Kazakhstan is facing its greatest economic challenge since the global crisis. With oil prices at US$50 per barrel, the country urgently needs to adjust its economic model and find new sources of economic growth.
... See More + Kazakhstan main export has been crude oil, considered a low-complexity mineral products, which has made the country extremely vulnerable to shocks. For Kazakhstan to reach high income status it will need to move up the value chain and find new sources of growth. However, new opportunities are arising. China's new Silk Road initiative, renewed regional integration efforts through the Eurasian Economic Union, CAREC and WTO accession are opening up new prospects for Kazakhstan to integrate more successfully with the region and the world and to position itself as a key trade and transit corridor between Asia, Europe, and the Middle East. While Kazakhstan outperforms its regional peers in terms of overall business environment, it still ranks poorly in trading across borders. Kazakhstan is embarking on an economic transformation at a time where new global trends are reshaping economic fundamentals. As countries in Asia and Europe enhance their living standards, opportunity costs will matter more than direct transport costs, resulting in increasing opportunities to transport goods from East Asia to Europe.
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This paper investigates China's influence on local economic development in 37 African countries between 1997 and 2007. The analysis compares the average changes in economic growth, migration, spatial inequality, and welfare for mineral-rich districts, pre- and post-accession, to the corresponding changes in districts without any mineral endowment.
... See More + Using this exogenous variation, the paper shows that over 2002-07, mining activities in response to the global commodity price boom increased welfare as measured by spatial Sen Index but were insignificant for local economic growth, migration, and spatial inequality. The findings suggest that policy needs to do more to improve the local benefits of positive external shocks (such as China's World Trade Organization accession): it is not enough to assume, given Africa's high spatial inequality, that local economies will automatically benefit from higher national growth.
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Policy Research Working Paper WPS7906 DEC 05, 2016
Ratings for the Customs Development Project for Kazakhstan were as follows: outcomes were moderately unsatisfactory, the risk to development outcome was negligible, the Bank performance was moderately unsatisfactory, and the Borrower performance was also moderately unsatisfactory.
... See More + Some lessons learned included: Information Communication Technology (ICT) project management design overestimated the implementing agency’s capacity to manage procurement and ICT procurement in particular. monitoring and evaluation arrangements should lay out the source and methodology for calculating the values of the development objective indicators and describe the results chain linking project activities, outputs and outcomes. Customs Development Project (CDP) relied on counterpart funding to cover almost 70 percent of project costs with a relatively modest Bank contribution. Macroeconomic risks were underestimated. Lack of counterpart financing effectively stopped CDP implementation when Kazakhstan faced a steep decline in oil prices and cuts in revenues. Project design should ensure arrangements that engage policy making levels of Government throughout project implementation so that institutional reform and legislative requirements can be addressed when needed to support the reforms.
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Implementation Completion and Results Report ICR3820 JUN 15, 2016
As a small and open economy, Belarus' development perspectives are intrinsically linked to its ability to produce and sell goods and services competitively in the global marketplace.
... See More + While Belarus is an open economy, its trade links are concentrated both in terms of products and markets. Mineral goods –most importantly refined oil and potassium chloride - are the main export product accounting for more than 1/3 of total exports. Non mineral exports, including most importantly machinery, vehicles and transport equipment are mostly exported to Russia and other CIS markets, which account for 74 percent of non-mineral exports while the share of EU countries in Belarus non-mineral exports account for less than 15 percent. With Russia's WTO accession in 2012 competitive pressures on Belarus’ major market for non-mineral exports have further intensified. As Belarus is accelerating its own negotiations with the WTO, understanding the challenges and opportunities faced by the country's exporters is critical to putting in place an effective adaptation strategy that will enhance competitiveness and ensure Belarus can take full advantage of more open market access. The objective of this note is to analyze the economic impacts of Belarus' potential accession to the WTO. The note utilizes a modern computable general equilibrium model of the economy of Belarus to simulate impacts on the economy as a whole and on individual sectors.
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This paper surveys empirically the broad features of trade policy in goods for 31 major economies that collectively represented 83 percent of the world's population and 91 percent of the world's GDP in 2013.
... See More + It addresses the following five questions: Do some countries have more liberal trading regimes than others? Within countries, which industries receive the most import protection? How do trade policies change over time? Do countries discriminate among their trading partners when setting trade policy? Finally, how liberalized is world trade? The analysis documents the extent of cross-sectional heterogeneity in applied commercial policy across countries, their economic sectors, and their trading partners, over time. It concludes that substantial trade policy barriers remain as an important feature of the world economy.
