange rate behavior in the two zones, while openness in UEMOA has contributed to an appreciation of the real effective exchange rate.Economic Stabilization,Economic Theory&Research,Macroeconomic Management,Fiscal&Monetary Policy,Free Trade

What happens when a country does not adjust to terms of trade shocks? the case of oil-rich Gabon

Gabon is currently one of the richest countries in Sub-Saharan Africa, having a GDP per capita of close to $4,000, and is characterized by a stable political climate and rich forestry and mineral resources, aswell as a small population. Oil is the key economic sector, accounting for half of GDP and more than two-thirds of revenue. Discovered in the 1970s, oil windfalls have delivered spectacular wealth and financed public expenditure over two decades. However, the oil boom has led to the Dutch disease and the shrinkage of the industrial and agricultural sectors of the economy due to the appreciation of the exchange rate and the movement of capital to the oil sector. But with output projections suggesting that oil will be depleted within the next 10 to 15 years, there are growing pressures on the policymakers to take actions to diversify production. While Gabon's membership in the Central African economic and monetary union means that it benefits from the macroeconomic stability from a common external trade and fixed exchange rate regime pegged to the euro, it relinquishes independence in the policy response to shocks. An analysis using a quantitative methodology to decompose responses to shocks shows that Gabon's adjustment to adverse movements in the terms and trade from 1980 to 2000 was considerably weak in terms of three performance indicators-import intensity, economic compression, and nonoil export promotion. While the economy's growth rate was respectable, policymakers postponed adjustment by resorting to considerable borrowing during this period. While there was some decrease in import intensity from 1987 to 1990 and 1996 to 2000, as well as slight non-oil export diversification from 1996 to 2000, the government borrowed from commercial banks and donors, causing its external debt/GDP ratio to increase from 30 percent of GDP in 1970-76 to 80 percent in 1999. To pay the debt service, it currently has to maintain large primary surpluses. Only since 1996 has there been significant fiscal retrenchment and a freezing of government wages.Economic Theory&Research,Environmental Economics&Policies,Labor Policies,Payment Systems&Infrastructure,Fiscal&Monetary Policy,Environmental Economics&Policies,Economic Theory&Research,TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Economic Stabilization,Achieving Shared Growth

Revenue and the fiscal impact of liberalization : the case of Niger

Using data collected during several missions, the author finds that the principal reasons for low revenue mobilization are (1) the adverse fiscal impact of trade liberalization, (2) the defiscalization of agriculture in the 1970s, (3) the collapse of the uranium boom in the 1980s, and (4) the poor record of the VAT in mobilizing revenue. The large reduction in tariffs during the 1980s and 1990s in the context of structural adjustment programs and West African regional integration initiatives had adverse effects on trade tax revenue during the period 1980–2003. But higher import levels after 1994 succeeded in partially mitigating the revenue losses. The experience of Niger shows that without accompanying macroeconomic policies, parallel improvements in tax and customs administration, and success in mobilizing domestic taxes, most notably the VAT, trade reform can have adverse fiscal consequences. Using a SMART model partial equilibrium analysis developed by UNCTAD for researchers and negotiators at multilateral trade rounds, the author simulated three different tariff shocks to test the fiscal and trade implications of additional trade liberalization in Niger. First, the preferred tariff regime in terms of overall fiscal and job creation impact was the harmonized Swiss formula in contrast to a 10 and 15 percent uniform tariff. Second, a possible Regional Economic Partnership Agreement (REPA) between the European Union and l'Union Economique et Monetaire Ouest-Africaine (UEMOA) by 2015 that would abolish duties on EU imports to the UEMOA countries would have negative fiscal effects on Niger of more than 1 percent of GDP, positive effects on trade creation of about 1.5 percent of GDP, and ambiguous effects on local industry. While there will be some welfare gains for consumers and importers from lower import tariffs and the possibility of trade creation, the fiscal losses and adjustment costs would be significant, particularly in the machinery and transport sectors. Third, there are asymmetric gains and losses from regional integration and tariff changes, and a 10 percent uniform tariff would have the greatest impact on Benin and Senegal and some impact on Niger and Togo. In sum, further trade liberalization in Niger will have significant fiscal costs, partially offset by trade creation through increased imports.Public Sector Economics&Finance,Economic Theory&Research,Trade Policy,Environmental Economics&Policies,Export Competitiveness,Trade and Regional Integration

Cancer biomarker development from basic science to clinical practice

The amount of published literature on biomarkers has exponentially increased over the last two decades. Cancer biomarkers are molecules that are either part of tumour cells or secreted by tumour cells. Biomarkers can be used for diagnosing cancer (tumour versus normal and differentiation of subtypes), prognosticating patients (progression free survival and overall survival) and predicting response to therapy. However, very few biomarkers are currently used in clinical practice compared to the unprecedented discovery rate. Some of the examples are: carcino-embryonic antigen (CEA) for colon cancer; prostate specific antigen (PSA) for prostate; and estrogen receptor (ER), progesterone receptor (PR) and HER2 for breast cancer. Cancer biomarkers passes through a series of phases before they are used in clinical practice. First phase in biomarker development is identification of biomarkers which involve discovery, demonstration and qualification. This is followed by validation phase, which includes verification, prioritisation and initial validation. More large-scale and outcome-oriented validation studies expedite the clinical translation of biomarkers by providing a strong ‘evidence base’. The final phase in biomarker development is the routine clinical use of biomarker. In summary, careful identification of biomarkers and then validation in well-designed retrospective and prospective studies is a systematic strategy for developing clinically useful biomarkers

Semiconformal symmetry- A new symmetry of the spacetime manifold of the general relativity

In this paper we have introduced a new symmetry property of spacetime which is named as semiconformal curvature collineation, and its relationship with other known symmetry properties has been established. This new symmetry property of the spacetime has also been studied for non-null and null electromagnetic fields

Labour Market Participation of the Elderly

Generally ageing of population is defined as the relative increase in the number of elderly. This process is the result of declining fertility and increasing life expectancy of elderly population. In today’s Pakistan, fertility has started declining and life expectancy of elderlies has been increasing and it is expected that in future both these processes will gain momentum, resulting into many fold increase in the population of elderly people [Afzal (1999); Sathar and Casterline (1998)]. These developments are expected to have adverse effects on Pakistan’s economy as support and welfare of elderly people will require additional allocation of resources. That is more so because traditionally welfare and socio-economic needs of elderly people remained the responsibility of their children especially the sons. However, the traditional extended/joint family system is fast breaking down and nuclear type of family set up is becoming more common rendering the elderly people helpless [Ali (2000)]. Moreover, in view of an increase in the incidence of poverty in Pakistan, intra-house resource distribution is also becoming scarce leading to a scenario where only productive members are the chief beneficiaries [Qureshi and Arif, (2001)]. On the other hand in Pakistan, the social sector also remained neglected and little progress has been made in the development of health, education, nutrition, housing and physical infrastructure. Moreover, social security and pension scheme for general public is also almost non-existent. Such a situation warrants development of policies especially for elderly people in general and for all those elderlies who can participate and contribute in the economic activities in particular so that economic well-being of these people is ensured.