Browsing BOFIT Online (1999-2013) by series

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  • Yakovlev, Andrei; Demidova, Olga (2011)
    BOFIT Online 3/2011
    This paper considers the main consequences of the radical reform of public procurement in Russia carried out in 2005-2006. Using data from two surveys of manufacturing enterprises in 2005 and 2009 we show that before the reform firms with government stakes, old firms (established before 1992) and larger firms had advantages in access to government orders. Our analysis of the 2009 data demonstrated substantial growth in the share of firms participating in government procurements. Large firms retain their advantages in access to government orders. The fact of having fulfilled government orders in 2005 has a positive influence on a firm s participation in government procurements in 2009. Estimated scales of kickback in 2009 were virtually the same as in 2005. Our analysis of the 2009 data also revealed that factors of active restructuring of the enterprises had no influence on the enterprises access to government orders. The results of our analysis enable us to conclude that the principal goals of the radical reform of public procurement in Russia were never achieved. We discuss the reasons for this failure and provide some policy implications. Keywords: Russia, regions, corruption, government, procurement
  • Fantini, Marco (2003)
    BOFIT Online 2003/1
    On 18 November 2002, the Russian cabinet approved a plan to introduce deposit insurance.The introduction of deposit insurance is an essential condition for the modernisation of Russia s banking sector, and, in particular, for ending the near-monopoly of Sberbank, the State Savings Bank, in the retail segment.In this note, we compare the main features of the proposed system with its European and US equivalents.Although several important aspects of the Russian scheme have yet to be defined, our initial evaluation is positive.Concerns about the stability of the Russian banking system, however, remain
  • Vlasov, Sergey (2013)
    BOFIT Online 9/2013
    This study examines Russia's short- and long run fiscal sustainability. The study reveals the possible risks, if fiscal sustainability deteriorates on the general government budget level. By employing a special fiscal stress index, Russia's public finances are evaluated as sustainable in the short run. In the long run, the study analyzes advantages and limitations of the new fiscal rules, compares the new rules with the previous fiscal rules suspended during the financial crisis and discusses the possibilities for further development of the fiscal rules in Russia. The official long run socio-economic development forecast is employed for the estimates. The analysis suggests that comparing to 2012 government revenue will decrease by 7.5 p.p. of GDP by 2050, explained by the drop in oil-and-gas revenue by 8.7 p.p. of GDP. Government expenditure will decrease by 6.0 p.p. of GDP. The value of government net worth will become negative by 2050 but on the infinite projection horizon should stabilize on the safe level close to -15% of GDP. Keywords: fiscal sustainability, fiscal stress index, fiscal rules, general government budget, budget forecast
  • Simachev, Yuri V.; Yakovlev, Andrei; Kuznetsov, Boris V.; Gorst, Michael Y.; Daniltsev, Aleksandr V.; Kuzyk, Michael N.; Smirnov, Sergey N. (2009)
    BOFIT Online 2009/6
    This paper presents the results of an analytical project on the methodology for assessing and monitoring anti-crisis measures taken by the government of the RF. The paper is based on an analysis of about 100 measures in support of Russia.s real economy that were initiated in October 2008 . March 2009. Within the scope of this analysis, we singled out the main beneficiaries by industry and the size of enterprise, and estimated the effects of the measures underway in the crisis phase and in the phase of a return to economic growth. The paper also gives an account of the major risks the Russian government will face in putting into practice the measures supporting the real economy, and reveals the key problems and inconsistencies of the anti-crisis program. Key words: Russia, anti-crisis measures, economic policy, state subsidies, fiscal policy.
  • Korhonen, Iikka; Randveer, Mare (2000)
    BOFIT Online 1/2000
    This paper assesses the impacts of Economic and Monetary Union and the euro on developments within the eight most advanced accession candidates in Central and Eastern Europe.The single currency completes the project for a single market in Europe, and overall, clear efficiency gains for participating countries are expected. This should spur foreign trade with e.g. the accession countries. Accession candidates may use a variety of foreign exchange rate regimes before they join the EU, but ultimately their economic policies become a matter of common interest.Pressure to peg to the euro obviously increases as membership approaches, but there is compelling evidence that countries should hold back on pegging to the euro until they have achieved sufficient convergence to attain credibility for a policy of fixed exchange rates. Keywords: Economic and Monetary Union, Central and Eastern Europe, exchange rate policy, integration
  • Rantama, Jaana (2001)
    BOFIT Online 2001/9
    Viron, Latvian ja Liettuan pankkijärjestelmät alkoivat kehittyä 1990-luvun alussa.Alkuvaihe oli voimakkaan kasvun ja kriisien aikaa.Pankit opettelivat toimimaan markkinaympäristössä ja pankkien sääntelykehikon luominen aloitettiin.Sääntelykehikon kehittäminen jatkuu edel-leen, kun lakeja ja määräyksiä kehitetään länsimaisten standardien ja EU:n direktiivien mukaisiksi. Ulkomaiset sijoittajat, erityisesti ruotsalaiset pankit, ovat olleet keskeisessä roolissa Baltian maiden pankkijärjestelmien vakauttamisessa.Rahoituksen välitys on vahvasti pankki-en varassa, mutta etenkin Virossa rahoitusyhtiöiden merkitys on kasvanut.Osa kansainvälisesti havaittavissa olevista pankkitoiminnan kehityssuunnista on nähtävissä myös Baltian maissa: teknologian kehittymisen hyödyntäminen, rakennemuutokset fuusion ja yritysostoin sekä toimialaliukumat.