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Policy Research Working Paper WPS7620 APR 04, 2016
An efficient and transparent regulatory framework governing international trade is a necessary condition for countries to realize the benefits of international trade.
... See More + Over the last decade, Lao PDR has been deepening its economic ties with the global economy through the formal accession to the WTO in 2013. At the regional level, the country is committed to be full member of the ASEAN Economic Community. These agreements entailed profound changes to Lao PDR’s regulatory framework governing international trade. This report provides an overview of the incidence on NTMs on import flows in Lao PDR before and after WTO accession and identifies lingering regulatory hurdles that may still hamper the ability of the country to reap the gains of a deeper integration. Employing detailed and comparable NTM information, this note characterizes the changes in the trade related regulatory framework in Lao PDR and compares the current scheme with that of other countries in Asia. The report also combines econometric estimations of Ad-Valorem Equivalents (AVEs) of NTMs with qualitative information collected through fieldwork to identify priority measure to streamline. This report is organized as follows. Section two discusses main conceptual issues and presents the data and metrics to examine the role of NTMs in import flows. Section three, describes the trade incidence of NTMs and compares it with similar countries and with the situation prior to WTO accession. Section four combines an econometric technique with qualitative information to discuss the stringency of NTMs. Section five presents some concluding remarks and provides some recommendation for reform.
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In 2015, Lao PDR is virtually unrecognizable from what it was just a decade ago. A more open, more outward trade landscape has transformed the country from a closed-off backwater into a fast-growing developing country, complete with coffee shops, restaurants, and billboards lining the streets of what is now a much busier and more lively Vientiane.
... See More + Rural-urban migration is underway as non-agricultural opportunities are on the rise. Importers and exporters are experiencing an increasing level of government transparency. Customs operations are nearly fully automated and border clearance times have been drastically reduced. As a crowning achievement—and after 15 years of negotiations, Lao PDR is now a member of the World Trade Organization (WTO), with its eyes set on establishing itself as an equal partner in the Association of Southeast Asian Nations (ASEAN) Economic Community (AEC). The situation has improved to such an extent that the country has become a model for other Least Developed Countries (LDCs) undertaking trade reform. Optimism is in the air, and reformers know that having come so far there is still a tremendous amount to be done. Within the context of a complex and largely incomplete transition from a planned to a market economy, the strides taken by the Lao government in the relatively niche area of trade policy reform and trade facilitation merit attention. The country still has many visceral challenges to overcome. Trade reform is much less visible, quite often not a front-page story, and rarely capable of changing people’s fortunes overnight. Rather, it is a process of deliberate, subtle changes that over time provide the atmosphere for a country to bloom, and Lao PDR is blooming. Understanding the scope and scale of reform that has occurred in order for the country to reach this point is not always easy. Without looking back over the last few years, without peering deeper into the structures that have changed, it is possible to miss just how remarkable this story truly is.
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Suppose that when addressing the question of “what’s left for the WTO?,” tariff negotiators relied not on the agenda established in 2001 but instead on the terms-of-trade theory of trade agreements to identify negotiating priorities.
... See More + This paper uses the lens of the terms-of-trade theory to investigate three areas in which it is frequently alleged that currently applied tariffs remain “too high”; the implication being that the WTO’s job performance to date is incomplete. This includes applied tariffs for countries that are not members of the WTO, applied MFN tariffs for WTO members that are unbound, and applied MFN tariffs for WTO members set in the presence of large amounts of tariff binding overhang. These are almost exclusively the domain of developing countries’ own trade policies and they are collectively important; 3.5 billion people currently live in countries in which the WTO has had minimal effect for one of these three reasons. This paper builds upon recent developments in the empirical literature to present evidence—some direct, some indirect—that sheds light on each area. It then identifies specific needs for additional research to clarify policy implications for the future role of the WTO in the ever-changing international trading system.
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Policy Research Working Paper WPS7502 DEC 02, 2015
The main message of this report is that if Kazakhstan wants to take advantage of global integration and diversification opportunities, the government needs to improve its trade policy framework, its management, and its regulations.
