Publication: Seycehelles: Welfare Impacts of Exchange Rate Adjustment and Policy Options
Loading...
Published
2006-02
ISSN
Date
2015-08-17
Author(s)
Editor(s)
Abstract
This paper studies likely macroeconomic impacts and social consequences of devaluation of the Seychelles rupee. Analyzing potential welfare impacts of devaluation ex ante is crucial for policy making, since information obtained from such analyses would allow policy makers to design cost-effective, well-targeted policy measures, with the aim of mitigating negative social consequences of devaluation. Based on the estimated welfare impact of devaluation, the paper considers mitigation policy options, and discusses their effectiveness and associated budgetary costs. The focus of this study is the likely impacts of devaluation on the prices, economy and social welfare. The reminder of the paper is structured as follows. Section two first analyzes Seychelles’ household expenditure survey data and presents the incidence of poverty and inequality in Seychelles. Section three then discusses how the Seychelles economy would adjust to an initial devaluation of the US dollar value of the rupee by 45 percent, followed by a gradual move to an equilibrium level. Projected macroeconomic variables and prices are applied to the household survey data to estimate possible impacts on the incidence of poverty. Section four discusses a variety of policy measures designed to alleviate the adverse impacts on the poor. Fiscal viability of these measures is also discussed in this section. Section five concludes the paper.
Link to Data Set
Citation
“Kojo, Naoko C.; Ivaschenko, Oleksiy. 2006. Seycehelles: Welfare Impacts of Exchange Rate Adjustment and Policy Options. © World Bank. http://hdl.handle.net/10986/22423 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Inflation Dynamics and Food Prices in an Agricultural Economy : The Case of Ethiopia(2009-06-01)Ethiopia has experienced a historically unprecedented increase in inflation, mainly driven by cereal price inflation, which is among the highest in Sub-Saharan Africa. Using monthly data from the past decade, the authors estimate error correction models to identify the relative importance of several factors contributing to overall inflation and its three major components, cereal prices, food prices, and non-food prices. The main finding is that, in a longer perspective, over three to four years, the main factors that determine domestic food and non-food prices are the exchange rate and international food and goods prices. In the short run, agricultural supply shocks and inflation inertia strongly affect domestic inflation, causing large deviations from long-run price trends. Money supply growth does affect food price inflation in the short run, although the money stock itself does not seem to drive inflation. The results suggest the need for a multi-pronged approach to fight inflation. Forecast scenarios suggest monetary and exchange rate policies need to take into account cereal production, which is among the key determinants of inflation, assuming a decline in global commodity prices. Implementation of successful policies will be contingent on the availability of foreign exchange and the performance of agriculture.Publication Taking Stock, December 2010(World Bank, Hanoi, 2010-12)In the post-global economic crisis environment, Vietnam's economy continues to grow at a reasonably rapid and stable rate. While the speed of global economic recovery has been uneven across the world, Asia as a region has done particularly well. And within Asia, Vietnam's growth performance continues to be impressive. As shown in left panel of, Vietnam was one of the fastest growing economies in the East Asia and Pacific (EAP) region prior to the global economic crisis and has remained so in the post-crisis period as well1. After registering a real gross domestic product (GDP) growth of 5.3 percent in 2009, Vietnam's economy is expected to grow between 6.5-6.7 percent in 2010. Vietnam, like China, stands out not only for achieving a higher average growth rate but also a more stable growth path. This however has meant that the speed with which the Vietnam's economy is bouncing back from the lows of 2009 appears to be less impressive than countries that experienced negative growth last year. This edition of 'Taking Stock' a semi-annual publication from the World Bank attempts to understand the recent macroeconomic changes in Vietnam. It documents changes to the macroeconomic outcomes and policies with a view to inform policy discussions in the country. The analysis is mostly retrospective in nature, though discussions on prospective challenges and outlook are also briefly mentioned. Developments in the global economy in general and in the EAP region in particular are juxtaposed against Vietnam's own economic outcomes and policies to provide a more complete and nuanced picture of the issues.Publication Sudan - Toward Sustainable and Broad-Based Growth(World Bank, 2009-12-01)Sudan is in the 10th year of its longest and strongest growth episode since independence, benefiting from the advent of oil in 1999. This report proposes a growth strategy for Sudan that reduces its dependence on oil, while building an economic foundation for a diversified, inclusive and sustainable growth path. Specifically, Sudan's near term strategy should focus on: a) developing and maintaining the necessary enabling environment for growth, specifically macroeconomic stability and effective fiscal management (chapter one); b) implementing policies aimed at improving the investment climate and broadening private sector-led growth (chapters two and five); c) increasing returns to the agriculture sector as the highest potential engine of growth and poverty reduction over the medium-term (chapter four); d) developing a comprehensive reconstruction plan for the South (chapter six); and e) complementing technocratic reforms with good governance. Sudan needs a new, more balanced growth vision that is less reliant on oil, while using the oil wealth to create an economic foundation for a diversified, inclusive, and sustainable growth path.Publication Institutional Change, Policy Challenges, and Macroeconomic Performance(World Bank, Washington, DC, 2008)Debates over the nature and direction of economic policy in Iran have intensified rather than abated after the tumultuous changes brought about by the revolution in 1979. In the span of these three decades, Iran has witnessed sweeping institutional changes and has been affected by significant economic and political upheavals. At the macroeconomic level, too, there have been a number of shocks ranging from oil booms and busts, to war (with Iraq), trade sanctions, and internal political strife. This paper uses Iran's experience to reflect on growth and development in the context of political upheaval and an uncertain institutional environment. It is a premise of the paper that Iran's recent past presents a rare, 'laboratory' like, case for the study of growth and development in a broad context. This paper examines post-revolutionary Iran's macroeconomic policies and performance in a comparative context, appraising it against Iran's past trends and real potential. It shows how recurrent cycles of populism and pragmatism have characterized this period. The paper argues that two sets of factors have conditioned Iran's performance and will continue to taint her prospects for sustainable growth into the future. These are: (i) Iran's limited economic diversification and continued dependence on the oil sector, and (ii) the institutional setting in which post-revolutionary economic policies have been formulated and implemented for much of the last three decades.Publication Middle East and North Africa Economic Developments and Prospects, October 2012 : Looking Ahead After a Year in Transition(Washington, DC, 2012-10-01)The Arab Republic of Egypt, Tunisia, Libya and the Republic of Yemen are recovering after a period of economic growth decelerations accompanying the Arab Spring uprisings of 2011. Economic recovery was relatively quick, with industrial production recovering in a matter of months and, in the cases of Egypt and Tunisia, the growth dips of 2011 were smaller than the average growth declines observed around the year of transition during past transitions to democracy. Importantly, the growth decelerations and recovery have taken place in a weak global environment, with events in the Euro zone posing particular challenges to Tunisia, and to a lesser extent, Egypt. The report focuses on the economic developments and short-term outlook for four Middle East and North Africa (MENA) Economies, Tunisia, Egypt, the Republic of Yemen and Libya. These four countries are given special attention because each of them experienced a revolution and a major political change in 2011 and is undergoing a process of political transition toward democracy. The sudden change had important economic consequences. While other countries in the Middle East and North Africa are undergoing political change, the economic ramifications were muted as compared with the changes observed in the four MENA post-revolutionary economies.
