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International Monetary Fund. Research Dept.

model can also evaluate the importance of intermediaries. In the absence of intermediaries, and hence of indirect exporting, the share of exporters declines by 10.5 percentage points, export volume contracts by 11.1 percent, and welfare drops by 1.3 percent. Indirect exporting accounts for 18 percent of the gains from trade in Vietnam. How can policies affect export performance? The model can be used to run counterfactual exercises to seek insight into this question. Consider, for instance, trade license requirements. In Vietnam, until 20 years ago, if firms

Parisa Kamali

Experiments 6.1 Trading License Requirement 6.2 Economies of Scope 7 Conclusion A Data Appendix A.1 Small- and Medium-Sized Enterprise Survey A.2 World Bank Enterprise Survey A.3 Vietnamese Enterprise Survey B Exporting Directly and Indirectly Simultaneously C Impact of Indirect Exporting on the Domestic Sales of the New Direct Exporters D Alternative Model: Persistent Shocks to Demand E The Relationship between the Aggregate Price Index and the Variable Costs of Exporting * International Monetary Fund, 1900 Pennsylvania Ave NW, Washington

International Monetary Fund. Research Dept.
It has been two years since the trade tensions erupted and not only captured policymakers’ but also the research community’s attention. Research has quickly zoomed in on understanding trade war rhetoric, tariff implementation, and economic impacts. The first article in the December 2019 issue sheds light on the consequences of the recent trade barriers.
Parisa Kamali
In many countries, a sizable share of international trade is carried out by intermediaries. While large firms tend to export to foreign markets directly, smaller firms typically export via intermediaries (indirect exporting). I document a set of facts that characterize the dynamic nature of indirect exporting using firm-level data from Vietnam and develop a dynamic trade model with both direct and indirect exporting modes and customer accumulation. The model is calibrated to match the dynamic moments of the data. The calibration yields fixed costs of indirect exporting that are less than a third of those of direct exporting, the variable costs of indirect exporting are twice higher, and demand for the indirectly exported products grows more slowly. Decomposing the gains from indirect and direct exporting, I find that 18 percent of the gains from trade in Vietnam are generated by indirect exporters. Finally, I demonstrate that a dynamic model that excludes the indirect exporting channel will overstate the welfare gains associated with trade liberalization by a factor of two.
Parisa Kamali

variable costs of exporting results in a larger drop in the aggregate price index for lower levels of variable costs. This means, trade liberalization of the same size, lowers the aggregate price index more in the dynamic models without indirect exporting. While the total income of the household drops in both models, the larger drop in the aggregate price index in the model without indirect exporting results in higher welfare gains. The first counterfactual exercise is related to the trade license requirement in Vietnam. Until 20 years ago, if firms chose to export or

Ms. Hema R. De Zoysa, Mr. Robert L. Sharer, and Mr. Calvin A McDonald

has been greatly facilitated by the reduction in macroeconomic distortions, the liberalization of investment and trade licensing requirements, the increased access to foreign exchange, and the improvements in tax and tariff administration. Additionally, in 1991, an Investment Code was implemented and the Uganda Investment Authority (UIA) instituted as a “one-stop shop” to promote investment. Finally, the Government has been forthright in effectively resolving the expropriated property issue. Over 2,500 properties have been returned to the former owners, and the

International Monetary Fund. African Dept.

and preferential access to the EU and the US, to diversify exports destinations and widen products export bases. Strengthening governance and improving the business environment . Reforms to reduce vulnerabilities to corruption (e.g. strengthening the anti-corruption framework) and streamlining business regulations (e.g. ease of starting businesses, lowering compliance costs, and trading license requirements) would contribute to improve business conditions and lower costs of doing business in the country. Annex VIII. Supply-Side and Governance Reforms to

International Monetary Fund. Strategy, Policy, &, Review Department, and International Monetary Fund. Secretary's Department
At the time of the 2005 Review of the Fund’s Transparency Policy, the Executive Board requested regular updates on trends in implementing the transparency policy. The tables in this report provide an overview of recent developments, reflecting information on documents considered by the Board in 2017 and updating the previous annual report on Key Trends. Deeper analysis of these trends is undertaken in the context of periodic reviews of the Fund’s Transparency Policy.
International Monetary Fund

Decree (Dec. 4) were issued to provide a new structure and policy framework (see below in 1991). Financial Supervision and Regulatory Framework Joint-venture banks and foreign banks were permitted to open branch offices in Batan Island. Money Markets and Instruments Measures were introduced to reduce liquidity credits extended by Bank Indonesia. Liquidity credits would only be provided for activities that supported cooperatives, investment, and the achievement of self sufficiency in food. Trade Licensing requirements for 371 goods, including certain machinery steel

International Monetary Fund. African Dept.
This 2019 Article IV Consultation with the Kingdom of Eswatini highlights that the financial system remains sound, although vulnerabilities are rising. Hence, bank supervision should be intensified, the early intervention regime strengthened, and plans to relax single borrower concentration regulations suspended. The paper explains that the authorities have recently taken some policy actions toward stabilizing the economy. However, reflecting expansionary spending policies and declining Southern African Customs Union revenue, public debt is still rising, domestic arrears have accumulated, and international reserves have fallen below adequate levels. Supply side and governance reforms are needed to support private investment and strengthen competitiveness. Reforms should reduce vulnerabilities to state-capture and other forms of corruption, streamline business regulations and regulatory requirements, reduce high electricity and telecommunications costs, contain wage growth, and address shortages of skilled workers. A credible medium-term fiscal adjustment plan, starting with measures to reduce next year’s fiscal deficit, is needed to bring the economy on a sustainable path. Policies should combine expenditure reductions and revenue increases that enhance long-term growth prospects. Expanding and better targeting cash transfers would help protect the poor.