... See More + It is also finalizing accession to the World Trade Organization (WTO) while its trade strategy includes a number of free trade agreements to be negotiated. It is an active member of the Central Asia Region Economic Cooperation (CAREC). This report is composed of three policy notes that discuss how to improve the trade policy framework, management, and regulations: note one is on the trade policy framework and recommends joining the WTO on a tariff schedule that is more liberal than Russia’s; note two postulates that to benefit more fully from the WTO membership and future regional or bilateral agreements, the institutional framework for trade policy management will need a clearer strategic vision, better coordination within the government and with private sector, and enhanced human capacity; and note three suggests that for the private sector to benefit from global integration and diversification, the government should ease the burden of regulations that affect trade (non-tariff measures (NTMs)).
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This paper examines the implications of the terms-of-trade theory for the determinants of outcomes arising under the enforcement provisions of international agreements.
... See More + Like original trade agreement negotiations, the paper models formal trade dispute negotiations as potentially addressing the terms-of-trade externality problem that governments implement import protection above the globally efficient level so as to shift some of the policy's costs to trading partners. The approach is to extend earlier theoretical models of trade agreement accession negotiations to the setting of enforcement negotiations in order to guide the empirical assessment. The paper uses instrumental variables to estimate the model on trade volume outcomes from World Trade Organization (WTO) disputes over 1995–2009. The evidence is consistent with theoretical predictions that larger import volume outcomes are associated with products that have smaller increases in foreign exporter-received prices (terms-of-trade losses for the importer) as a result of the dispute, larger pre-dispute import volumes, larger import demand elasticities, and smaller foreign export supply elasticities. Dispute settlement outcome differences are also explained by variation in institutionally-motivated measures of retaliation capacity and the severity of the free-rider problem associated with foreign exporter concentration.
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Policy Research Working Paper WPS7242 APR 20, 2015
This paper provides a detailed explanation how the law of the World Trade Organization regulates environmental subsidies with a focus on renewable energy subsidies.
... See More + The paper begins by discussing the economic justifications for such subsidies and the criticisms of them and then gives examples of categories of subsidies. The paper provides an overview of the relevant World Trade Organization rules and case law, including the recent Canada-Renewable Energy case. The paper also makes specific recommendations for how World Trade Organization law can be improved and discusses the literature on reform proposals. The study finds that because of a lack of clarity in World Trade Organizaion rules, for some clean energy subsidies, a government will not know in advance whether the subsidy is World Trade Organization-legal.
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Policy Research Working Paper WPS7060 OCT 01, 2014
This report investigates the environmental impacts of Russia's accession to the World Trade Organization. A 10-region, 30-sector model of the Russian economy is developed.
... See More + The model is innovative and more accurate empirically in that it contains foreign direct investment, imperfectly competitive sectors, and endogenous productivity effects triggered by World Trade Organization accession along with environmental emissions data in Russia for seven pollutants that are tracked for all 30 sectors in each of the 10 regions. The decomposition analysis shows that despite the fact that World Trade Organization accession allows Russia to import better technologies and reduce pollution from the "technique effect," on balance World Trade Organization accession alone will increase environmental pollution in Russia through a shift toward dirty industries (the "composition effect") and the expansion of output with its associated increase in pollution ("scale effect"). The paper assesses the costs of three types of environmental regulations to reduce carbon dioxide emissions by 20 percent. The paper simultaneously implements a central case scenario with each of the carbon dioxide emission reduction policy initiatives. The analysis finds that the welfare gains of World Trade Organization accession are large enough to pay for the costs of any of the three environmental abatement policies, while leaving a net welfare gain. But the political economy implications are that the non-market-based policies are more costly and the command and control policy, which is not well targeted, is very costly. Based on a constant returns to scale model, the estimated welfare gains are insufficient to finance the costs of environmental regulation.
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Policy Research Working Paper WPS6957 JUN 01, 2014
Bohringer, Christoph; Rutherford, Thomas F.; Tarr, David G.; Turdyeva, NataliaDisclosed
Russia's exports, imports, and ability to attract foreign direct investment (FDI) continue to grow. In December 2011, after eighteen years of negotiations, the World Trade Organization (WTO) invited Russia to join WTO on the basis of the negotiated protocol of Russian accession.