Users also downloaded
Showing related downloaded files
Publication Housing Demand and Affordability in India(World Bank, Washington, DC, 2022-05)The focus of this paper is on the demand for housing in urban India. Using rental data, the paper finds that income elasticities of housing demand are high and elastic across time. Hedonic pricing regressions confirm that this high elasticity is driven by high demand for improved water and sanitation amenities that are attached to the consumption of housing. Further, the demand estimations show that rental markets in urban India and in megacities are becoming more efficient, emerging from the shadow of legacy rent control regulation and uncertainty from the past. All the results suggest that household subsidies or other demand-side interventions are less warranted, but rather investments to increase housing supply through better service infrastructure for water, sanitation, and connectivity are better uses of public resources. The analysis also provides guidelines to improve the targeting of housing programs by means testing against the income distribution. Using one such estimate of the income distribution, the paper shows that housing affordability is improving in India. In doing so, the paper highlights the methodological challenges in measuring housing affordability in developing countries.Publication Thai Civil Registration and Vital Statistics and Unique Identification Number Systems for Universal Health Coverage(World Bank, Washington, DC, 2019-08)The Thai civil registration (CR) system was established two centuries ago. Over the past four decades, the system has changed from a manual, paper-based registration system to a centralized, electronic, online system. A unique identification number (UIN) system was implemented in 1982, along with a computerized CR database system. The Thai citizen identification card has evolved along with the two systems from a paper card to an integrated circuit–chip smart card. All provincial-, district-, and municipality-level registration offices are linked online to the central CR system database. Thailand’s vital statistics (VS) system has improved since 1996, when the CR system began feeding electronic birth and death data directly into the VS management system. VS reports are now up to date, of good quality, and available for use by any agency that needs them. Thailand declared its universal health coverage (UHC) policy in 2001. Health insurance coverage was expanded to all Thais through the Universal Coverage Scheme. The use of UINs and CR databases has enabled and facilitated rapid enrollment of beneficiaries and improved the beneficiary registries of all three of the country’s major insurance plans. All Thais are entitled to coverage from one of these plans. The use of UINs and personal demographic information from the CR system significantly improved the quality of health care information and provider payment systems. Misuse of UINs and personal information in CR is threatening the integrity of the UIN and central CR databases. New initiatives by the Thai government, such as the National Digital Identification Platform project, are ongoing to expand e-government and private services and to prevent the misuse of personal information and personal identity challenges.Publication Digital Africa(Washington, DC: World Bank, 2023-03-13)All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.Publication Income and Beyond(Springer Netherlands, 2013-06)This paper studies multidimensional poverty for Argentina, Brazil, Chile, El Salvador, Mexico and Uruguay for the period 1992–2006. The approach overcomes the limitations of the two traditional methods of poverty analysis in Latin America (income-based and unmet basic needs) by combining income with five other dimensions: school attendance for children, education of the household head, sanitation, water and shelter. The results allow a fuller understanding of the evolution of poverty in the selected countries. Over the study period, El Salvador, Brazil, Mexico and Chile experienced significant reductions in multidimensional poverty. In contrast, in urban Uruguay there was a small reduction in multidimensional poverty, while in urban Argentina the estimates did not change significantly. El Salvador, Brazil and Mexico, and rural areas of Chile display significantly higher and more simultaneous deprivations than urban areas of Argentina, Chile and Uruguay. In all countries, deprivation in access to proper sanitation and education of the household head are the highest contributors to overall multidimensional poverty.Publication Pesticides(World Bank, Washington, DC, 2018-03-23)Agriculture’s heavy and growing dependence on pesticides across large parts of the world, though partly fueled by pesticides’ own effectiveness, is placing an ever-rising burden on human health, biodiversity, and even the agro-food sector. Pesticides are central to the mix of Green Revolution technologies that, by enabling agricultural intensification, have boosted agricultural productivity and output since the Second World War. When used correctly, pesticides are a labor-saving technology that can contain pest populations and improve crop yields, quality, and storability, at least in the short run.