KeywordsEconomics and Cost Analysis
Government and Political Science
*UNITED STATES GOVERNMENT
IMF(INTERNATIONAL MONETARY FUND)
FRIENDS OF PAKISTAN
CAPITAL ACCOUNT DEFICITS
FOREIGN EXCHANGE RESERVES
FDI(FOREIGN DIRECT INVESTMENTS)
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AbstractPakistan -- a key U.S. ally in global efforts to combat Islamist militancy -- is in urgent need of an estimated $4 billion in capital to avoid defaulting on its sovereign debt. The elected government of President Asif Ali Zardari and Prime Minister Yousaf Raza Gillani is seeking short-term financial assistance from a number of sources, including the International Monetary Fund (IMF), China, and an informal group of nations (including the United States) known as the "Friends of Pakistan." The Pakistani government reportedly has reservations about conditions on the assistance, expressing concerns that the conditions may create political and economic problems. The current crisis has placed some strain on U.S.-Pakistan relations. This report will be updated as circumstances warrant.
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Starting a Foreign Investment across SectorsDe la Medina Soto, Christian; Ghossein, Tania (World Bank, Washington, DC, 2013-11)The ease of starting a foreign
investment in various sectors is a relevant consideration
for investors seeking to establish an investment project
abroad. Two thematic areas will be analyzed in this paper to
answer the following questions: Which economies impose
equity ownership restrictions on foreign investors and which
procedural barriers do foreign companies face when
establishing foreign-owned subsidiaries in these economies?
The analysis is based on findings from the Foreign Direct
Investment Regulations indicators, which measure 103
economies, on whether they restrict foreign ownership across
economic sectors and on the establishment process they
impose on foreign-owned companies. Nearly 80 percent of the
economies covered in the Foreign Direct Investment
Regulations database restrict foreign companies from
entering in some sectors of their economies. In addition,
establishing a foreign-owned company takes longer and
requires more steps than starting a domestically-owned
company in 94 percent of the economies observed. Overall,
economies in Eastern Europe and Central Asia and high-income
OECD economies have fewer equity restrictions on foreign
ownership than economies in the other regions and require
the least number of additional procedures of foreign
companies to establish a subsidiary. The findings are
significantly correlated with inflows of foreign direct
investment on a per-capita basis.
Policy Barriers to International Trade in Services : Evidence from a New DatabaseBorchert, Ingo; Mattoo, Aaditya; Gootiiz, Batshur (World Bank, Washington, DC, 2012-06)Surprisingly little is known about policies that affect international trade in services. Previous analyses have focused on policy commitments made by countries in international agreements but these commitments do not in many cases reflect actual policy. This paper describes a new initiative to collect comparable information on services trade policies for 103 countries, across a range of service sectors and the relevant modes of service delivery. The resultant database reveals interesting patterns in policy. Across regions, some of the fastest growing countries in Asia and the oil-rich Gulf states have the most restrictive policies in services, whereas some of the poorest countries are remarkably open. Across sectors, professional and transportation services are among the most protected in both industrial and developing countries, while retail, telecommunications and even finance tend to be more open. An illustrative set of results suggests that trade policies matter for investment flows and access to services. In particular, restrictions on foreign acquisitions, discrimination in licensing, restrictions on the repatriation of earnings and lack of legal recourse all have a significant and sizable negative effect, reducing the expected value of sectoral foreign investment by $2.2 billion over a 7-year period, compared with "open" policy regimes. In terms of access to services, credit as a share of gross domestic product is on average 3.3 percentage points lower in countries with major restrictions on the establishment of foreign banks as compared with those that only impose operational restrictions.
Financial Globalization in Emerging Countries : Diversification vs. OffshoringCeballos, Francisco; Schmukler, Sergio L.; Didier, Tatiana (World Bank, Washington, DC, 2012-06-29)Financial globalization has gathered
attention since the early 1990s because of its
macro-financial implications and growing importance. But
financial globalization has taken shape via different forms
over time. This paper examines two important, concurrent
dimensions of financial globalization: diversification and
offshoring. The diversification dimension refers to the
increase in foreign assets and liabilities in
countries' portfolios. Offshoring is related to the
reallocation of financial activities to international
markets. The former focuses on who holds the assets, the
latter on where transactions take place. The authors find
that globalization via the diversification channel expanded
throughout the world during the 2000s, as domestic residents
invested more abroad and foreigners increased their
investments at home, generating more cross-border holdings.
However, financial globalization via offshoring displays
more mixed patterns, with variations across markets and
countries. The paper also shows that the nature of financing
through both diversification and offshoring has improved for