BNDES reform may shake up financing in Brazil

2017 ◽  
Keyword(s):  
Interest Groups ◽  
Interest Rates ◽  
National Development ◽  
Development Bank ◽  
Government Officials ◽  
Content Type ◽  
Future Role ◽  
Corporate Executives ◽  
Car Wash ◽  
Legal Controls

Subject Reform of the National Development Bank. Significance While the ‘Operation Car Wash’ corruption probe continues to dominate the headlines with an ever-widening list of indicted government officials and corporate executives, many of Brazil’s major institutions, including the National Development Bank (BNDES), are also at the centre of the country's largest corruption scandal. The Bank’s central role at the heart of the nation’s financial system has long been criticised for insufficient legal controls and lack of full transparency. Impacts A backlash against BNDES changes can be expected from important interest groups. The BNDES’s future role may depend on the unpredictable outcome of the 2018 elections. If successful, the Bank’s reform could help lower interest rates and favour capital-markets development.

Debt reliance will undermine Laos's development

2015 ◽  
Keyword(s):  
High Speed ◽  
National Development ◽  
Asian Development Bank ◽  
Infrastructure Development ◽  
Development Bank ◽  
High Speed Rail ◽  
Significant Development ◽  
Content Type ◽  
Manufacturing Sectors ◽  
Preparatory Work

Significance Alongside loans, the sale will support energy infrastructure development, part of Vientiane's national development and economic growth plans; Laos has also started preparatory work for a high-speed rail link with China and Thailand. However, there are fears that the rail scheme might bankrupt the country (the Asian Development Bank (ADB) in 2012 described it as "unaffordable") while the IMF warned in January that Laos could face wider financial stress, including debt defaults, after years of rapid credit growth and mounting public liabilities. Impacts Ceding the rail project's management to China increases the risk of Laos losing control over its financial affairs. The railway is unlikely to spur significant development of Laos's mining, agriculture and manufacturing sectors. Pledging future mining revenues as payment for loans will erode Laos's government income and public services.

Russia's Putin clarifies options but not his future

2020 ◽  
Keyword(s):  
National Development ◽  
The State ◽  
Content Type ◽  
Future Role ◽  
Development Goals

Significance Without explicitly saying so, the proposals create a menu of options for Putin's future role now that he has made it clear he will not be president after 2024. Putin has been under pressure to make his intentions clear, especially as the established elite must fear the loss of their patron. Impacts Further statements by Putin are likely to be just as ambiguous on his plans for himself and the state. The prospect of a weaker presidency is a setback for elite figures biding their time to make a bid. Once a new cabinet settles in, it will come under close scrutiny for its delivery of Putin's national development goals.

Brazil's BNDES may improve transparency practices

2016 ◽  
Keyword(s):  
Developing Countries ◽  
Developing World ◽  
National Development ◽  
Infrastructure Projects ◽  
Development Bank ◽  
Content Type ◽  
Goods And Services ◽  
Financing Infrastructure ◽  
China Development

Subject The National Development Bank. Significance Development banks of the developing world, like Brazil's National Development Bank (BNDES) and the China Development Bank, play an increasing role in financing infrastructure projects in other developing countries. A challenge for understanding the role of this lending is that transparency by these banks has been low. In 2015, the BNDES put a complete record of its support for the export of Brazilian goods and services online, allowing an analysis of its past patterns of lending. Impacts The BNDES has improved its transparency but corruption issues still plague many of its loan recipients. The drop-off in new projects appears set to continue despite the need for infrastructure funding. The focus may also increasingly concentrate on Brazil rather than projects by Brazilian companies elsewhere.

Pharma prices will attract US political attention

2015 ◽  
Keyword(s):  
Pharmaceutical Industry ◽  
Interest Rates ◽  
State Government ◽  
Generic Drugs ◽  
Total Activity ◽  
Pharmaceutical Companies ◽  
Government Officials ◽  
Content Type ◽  
Innovative Products ◽  
Low Interest Rates

Subject An update on the pharmaceutical industry. Significance Mergers and acquisition (M&A) activity at pharmaceutical companies continues to occur at a record pace, with transactions focused on the generic and specialty segments. Total activity of more than 220 billion dollars in the first half of 2015 eclipsed 2014's previous record of more than 200 billion dollars. However, the pharmaceutical industry is attracting attention from federal and state government officials for rapidly rising costs of drugs -- which grew by 12.6% in 2014 -- largely due to rising prices for generics and innovative products. Impacts Drug pricing is likely to feature heavily on the 2016 electoral agenda. Generic drugs, which account for some 80% of US prescriptions, will remain a major focus of corporate interest. Low interest rates will also fuel pharmaceutical M&A.

