Exchange Rate and Trade in Services Nexus in Nigeria: A Non-Linear ARDL Approach

A nonlinear ARDL model is employed to investigate the asymmetric drivers of non-oil trade in services between Nigeria and Netherlands. A significant number of past studies have concentrated their attention on the elasticity of trade in services to real exchange rates and income as well as on non-oil export, total export trade or import, yet none have delve into asymmetric relationship. This study aims to fills this void. Our result shows that the effects of exchange rate variations have both positive and negative displays with more negative asymmetry. This provides further insights in the nature of service asymmetries. (JEL Codes: C22, D43, E31, L71, Q41) Keywords: asymmetric cointegration, exchange rate adjustment, disaggregated, services

Estimating the oil revenues of Iran premised on the US - Iran relationship analysis

The Islamic Revolution of 1979 has filpped Iran's foreign policy around and country has changed cooperation with the West for confrontation with it. In this regard, over the past 40 years, relations between Iran and the US have had mostly negative dynamics, the country has been permanently under sanctions. During these 40 years, there were periods of exacerbation, in particular in 2006-2013 and after 2018, when the United States imposed serious sanctions against Iran, in particular against the country's oil and gas sector. Thanks to the nuclear deal, bilateral relations entered a short period of relief, that allowed Iran to increase its economic activity. The election of Donald Trump as US President with his aggressive foreign policy, has become the reason for the renewal of sanctions, a reduction in Iranian oil imports and Iran's loss of its positions in the global economy. The 2020 US presidential election has given new impetus to bilateral relations. Trumps opponent Joseph Biden has announced his plans for a softer policy, including relations with Iran. Certain difficulties for Iran in rebuilding the relations and its positions in the world economy arised in view of the presidential elections in the country, due to victory of the conservatives, who do not intend to conduct a constructive dialogue with the West. All these factors are decisive for the future international position of the country, especially in the oil market. As one of the key players in this market, Iran plays an important role in maintaining the balance, especially amid low oil demand caused by the coronavirus pandemic. In this regard, the country's oil export capabilities based on the above factors are analyzed and the most optimal option is esteemed.

On Exports and Capital Formation in Nigeria

One remarkable importance of exports is that it enables countries generate the required foreign capital needed to drive sustainable growth and development. This is to say that export earnings are capable of increasing capital formation through real investment. This study therefore focused on the impact of exports to capital formation in Nigeria for a 40-year time period spanning from 1981 to 2020. Related works on the subject matter were reviewed. The unit root test showed that all the variables attained stationarity after first difference. The Johansen cointegration test result showed that there exists a stable long run relationship between gross fixed capital formation, oil export, non-oil export and exchange rate in the model. Using the ordinary least square (OLS) estimation technique in analyzing the data sourced, the results showed that oil export had a negative and insignificant impact on capital formation in Nigeria. Similarly, non-oil export and exchange rate exerted insignificant negative influences on capital formation in Nigeria for the period covered by the study. Based on the findings from the study, the following recommendations were made. First is that the proceeds from crude oil export should be used to acquire capital assets for investment which will in turn drive growth in the economy. Also the government through the central bank of Nigeria (CBN) and relevant agencies should pay more attention to the non-oil sector in terms of the implementation of favourable policies, grants and loans, tax incentives, research and development, etc. to improve the export of the sector, making it compete favourably in the international market. This is because crude oil is an exhaustible asset that is liable to depletion. Finally, efficient exchange rate policies should be implemented by government through the relevant authorities to protect the value of the naira while ensuring that the products are not too dare in the international market.

The Significance of Military Expenditure, Tourism, and Exports for Sustainable Economic Growth

The current empirical study addresses the recent economics of Saudi Arabia such as the uncertainty of economic growth and dependence on oil export. For this purpose, labor, capital, oil price, terrorism, military expenditure, tourism, and exports are added to the analysis. ARDL long-run and short-run analyses are used, and the results of the study have revealed that labor is negatively related to economic growth, which suggests that efforts should be done to reduce dependence on international labor through the installation of production facilities in those countries where labor is cheap. Also, it is noted that capital, tourism, and non-oil exports enhance economic growth, whereas oil price is the main problem for the economic growth of the country. These results suggest that the diversification of exports to non-oil products is a good strategy to boost economic growth. Alongside, domestic tourism should be promoted to enhance its share in economic activities. The current study helps the policy makers to open new earning avenues such as enhanced tourism sectors and modernized industries which help in technology exports.