... See More + Russia ratified the agreement in July 2012. As part of its accession to the WTO, Russia agreed to a series of important commitments to further open its trade and foreign investment regimes. Russia will apply international standards on sanitary measures and technical barriers to trade. Policies which promote energy efficiency, technology innovation, clean production in supply chains, and addressing climate change are receiving increasing attention in Russian society, and nowadays, shape the economic modernization agenda of the Russian political leadership. This report is designed to provide senior Russian policy makers with recommendations on certain areas where national environmental protection policies can be complemented by the benefits of trade liberalization. Industrial leaders may also benefit from many of the report's conclusions and recommendation. The report has several objectives. The first is to draw attention to the local impacts of air pollution impacting human health which has been previously estimated to be between 12 and 17 percent of all-cause mortality in Russia and costing the economy upwards of 14 billion dollars annually. Correcting for this "external cost" to society is not trivial and has serious implications for sector reform. The second objective is about reducing global warming, and in particular carbon dioxide (CO2). Russia's commitments to reducing greenhouse gas emissions have adjustment costs to the economy and the modeling undertaken in this report provides some relative magnitude. The third objective is related to the technological modernization that needs to take place in order to realize cost reductions (efficiency improvements) and what the associated environmental benefits will be. Finally, the report also demonstrates how the Government can reduce the marginal cost of funds from Russia's tax system. What this means is that money is currently being spent (tax Rubles) in an inefficient manner - either through large subsidies or funding inefficient production and consumption. The model investigates the impacts of trade liberalization through three impacts: the change in production output (the scale effect), sector mix (the composition effect), and productivity (the technique effect). The model highlights several areas where benefits can lead to better protection of the environment, and where liberalization measures can significantly enhance the effectiveness of national policies to address key environmental challenges. This report discusses Russia's accession to WTO from this perspective.
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Working Paper (Numbered Series) 83505 FEB 01, 2014
The main message of this report is that if Kazakhstan wants to take advantage of global integration and diversification opportunities, the government needs to improve its trade policy framework, its management, and its regulations.
... See More + It is also finalizing accession to the World Trade Organization (WTO) while its trade strategy includes a number of free trade agreements to be negotiated. It is an active member of the Central Asia Region Economic Cooperation (CAREC). This report is composed of three policy notes that discuss how to improve the trade policy framework, management, and regulations: note one is on the trade policy framework and recommends joining the WTO on a tariff schedule that is more liberal than Russia’s; note two postulates that to benefit more fully from the WTO membership and future regional or bilateral agreements, the institutional framework for trade policy management will need a clearer strategic vision, better coordination within the government and with private sector, and enhanced human capacity; and note three suggests that for the private sector to benefit from global integration and diversification, the government should ease the burden of regulations that affect trade (non-tariff measures (NTMs)).
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Ratings for the Trade Development Facility (TDF) Project for Lao People's Democratic Republic were as follows: outcomes were satisfactory; risk to development outcome was moderate; Bank performance was highly satisfactory and grantee performance was also highly satisfactory.
... See More + Some lessons learned includes: reform momentum needs to be maintained once the goal of World Trade Organization (WTO) accession has been achieved. A key lesson that has been learned from reform experiences in other countries that have acceded to the WTO is that momentum can be lost once the incentive of accession is removed. Translating reforms into results takes time. The time it takes to implement institutional reforms, and for those reforms to translate into results that are visible to the private sector can be long and uncertain. The complexity of moving to a full program based approach will be taxing on the implementation team. This will require continued and deepened investments in capacity development for the long term, as well as continued partnerships with initiatives financed outside the TDF. Better quality of project at entry will permit a better allocation of resources; avoid implementation delays, and complex and lengthy negotiations with potential beneficiaries. It is very important to make the most of political commitment to reform. Support for improving the overall business environment has a greater chance of success than selectively supporting priority sectors. Be flexible, not dogmatic in component design and implementation and adjust to the concerns of the beneficiaries.
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Implementation Completion and Results Report ICR2684 SEP 22, 2013
Ratings for the Private Sector Development Capacity Building Project for Ethiopia were as follows: outcomes were satisfactory; risk to development outcome was low or negligible; Bank performance was moderately satisfactory and borrower performance was also moderately satisfactory.
... See More + Some lessons learned includes: one of the takeaway lessons from this project is to provide timely advice to the Government to restructure projects to keep its relevance to emerging priorities as well as for efficient utilization of resources within the project period. To ensure compliance with Bank fiduciary requirements, continuous training and capacity building on financial management, procurement and contracts management should be provided to implementing agencies to ensure Bank's policies are adhered to. Projects should be designed with the operational flexibility to adapt when there is a difference between the assumptions made during design and the actual reality. The Bank team should be proactive in addressing unforeseen events such as reallocation of project proceeds to emergency situations and ensuring compliance by project implementing units with fiduciary requirements.
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Implementation Completion and Results Report ICR2789 JUN 30, 2013