The Brazilian Development Bank

2018 ◽  
Author(s):  
Luiz Ricardo Cavalcante
Keyword(s):  
Central Bank ◽  
Interest Rates ◽  
National Development ◽  
Capital Formation ◽  
Theoretical Background ◽  
Costs And Benefits ◽  
Development Bank ◽  
The Creation ◽  
Favorable Conditions

This chapter discusses the role played by the Brazilian Development Bank (BNDES) based upon a survey of its costs and benefits reported in the literature. It provides some theoretical background for the creation and the existence of development banks, using this background to support a brief discussion about the long-term context that marked the bank’s evolution as well as the contemporary issues concerning its role in the Brazilian economy. The author argues that a national development bank such as the BNDES contributes to increasing capital formation, as it provides credit at more favorable conditions to selected projects. However, the author also argues that the presence of the BNDES loans forces the Central Bank to raise interest rates to a level that otherwise would be lower.

Maghreb leaders face a growing challenge from unions

2019 ◽  
Keyword(s):  
Interest Groups ◽  
National Development ◽  
Development Model ◽  
The Political ◽  
Structural Reforms ◽  
Political Class ◽  
Content Type ◽  
The Past ◽  
The Military ◽  
Union Structure

Significance Since President Abdelaziz Bouteflika’s ouster in April, the military-dominated interim authorities have sought to shore up their own position, including by managing the installation of new leaders in key interest groups like the Algerian General Workers’ Union (UGTA). Given the precedent set by Tunisia, where the support of the Tunisian General Workers’ Union (UGTT) for the 2011 revolution was decisive, this comes as no surprise. In Morocco, a fragmented union structure has less clout, but nevertheless protests and strikes over the past three years have played a role in calling the country’s development model into question. Impacts Algerian authorities will hold sway over the UGTA leadership, but fail to win over grassroots members, undermining the union's functioning. Tunisia’s weak political class will struggle to push through planned structural reforms against resistance from the powerful UGTT. In Morocco, strikes and protests will be isolated; they may add pressure for limited reform without threatening the political order. Rabat’s planned national development commission will offer an opportunity for unions to make their voice heard.

Conclusions

2018 ◽  
Author(s):  
Stephany Griffith-Jones ◽  
José Antonio Ocampo ◽  
Paola Arias
Keyword(s):  
Developing Countries ◽  
Renewable Energy ◽  
Exchange Rates ◽  
Interest Rates ◽  
Development Strategy ◽  
National Development ◽  
Financial Inclusion ◽  
Production Sector ◽  
New Instruments ◽  
Innovation And Entrepreneurship

Based on the seven case studies analysed in this volume, this chapter concludes that national development banks (NDBs) have been successful in many cases in supporting innovation and entrepreneurship, key new sectors like renewable energy, and financial inclusion. They have developed new instruments, such as far greater use of guarantees, equity (including venture capital) and debt funds, and new instruments for financial inclusion. The context in which they operate is key to their success. Active countercyclical policies, low inflation, fairly low real interest rates, a well-functioning financial sector, and competitive exchange rates are crucial. They are also more effective if the country has a clear development strategy, linked to production sector strategies that foster innovative sectors. Under these conditions, the chapter argues that there is great need for a larger scale of NDB activity in Latin America and in developing countries in general.

Development and validation of financial well-being related scales

2019 ◽  
Vol 37 (4) ◽  
pp. 1025-1040 ◽  
Author(s):  
Farah Diba M.A. Abrantes-Braga ◽  
Tania Veludo-de-Oliveira
Keyword(s):  
Interest Rates ◽  
Credit Card ◽  
Discriminant Validity ◽  
Well Being ◽  
Confirmatory Factor Analyses ◽  
Content Type ◽  
Convergent And Discriminant Validity ◽  
Group Interviews ◽  
Development And Validation ◽  
Additional Income