  • Taro, Lauri (1999)
    BOFIT Online 9/1999
    Russian August 1998 economic crisis effected Baltic countries more than was expected.Estonia, Latvia and Lithuania have sunk into recession.Russia remained a key trading partner and a sizeable market for all three Baltic republics exporters also after the declaration of independence despite the sometimes tense political situation.Current year s figures show a heavy decline in Baltic s exports to Russia and also decline in the growth of these economies.Growth forecasts for each Baltic country have been revised down.Food and beverage as well as processing industries as a whole have suffered the most.The decline of purchasing power in Russia due to the rouble devaluation and the weaknesses in the Russian economy will restrain Baltic countries exports to Russia for years to come. Keywords: Baltic countries, foreign trade, Russia
  • Korhonen, Iikka; Kuus, Toivo; Zirnask, Villu (2000)
    BOFIT Online 2000/5
    Securities markets are important for economic growth, providing a channel for savings flows from sectors of the economy with surpluses to sectors where the investment opportunities exceed current resources.This study describes the emergence and evolution of securities markets in three small transition economies: Estonia, Latvia, and Lithuania.While these markets are still in early stages of development, much of the requisite institutional and regulatory framework are already in place.The equity market has developed most rapidly in Estonia.In Latvia and Lithuania, the financing needs of the central government have prompted development of treasury-bill markets.Work on integrating the equity markets is underway, part of a general trend toward integration of the securities markets in the three Baltic states.
  • Koivu, Tuuli (2002)
    BOFIT Online 2002:11
    The financial sectors in the Baltic countries have developed quite rapidly over recent years and there are currently no immediate threats to their stability.However, the Baltic financial sectors are still below the level of development of the financial sectors in EU countries.The difference is remarkable both in the level of financing but also in the variety of instruments available in the markets.Even the banking sectors, which dominate the financing in the Baltic countries, are relatively small.The Baltic security markets are lagging behind the other EU accession countries and the development of that sector has been stagnant even during the recent period of growth. Key words: financial systems, banking, Estonia, Latvia, Lithuania
  • Chowdhury, Abdur (2003)
    BOFIT Online 2003/5
    Only a successful implementation of an overall reform program will enable Russian banks to provide financial intermediation and assist in the country's development from a nascent market economy to a mature financial system.The chances for reform are better now than at any time during the last decade.Favorable political and economic conditions and a change in attitude among bank management have created an unusual window of opportunity.The paper analyzes the past performance of the Russian banking industry, evaluates the reform agenda of the monetary authority, and argues for an overall reform program in order to seize the available opportunity. Key words: Russia, banking, reform
  • Saajasto, Tiina (2005)
    BOFIT Online 2005:13
    The Bank of Finland Institute for Economies in Transition (BOFIT) conducted a web site user survey on its web pages between the periods 23 May 9 September 2005.The purpose of the survey was to gather information on the use of BOFIT s web site and the sufficiency of its contents, and to request suggestions for improvement.The general impression was that BOFIT s web site is visited on a fairly regular basis and that the users seem relatively satisfied with the site.The users gave good suggestions for additional improvements. The survey results will be used for further developing BOFIT s web site. Key words: BOFIT, web site, user survey
  • Taskinen, Jukka (1999)
    BOFIT Online 7/1999
    This study overviews the current state of the Chinese state enterprises and bank reforms.Transformation of command economy into market economy has until recently been relatively frictionless, at least in retrospective to other command economies. Recently economic growth has become sluggish which has been blamed on structural factors.Corporate governance reform is recognized as the next key issue of reforms.Despite the economic weight of state owned enterprises is diminishing, the financial sector is heavily linked to the SOE.The current economic woes result from the reckless lending practices, the money was given to those with political influence instead of those deserving.Now, the amount of bad debt is threatening the stability of the financial sector. Institutions required for effective corporate governance are emerging.However, the state wants to retain control over the former state owned enterprises, which hinders the proper functioning of the market.Piecemeal reforms do not appear to suffice and there are some serious doubts of the capacity to finance the reforms. Keywords: China, Economic Reforms, State Owned Enterprises, Corporate Control
  • Shen, Jian-Guang (2003)
    BOFIT Online 2003/2
    2002 was a significant year for China s economic development in many ways.The economy continued to grow rapidly in 2002.Domestic investment - particularly public investment - surged ahead.Home buying and private car purchases became the pillars of private consumption.Exports surged despite a global economic slowdown. Expansionary fiscal policy continued to be the main policy instrument to stimulate growth in 2002.Despite this strong performance, Chinese economic growth was also deflation-prone, jobless and profitless due mainly to the distorted structure of the economy.State-owned enterprises still dominate many sectors and enjoy preferential treatment such as easy access to bank loans. Policymakers face substantial challenges in sustaining high growth in the medium term.The leadership change and the restructuring of the state asset management system could have a significant impact on the outlook for 2003 and beyond. Key words: China, macroeconomic development, policy challenges
