Country Economic Memorandum
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Publication
Removing Regulatory Barriers to Competition
(Washington, DC, 2021-11)Competition can drive productivity growth in Kosovo, especially in the context of the post-Coronavirus disease 2019 (COVID-19) recovery. As the economy rebuilds, it is key that markets function smoothly, and that anticompetitive firm behavior or government intervention do not constrain the path to recovery. Competitive product markets can help a country recover from economic shocks more quickly. Competition in product markets can also prop-up economic recovery in a more inclusive way for the poorest households. Kosovo has made significant progress towards pro-competition regulation of product markets but there is still significant room for improvement. Although the product market regulation (PMR) indicators are limited in scope and should therefore be considered as an entry point for further analysis, this assessment allows to identify potential constraints to competition and possible policy reforms. Kosovo can increase competition by: (a) eliminating public owned enterprise (POE) - related barriers to competition to ensure a level playing field for private and public operators in markets where they compete, (b) improving the regulatory process and facilitating business registration to boost market entry, and (c) introducing policy reforms in network sectors and professional services to eliminate regulatory barriers to competition and avoid anticompetitive practices. -
Publication
A Framework for Enhancing Intra-regional Connectivity in the Horn of Africa
(World Bank, Washington, DC, 2021-06-21)This background paper systematically maps and assesses the connectivity of cities in the Horn of Africa (HoA) and uses the results to proposes a number of policy perspectives on how to strategically boost connectivity in different parts of the region. Analytically, this is achieved through network analysis of the directness, the diversity, topology and the density of HoA cities’ transport infrastructure connections. Crucially, network analysis allows proxying HoA cities’ potential to participate in value chains at various geographical scales and identifying key areas of possible intervention. Results can guide institutional and governance measures that can be taken to influence connectivity as a whole and for specific cities and transport corridors in particular. The output can thus help determine the interventions that are needed to tackle bottlenecks in corridors, addressing infrastructure, policy and regulatory constraints. The remainder of this paper is organized as follows. Section 2 outlines the rationale for an analysis of inter-urban connectivity in general and its linkages with the broader topic of regional integration and the economic geographies of the HoA in particular. Section 3 discusses our analytical framework, while Section 4 discusses the results. The paper is concluded with a discussion of key policy perspectives in section 5. -
Publication
Boosting Export Performance
(Washington, DC, 2021)Improving Kosovo’s export competitiveness can help to catalyze growth and reduce poverty. As a small economy, Kosovo will benefit from integration, both globally and regionally, to exploit scale economies from access to a larger market. Higher exports will not only contribute to growth and lower current account deficits but can also help heighten productivity due to more innovation and learning by exporting. Exporting firms, which are more competitive, will also be able to create better jobs and economic opportunities for Kosovars. This background note examines export dynamics in Kosovo over the period 2010-19, benchmarking Kosovo against relevant comparator countries. It overviews Kosovo’s trade structure, export dynamics at the firm level, trade policy and regulatory framework, and constraints to trade in goods and services and identifies policy options for consolidating trade growth in growing sectors. The note also spotlights digitalization and digital trade. It analyzes the enabling environment and suggests policies to enhance digital connectivity, improve the regulatory environment for digital trade, and encourage the use of e-payments. -
Publication
Serbia’s New Growth Agenda: FDI Spillovers
(World Bank, Washington, DC, 2019-11-28)This note examines the relationship between the presence of foreign firms and total factor productivity (TFP) growth of domestic firms (called ‘FDI, Foreign Direct Investment, spillovers’) in Serbia over the period of 2005-16. The analysis finds evidence of FDI spillovers in Serbia. Domestic firms on average enjoy higher productivity because of the presence of FDI firms in the economy. Moreover, domestic firms that supply to FDI firms or are located in the same industry as FDI firms, enjoy higher productivity. This presumably stems from technology transfer, higher quality standards, or higher competition. However, productivity of domestic firms sourcing from industries with a large share of FDI firms find their productivity reduced, likely due to markups by foreign firms. The effect of FDI on productivity of domestic firms also varies by firm size and industry. Small firms benefit more from spillovers associated with backward linkages (when they supply to an FDI firm) but are worse off with more horizontal FDI (when they compete with FDI firms in the same industry). Firms in high-tech industries benefit more from horizontal and backward FDI spillovers, but firms in low-tech industries experience no effect. Lastly, firms in the transport manufacturing industry do not enjoy any FDI spillover from foreign firms in their industry. -
Publication
Turning Smallness into Uniqueness: Six Key Challenges to Unlock Sao Tome and Principe Growth’s Potential
(World Bank, Washington, DC, 2019-07-24)Economic growth in Sao Tome and Príncipe (STP) has long been driven by an unsustainable reliance on public expenditures, especially grant- and loan-financed public investment. STP needs to turn its smallness into uniqueness to unlock its growth potential. To accomplish this transformation, this image must be matched by a more balanced growth in which the private sector plays a larger role and with a more effective government. Tourism, agriculture, and fisheries could drive the country’s transition to a more balanced growth pattern. This Country Economic Memorandum (CEM) highlights six key challenges that STP must overcome as it transitions to a more balanced growth pattern and it offers policy recommendations for addressing each challenge. Accomplishing this rebalancing will require STP to address six key challenges at the macroeconomic, structural, and sectoral level. These include: (i) The twin budget and current-account deficits; (ii) Weak trade connectivity by both air and sea; (iii) Credit constraints caused by a high level of non-performing loans and difficulties enforcing commercial contracts; (iv) Uncertainty surrounding property rights and land tenure; (v) Poor-quality infrastructure, especially in the energy and transportation sector; and (vi) The overexploitation of marine resources. -
Publication
Uganda Country Economic Memorandum: Economic Diversification and Growth in the Era of Oil and Volatility
(World Bank, Kampala, Uganda, 2015-06)The objective of the Ugandan government is to make Uganda an upper - middle income country within thirty years. Economic diversification is a key component of that strategy. The country economic memorandum (CEM) report discusses how the emergence of oil and mineral production can contribute to Uganda’s effort to promote economic diversification as a means to achieve sustainable and shared growth. Based on the lessons from international experience, the report outlines the elements of a development and diversification strategy, which the Ugandan government may wish to consider in the design of its macroeconomic, fiscal, and sectoral development policies. It then focuses on the set of policies required to maximize the benefits of a diversification strategy in an oil-producing country. Finally it describes a series of actions which the government should plan, and carry out to deal with a number of specific implementation issues. The first part of the report focuses on the importance of economic diversification for Uganda and on the prospects and challenges of oil and mineral development. It addresses the following three issues: (a) why diversification is important for economic development?; (b) where Uganda stands in that area and why it should give a new impetus to its diversification strategy?; and (c) what are the prospects, possible impact, and challenges associated to oil and mining development for Uganda’s economy?