Newfarmer, Richard

Person:
Newfarmer, Richard

Fields of Specialization

Trade, Industrialization, Public finance

Last updated: January 31, 2023

Biography

Richard Newfarmer is Country Program Advisor with the International Growth Centre and the IGC’s Country Director for Rwanda, Uganda, and South Sudan. The IGC is a joint venture of Oxford University and the London School of Economics, and provides independent, research-based policy analysis at the request of governments of selected low-income countries in Africa and Asia. He is also on the Advisory Board of the WTO Chairs Program, a Senior Fellow (non-resident) at the World Trade Institute in Bern, Switzerland and a Member of Evian Group Brain Trust (Switzerland). He consults with international organizations, including the World Bank, the Organization of Economic Cooperation and Development, and the International Trade Centre. Recently, he co-authored “Trade and Employment in a Fast Changing World” for the OECD (2012), “Managing Aid for Trade and Development Results: the Case of Rwanda” (OECD 2013), and has been a principal author of World Bank reports on trade and competitiveness in Botswana (2012), Zimbabwe (2013) and Malawi (2014). Prior to this, he was the World Bank’s Special Representative to the United Nations and World Trade Organization, based in Geneva, Switzerland, until his retirement from the Bank in November 2010. Prior to assuming the post in Geneva, he was Economic Advisor in the International Trade Department and in the Prospects Group of the World Bank, and led the team that produced Global Economic Prospects 2007: Managing the Next Wave of Globalization. Mr. Newfarmer holds a PhD and two MAs from the University of Wisconsin, and BA (Highest Honors) from the University of California at Santa Cruz.