PurposeThe purpose of this paper is to develop valid and reliable scales for assessing a driver and two obstacles potentially related to financial well-being (FWB): financial preparedness for emergency, beliefs of credit limits as additional income and risky indebtedness behaviour.Design/methodology/approachThe scales were developed from scratch across six studies, employing a two-step methodology, which encompassed both qualitative (e.g. focus group, interviews) and quantitative (i.e. online surveys) data collection. Exploratory and confirmatory factor analyses were employed to test and validate the proposed scales.FindingsThis study provides a set of three parsimonious, self-reported behavioural measures that could be employed in conjunction with objective economic indicators to identify individuals who are financially ill prepared and potential candidates for delinquency. The three proposed scales achieved satisfactory levels of reliability and convergent and discriminant validity.Research limitations/implicationsThe resulting scales still need to be tested for predictive validity and in different consumer groups. The scales were validated in a single culture population (Brazil, a country that presents extraordinarily high credit card interest rates), and they should be tested cross-culturally in countries with different economic and credit policies.Originality/valueThe literature on FWB has traditionally employed objective financial indicators as an attempt to measure the concept of FWB and its elements. Self-reported behavioural measures of such constructs are scant to the point of being non-existent for some elements. This study is the first to offer scales for measuring the elements of financial preparedness for emergency, beliefs of credit limits as additional income and risky indebtedness behaviour.

scholarly journals South Africa’s economic response to monetary policy uncertainty

2017 ◽  
Vol 44 (2) ◽  
pp. 282-293 ◽  
Author(s):  
Mehmet Balcilar ◽  
Rangan Gupta ◽  
Charl Jooste
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Stochastic Volatility ◽  
Stochastic Volatility Model ◽  
Economic Consequences ◽  
Policy Uncertainty ◽  
Dsge Model ◽  
Content Type ◽  
Volatility Model ◽  
Central Bankers

Purpose The purpose of this paper is to study the evolution of monetary policy uncertainty and its impact on the South African economy. Design/methodology/approach The authors use a sign restricted SVAR with an endogenous feedback of stochastic volatility to evaluate the sign and size of uncertainty shocks. The authors use a nonlinear DSGE model to gain deeper insights about the transmission mechanism of monetary policy uncertainty. Findings The authors show that monetary policy volatility is high and constant. Both inflation and interest rates decline in response to uncertainty. Output rebounds quickly after a contemporaneous decrease. The DSGE model shows that the size of the uncertainty shock matters – high uncertainty can lead to a severe contraction in output, inflation and interest rates. Research limitations/implications The authors model only a few variables in the SVAR – thus missing perhaps other possible channels of shock transmission. Practical implications There is a lesson for monetary policy: monetary policy uncertainty, in isolation from general macroeconomic uncertainty, often creates unintended adverse consequences and can perpetuate a weak economic environment. The tasks of central bankers are incredibly difficult. Their models project output and inflation with relatively large uncertainty based on many shocks emanating from various sources. It matters how central bankers react to these expectations and how they communicate the underlying risks associated with setting interest rates. Originality/value This is the first study that looks into monetary policy uncertainty into South Africa using a stochastic volatility model and a nonlinear DSGE model. The results should be very useful for the Central Bank as it highlights how uncertainty, that they create, can have adverse economic consequences.

The problems facing agricultural sector in Zanzibar and the prospects of Waqf-Muzar’ah-supply chain model

Humanomics ◽  
2017 ◽  
Vol 33 (2) ◽  
pp. 189-210 ◽  
Author(s):  
Issa Salim Moh’d ◽  
Mustafa Omar Mohammed ◽  
Buerhan Saiti
Keyword(s):  
Supply Chain ◽  
Interest Rates ◽  
Financial Models ◽  
Agricultural Sector ◽  
Chain Model ◽  
Content Type ◽  
High Interest ◽  
Supply Chain Model ◽  
The Government ◽  
Clove Industry

Purpose This paper aims to identify the appropriate model to address the financial challenges in agricultural sector in Zanzibar. Since the middle of 1960, clove production has continually and significantly decreased because of some problems and challenges that include financial ones. The financial intermediaries such as banks, cooperatives and micro-enterprises provide micro-financing to the farmers with high interest rates along with collateral requirements. The numerous programmes, measures and policies adopted by the relevant parties to find out the solutions to the dwindling clove production have failed. Design/methodology/approach The authors will review and examine several existing financial models, identify the issues and challenges of the current financial models and propose an appropriate Islamic financing model. Findings The numerous programmes, measures and policies adopted by the relevant parties to find out the solutions to the dwindling clove production have failed. This study, therefore, proposed a Waqf-Muzara’ah-supply chain model to address the financial challenge. Partnership arrangement is also suggested in the model to mitigate the issues of high interest rates and collateral that constrains the financial ability of the farmers and their agricultural output. Originality/value The contribution of the agricultural sector to the economic development of Zanzibar Islands is considerable. As one of the important agricultural sectors, the clove industry was the economic backbone of the government of Zanzibar. This study is believed to be a pioneering work; hence, it is the first study that investigates empirically the challenges facing the clove industry in Zanzibar.

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