Long-Run Determinants of Nigerian Inflation Rate: ARDL Bounds Testing Approach

Inflation is a problem in all facets of life and all economic entities. The government of any nation is concerned with ensuring that her plans are not frustrated by unpredictable and galloping prices. This paper studies the dynamic causal relationship between inflation rate (measured by consumer price index (CPI)), exchange rate, gross domestic product (GDP), money growth, and oil export in Nigerian during 2005: Q1 to 2019: Q4. The ARDL bounds testing approach and error correction model were used to verify whether there was a long-term relationship between the inflation rate and four determinants (exchange rate, GDP, money growth, and oil export). The results of our study showed that the current inflation CPI, the exchange rate, GDP, and money growth would still affect the next quarter's inflation rate in Nigeria. However, the oil export has no significant effect on the inflation rate. Moreover, we find the long-run cointegration relationship between inflation CPI, the exchange rate, and money. The cointegration relationship will be achieved in a short time (during the next two quarters of the year).

Caspian Oil and Gas Leverages Strengths To Survive in a Low-Carbon World

Nearly 30 years ago as the Soviet Union lay in tatters, Azerbaijan and Kazakhstan signed off on the Caspian’s first oil and gas megaprojects, hoping to guarantee their independence by transforming the region’s energy landscape and their role in it. Nursultan Nazarbayev, then president of Kazakhstan, took the first step in April 1993 by creating Tengizchevroil (TCO), a joint venture between Chevron and Kazakh state oil company KazMunaiGaz, to develop the super-giant Tengiz oil field and nearby Korolev field. Today, Chevron still holds 50% of the venture, ExxonMobil controls 25%, KazMunaiGaz, 20%, and LukArco, a subsidiary of Russia’s Lukoil, 5%. A year and a half later, in September 1994, Azerbaijan’s president, the late Heydar Aliyev, signed a production-sharing agreement (PSA) to develop the deepwater reserves of the Azeri, Chirag, and Gunashli (ACG) fields, attracting the participation of a “who’s who” of the world’s oil and gas elite—13 global companies representing eight countries. These and other signings had a knock-on effect as more upstream megaprojects popped up across the region in the late 1990s and throughout the early 2000s, attracting more international participation and the need to develop midstream infrastructure such as Azerbaijan’s Baku-Tbilisi-Ceyhan pipeline (BTC) export line to Turkey and Kazakhstan’s Caspian Pipeline Consortium (CPC) to Russia’s oil export terminal at Novorossiysk, as landlocked Central Asia devised ways to get its crude oil to market. For a generation, the Caspian’s top-heavy “bigger is better” way of doing things, led by global majors, did a good job of attracting upstream investment. But what about the next generation as those same supermajors rebrand and shift their portfolios to produce more energy with less carbon? Ashley Sherman, research director at Wood Mackenzie for upstream oil and gas, predicted in June that Caspian oil and gas production will continue to grow in this decade as already-committed oil and gas investments percolate through the system (Fig. 1). These investments, however, target expansion and optimization of existing operations. Thus, by 2030, upstream capital expenditures are likely to be at only half of their 2019 levels, Sherman wrote. BP and Socar’s (the state oil company of the Azerbaijan Republic) deepwater Shafag Asiman discovery in Azerbaijan may be an exception, but while a first exploration well drilled and completed in March detected gas condensate, the well was suspended pending further evaluation and possible drilling of a sidetrack appraisal well, BP said in a news release. The block lies 125 km (78 miles) southeast of Baku in an unexplored area in 650-to-800 m water depths. It is likely that tomorrow’s Caspian upstream will look a lot like today’s Caspian upstream, which is dominated by five projects: the onshore Tengizchevroil and Karachaganak projects in Kazakhstan; shallow-water offshore Kashagan, also in Kazakhstan; and Azerbaijan’s offshore deepwater ACG and the Shah Deniz gas field. While each of these projects elicits a definite “wow” factor in terms of sheer size, it is worth noting that the PSAs on which most of the projects are based will expire in the 2030s, though some remain in effect into the 2040s.

China-Venezuela Relations: China Dilemmatic Options towards Venezuela Crisis and the Role of China Community of Common Destiny Principles in Maintaining Cooperation

Oil prices directly impact Venezuela's circumstance due to 95% of their revenue come from oil export. Since 2013, oil prices drop significantly compared to the previous year. Thus, the crisis hits Venezuela severely. The impacts not only feel in domestic level but also in international level. China is Venezuela's bilateral partner that was impacted by the Venezuela crisis. Venezuela failed to fulfill their oil export to China to pay their loan in the oil-for-loan diplomacy scheme. Thus, their cooperation failed to fulfill the economic gain. However, China still shows the action that favorable Venezuela. Backing up non-intervention toward Venezuela in the UN, provide new loan and adjust the payment of the previous loan also diversify their investment in Venezuela. This paper argues that this action is no more for merely material gain. But it is the action that is based on the newly ideational aspect of China's foreign policy, which is the China Community of Common Destiny. Thus, this research will analyze how this rhetoric idea involves China's action towards Venezuela. Also, this research will address their relations and China's diplomatic option toward their relations with Venezuela in crisis circumstances.