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Now showing 1 - 9 of 9

Trade in Zimbabwe: Changing Incentives to Enhance Competitiveness
(Washington, DC: World Bank, 2015-05-22) Newfarmer, Richard; Pierola, Martha Denisse
In Zimbabwe trade has been a driver of economic growth, rising incomes, and progressive empowerment of Zimbabweans through rising standards of living and the promise of better jobs. Since 1980, through good years and bad years, increases in exports have been positively associated with increases in national income. Zimbabwe's location and resource base, together with a low-cost but relatively well educated labor force, have endowed it with a naturally high trade ratio built on a diversified base that facilitates using trade as an engine of growth. While trade volumes have rebounded smartly from the deep recession of 2007-2008, these do not offset other worrisome longer-term trends: 1) export growth during the last decade has been lackluster and failed to drive high growth; 2) agricultural exports, other than tobacco, have lost their once dominant role in the region, and are no longer a source of diversification; 3) manufacturing has withered in a continuing secular decline; and 4) Zimbabwe's export basket has become less diversified and more dependent on a narrow range of mineral and, to a lesser extent, agricultural products. In short, exports have become less diversified, less-technologically sophisticated, and less labor-intensive, and ever more dependent on a few large mining activities to provide foreign exchange and employment. This report traces the roots of this poor performance to several policy issues: poor predictability of macroeconomic policy and economic governance has created an unfavorable climate for private investment and trade; a tariff structure that dampens export profitability; industrial policies (indigenization policy in particular) that undermine investor confidence and inhibits private investment; and finally, competition-limiting policies toward services that limit connectivity of Zimbabweans and raise trade costs. The good news arising from the study is that the remedies for these policy shortcomings lie in Zimbabwean hands. If the government were to adopt reforms that reconfigure economy-wide incentives and trade and industrial policies, it could promote sustained growth, economic diversification and empowerment of poor people.
Breaking Into New Markets
(World Bank, 2009) Shaw, William; Newfarmer, Richard; Walkenhorst, Peter
This book takes a fresh look at export diversification. It concludes that much of the recent literature, though novel, has focused excessively on simply adding new products to export portfolios. One branch of these studies centers on the 'discovery' of exports, and it argues that the threat of entry (imitation) leads to an underinvestment in bringing new products to the global market. Another analytical branch focuses on changing the contents of an export portfolio to mirror the exports of countries with higher incomes on the grounds that these lead to higher productivity. Both strands implicitly point to the need for careful yet active government policies. While such policies are important, this book argues for a more comprehensive view of diversification and hence a more comprehensive trade policy strategy-one that takes into account improving the quality of existing exports, breaking into new geographic markets, and increasing services exports. This publication has been tailored to policy makers, their staffs, and the international development community at large. It is a collection of short articles that summarize major issues and policies on particular topics. Many of the chapters are digests of more formal studies but are presented here with a minimum of underlying econometric and theoretical detail of less interest to policy makers. As the World Bank increases its efforts on 'aid for trade,' Staff are working with countries to help diversify their exports. Along with other development partners, the Bank is providing enhanced assistance to improve competitiveness, facilitate trade, improve trade-related services, and exploit regional and multilateral initiatives to open markets for developing countries. This book makes a substantial contribution to the efforts of developing countries to use the global economy to spur growth and reduce poverty.
Aid for Trade : Matching Potential Demand and Supply
(2009-07-01) Gamberoni, Elisa; Newfarmer, Richard
This paper is designed to help both the beneficiary governments and donors of aid-for-trade identify countries that are under-performing in trade and which are receiving less aid for trade than their global performance might otherwise suggest is necessary. The authors develop ten measures of trade performance and capacity (including trade-related infrastructure, institutions, and incentives) to assess potential demand, and then look at country allocations of aid for trade to see which are receiving below-average amounts in the supply of aid for trade - relative to their potential demand. As they design national development strategies, countries may wish to consider giving greater attention to trade and requesting that donors allocate more aid for trade. As part of the analysis, the paper provides a conceptual framework for selecting indicators of trade performance and its policy determinants that the World Trade Organization and its partners might monitor closely as part of the aid for trade initiative.
Trade, Doha, and Development : A Window into the Issues
(Washington, DC: World Bank, 2006) Newfarmer, Richard
This book traces the development of world trade from the era when the global trading system had been stacked against growth in developing countries to the present time when the membership of the WTO has grown to include most developing countries. It is for this reason that the Doha Round is important: It has given all countries of the world the opportunity to work collectively on barriers of interest to developing countries and to the world's poor. Although the choice is simple, it is not easy. The underlying details of the issues are notoriously complex. Observers have a difficult time penetrating the veil of legal and economic opacity that envelops the negotiations. The details are sufficiently technical and multifarious that experts in one area are often unaware of technical details in another. And details make the difference between opening markets and merely appearing to do so through a vacuous agreement that looks good on the surface but does little or nothing to widen opportunities for poor traders in the global market place. This book provides succinct analyses of the most critical issues facing negotiators, highlighting the choices that most affect development. It is a window into the issues. The WTO negotiations are not the only ones shaping the world trading system. For one thing, regional trade agreements in growing numbers are introducing preferential trade arrangements between subsets of the international community. Then again, a third subject of international policy discussions-"aid for trade"-affects developing countries' opportunities to participate in the global market. This book details the pitfalls for the world economic system to avoid, and the author hopes that it will contribute to a better world trading system, one that is more equitable and more supportive of development.
Avenues for Export Diversification: Issues for Low-Income Countries
