Browsing by Author "Singh, Rupinder"

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  • Singh, Rupinder; Laurila, Juhani (1999)
    BOFIT Discussion Papers 5/1999
    The macro economic stabilisation in Azerbaijan has been successful. Following cessation of conflict with Armenia, and decline of GDP by 60 per cent from 1990 to 1995, the government in effect implemented a big-bang reform process in 1995.The inflation rate has now declined to the lowest rate of any transition country and important reforms in the monetary-fiscal mix have been undertaken.The second plank of first generation reforms, liberalisation, has also been successfully implemented with liberalisation of prices, the trade and foreign exchange regimes and virtual completion of small-scale privatisation, although the onset of the Russian crisis in 1998 has impacted negatively both internal and external balances.The paper presents the current economic picture for Azerbaijan and then assesses economic policy issues facing the country. Azerbaijan is well endowed with natural resources, particularly oil but also gas.The second part of the paper considers the question by focussing on policy issues related to the potential flow of oil-based monies into Azerbaijan.The possibility of the "Dutch Disease" syndrome impacting Azerbaijan through a rising real exchange rate on the non-oil sector is not considered to be a problem at present but is expected to become a policy concern in the medium- to long term.Structural reforms in public finance to deal with expected surpluses are lagging and are necessary in the next phase of the transition of Azerbaijan.Moreover, significant reforms are required in banking - privatisation, improvement in regulation and supervision and in the implementation of supporting legal rights, given the current lack of financial intermediation. Keywords: Azerbaijan, economic development, oil, Dutch Disease, transition economies
  • Singh, Rupinder (2000)
    BOFIT Discussion Papers 2/2000
    A model is presented where the question of bank regulation is developed under a principal-agent scenario in a regime where the regulator has limited resources and banks may have an incentive to act ultra virus the regulatory standards.If banks are subject to random audit, then compliance is achieved through a system of fines determined according to the extent of non-compliance.The model shows that the choice of internal monitoring of risk is driven by each bank's choice of the wage contract for its compliance officer who works for the ban for a wage.The officer's incentive for effective monitoring is heightened by the threat of an internal fine from the bank for any contravention of regulations.Moreover, either a fine on the bank or a fine on the compliance officer alone is sufficient to ensure that efficiency is achieved.The model is useful for the bank regulator in a market economy and in transition economies, where the effective constraint on regulatory capacity is addressed using market-based incentives to ensure prudent regulation and effective supervision, and thereby limit the danger of bank failure and contagion. Key words: banking, regulation, supervision, enforcement, transition economies JEL Classification Numbers: E5, G0, P2, P3
  • Singh, Rupinder (2000)
    BOFIT Online 2/2000
    After a decade of moving from plan to market economies, variations in the rate of economic reforms and performance are evident for transition countries.For many, stabilisation of economic fundamentals has given way toward the issues of creating deeper institutional and structural reforms.The evidence of successful transitions indicates a positive link between liberalisation and economic performance.However, the evidence does not fully capture the domestic country-specific choice of political regime and the degree of social consensus.This paper, part of a two-paper series, argues that these are important explanatory variables for the rate of transition chosen by a country and for sustained reforms for fast-reformers.Political stability and consensus correlate with a faster reform effort.Political instability and lack of consensus, corresponding to conflict zones, correlates with delayed reform. Evidence from transition countries shows that the countries in the latter group, e.g. countries in the Caucasus, shift to a fast-track reform process once political stability and consensus replace internal conflict.In contrast, countries with political stability but lack of consensus remain relatively stagnant in their rates of economic reforms and economic growth.
  • Laurila, Juhani; Singh, Rupinder (2000)
    BOFIT Discussion Papers 8/2000
    Published in Russian and East European Finance and Trade, vol 37, no 3 (2001), pp. 25-76
    The aim is to review transition literature for evidence that supports sequential reform strategy, as presented in this report. The second part discusses the findings in the context of Azerbaijan, a formerly socialist transition economy with interesting initial conditions.Evidence of the country's current need to focus on improving public services fits well with the sequential reform view. The authors argue that constraints captured by initial conditions (human resources, administrative capacities, traditions, etc.) necessitate sequencing of reforms and outline general aspects of a sequential reform strategy designed to expedite the transition process.The literature survey supports the Washington Consensus recommendations for starting transition with macroeconomic reforms, but over time initial conditions inevitably constrain and necessitate sequencing.In other words, reform efforts initially need to be directed across the widest possible front, but later in transition the emphasis of reform efforts needs to shift from one area to another.In the later stages, emphasis needs to be laid on improvement of public sector governance to support and promote macroeconomic reforms and formation of a healthy corporate sector. Democratic institutions arise with economic growth generated by the corporate sector.