(World Bank, Washington, DC, 2009) Walkenhorst, Peter; Brenton, Paul; Newfarmer, Richard
While diversification of exports is often a desirable trade objective, it is far from clear how best to tap into new opportunities. This paper discusses the range of avenues of diversification, including (i) expanding the range of markets into which existing products are sold (geographic diversification); (ii) upgrading the value of existing products, including agricultural exports (quality diversification); and (iii) taking advantage of opportunities to expand non-merchandise exports (services diversification), in addition to introducing entirely new export products. All offer opportunities for cost?effective positive policies relating to the incentive regime, backbone services, and export support institutions.
Watching More Than the Discovery Channel : Export Cycles and Diversification in Development
(World Bank, Washington, DC, 2007-08) Brenton, Paul; Newfarmer, Richard
This paper examines the export performance of 99 countries over 1995-2004 to understand the relative roles of export growth through "discovery" of new products and growth during post-discovery phases of the export product cycle -- acceleration and maturation -- in existing markets and expansion into new geographic markets. The authors find that expanding existing products in existing markets (growth at the intensive margin) has greater weight in export growth than diversification into new products and new geographic markets (growth at the extensive margin). Moreover, growth into new geographic markets appears to be more important than discovery of new export products in explaining export growth. Of particular importance is whether an exporting country succeeds in reaching more national markets that are already importing the product it makes. This geographic index of market penetration is a powerful explanatory variable of export performance. This suggests that governments should not focus solely or even primarily on the discovery channel, but also seek to identify and address market failures that are constraining exporters in subsequent phases of the export cycle.
Economic Partnership Agreements and the Export Competitiveness of Africa
(World Bank, Washington, DC, 2008-05) Hoppe, Mombert; Brenton, Paul; Newfarmer, Richard
Trade can be a key driver of growth for African countries, as it has been for those countries, particularly in East Asia, that have experienced high and sustained rates of growth. Economic partnership agreements with the European Union could be instrumental in a competitiveness framework, but to do so they would have to be designed carefully in a way that supports integration into the global economy and is consistent with national development strategies. Interim agreements have focused on reciprocal tariff removal and less restrictive rules of origin. To be fully effective, economic partnership agreements will have to address constraints to regional integration, including both tariff and non-tariff barriers; improve trade facilitation; and define appropriate most favored nation services liberalization. At the same time, African countries will need to reduce external tariff peak barriers on a most favored nation basis to ensure that when preferences for the European Union are implemented after transitional periods, they do not lead to substantial losses from trade diversion. This entails an ambitious agenda of policy reform that must be backed up by development assistance in the form of "aid for trade."
China's Emerging Regional Trade Policy
(2008) Zhao, Longyue; Malouche, Mariem; Newfarmer, Richard
The purpose of this paper is to provide a timely review and analysis of China's regional trade agreements, its motivations, and its economic implications for Association of Southeast Asian Nations (ASEAN)-China Free Trade Agreement (ACFTA) member countries and other trading partners. The paper uses the SMART model of the World Integrated Trade Solution to quantify the economic implications of the ACFTA on merchandise trade flows among member countries and other trading partners. Then, for comparative purposes, the impact of two possible paths beyond the ACFTA is simulated: an East Asia Free Trade Agreement (EAFTA) and the possible Doha Round multilateral trade liberalization. The paper finds that, if regional and bilateral trade arrangement (RTA) were only concentrated in tariff reductions, the impact on trade flows would be quite limited. China's trade liberalization will bring the similar impacts to ASEAN in three of the scenarios modeled. Japan and Korea would get more market access to China if an EAFTA were to become reality. Only in a multilateral liberalization would all RTA member countries and the rest of the world benefit. Three limitations are noteworthy. First, these types of models capture only static gains from trade. Second, the simulations do not include services liberalization, which could readily provide benefits in several multiples of merchandise trade, and third, it is assumed that full removal of all border barriers at once, in a multilateral scenario, would be of illuminating heuristic value but is unlikely to occur in reality. The paper demonstrates the wisdom of China's simultaneous pursuit of unilateral, regional, and multilateral liberalization--because the wider the trading group involved in the liberalization, the more China and its partners will benefit. The tariff reductions in RTAs will have limited effects on expanding merchandise trade, especially when compared with comprehensive and multilateral liberalization agreements.
Crisis and Contagion in East Asia : Nine Lessons
(World Bank, Washington, DC, 2001-06) Kawai, Masahiro; Newfarmer, Richard; Schmukler, Sergio L.
The authors investigate the origins of the East Asian crisis and its contagion, examine the channels of contagion, and discuss policy recommendationsThey make detailed recommendations in the context of nine general lessons learned from the East Asian crisis. 1) Preventing crises and contagion: avoid large current account deficits financed through short-term private capital inflows. Aggressively regulate and supervise financial systems to ensure that banks and nonbank financial institutions manage risks prudently. Put in place incentives for sound corporate finance to prevent high leverage ratios and overreliance on foreign borrowing. 2) Managing crises and contagion: In the context of sound policies, mobilize timely external liquidity of sufficient magnitude to restore market confidence. At times of crisis, "bail in" private foreign creditors. When official resources are too limited for the magnitude of the crisis or contagion, and when private creditors are not amenable to coordination, some involuntary private involvement may be needed too. Keep in mind that there is no one-size-fits-all monetary and fiscal stance for responding to crises and contagion. 3) Resolving the systemic consequences of crises and contagion. Move swiftly to establish domestic and international mechanisms for dealing with the assets and liabilities on nonviolable banks and corporations. Cushion the effects of crisis on low-income groups through social policies to ameliorate the inevitable social tensions associated with adjustment. 4) Developing an effective regional financial architecture. Improve mechanisms for preventing, managing, and resolving crises and contagion at the regional level in ways consistent with improvements in the global financial architecture.