  • Shen, Jian-Guang (2001)
    BOFIT Online 17/2001
    China's foreign exchange system currently combines a virtual peg to the US dollar with direct capital account controls.With accession to the World Trade Organisation, China's capital control regime can be expected to lose its effectiveness in the face of accelerating liberalisation of trade and investment.While the country may experience in the medium term an increase in nominal and real shocks, the easing of capital controls is an inevitable requisite promoting development of China's domestic financial markets and integration with the global trade system and capital markets.Soft pegs with wide fluctuation bands or similar arrangements that retain certain capital controls could thus be adopted in the interim.Then, as China's financial markets develop and enterprises and banks begin to adhere consistently to market principles, a more flexible foreign exchange regime such as a managed float with relaxed capital controls could be introduced. Key words: China, exchange rate system, WTO accession
  • Kaaresvirta, Juuso; Koivu, Tuuli (2008)
    BOFIT Online 2008/1
    China was able to combine slow inflation with very rapid economic growth for more than a decade. Finally, in 2007 inflation started to accelerate and there are a number of factors that may increase the pressure on China's price level in the near future. Most importantly, money supply growth is expected to remain rapid due to the ballooning foreign currency inflows. In addition, according to some estimates, economic growth has accelereated above its long-term potential and also a number of structural factors are likely to push production costs up. Counterbalancing part of the rising costs, productivity growth has somewhat accelerated during recent years. With low cost levels and fastly growing exports, China is believed to have exported deflation into its trading partners in recent years. However, due to the fact that the direct impacts of globalisation on inflation in the advanced economies have been moderate, also the effect of a possible rise in China's cost leve! l on inflation in eg euro area is expected to remain small. However, the indirect impacts on price dynamics are much more difficult to forecast. Keywords: China, inflation, monetary policy
  • Shen, Jian-Guang (2002)
    BOFIT Online 2002/5
    The Chinese economy has entered a critical stage in the beginning of 21st century.High growth continues despite the global economic slowdown and the country's difficult structural transformation. However, it will become ever more challenging to secure robust growth in the near future.The US recession and the worldwide slowdown in the demand for information technology products caused serious problems for many East Asian economies in 2001.China's export growth decelerated significantly.China's domestic demand, particularly public investment, replaced exports as a driving force in economic growth, and fiscal policy continued to be the main policy instrument for stimulating economic growth in 2001.The Chinese government continued its relatively loose stance regarding monetary policy since inflationary pressure was very mild.To meet the imminent challenges of WTO accession, China needs to tackle its non-performing loans in the banking sector and an increasingly large income disparity between urban and rural areas.Despite short-term difficulties, the prospects for China's medium- to long-term growth remain favourable.China will continue to benefit from the efficiency gains achieved in the transitions from a rural to an industrialised economy, from a centrally planned to a market one, and from a closed to an open one.Foreign direct investment will be instrumental in transforming China into a global manufacturing base.Key words: China, macroeconomic development, policy challenges, global manufacturing base
  • Sutela, Pekka (2002)
    BOFIT Online 8/2002
    Contrary to most experience, Estonia (as well as Latvia and Lithuania) has been able to combine, for a number of years, fixed exchange rates, financial liberalisation (prior to proper supervision) and large current account deficits without inviting speculation using large capital flows as vehicles.The standard argument is that this must be due to exceptionally sound fundamentals and great policy credibility.Without challenging this argument either generally or for the case of Estonia, Latvia and Lithuania, this paper offers a supplementary perspective.These countries did not aim at developing a full-scale national economy with a full set of financial and other markets, as they had the possibility of joining an institutionally, culturally and geographically close set of North-Western European markets.Such a strategy goes further than having the goal of "rejoining Europe" as the external policy anchor.Having well-developed domestic markets can in some cases be substituted by accessing near-by markets, thus leaving little leeway to potentially unstable capital flows.This option, however, is not open to all, and it also has its downside. Key words: capital flows, exchange rate systems, institutional development, financial liberalisation, Baltic countries
  • Koivu, Tuuli (2001)
    BOFIT Online 2001/8
    AbstractA deteriorating demographic situation, rising unemployment, difficulties in taxes, and a growing informal sector have created substantial difficulties during recent years for the pay-asyou-go (PAYG) pension systems in Baltic countries.For the purpose of guaranteeing solid pension systems, all three Baltic countries are implementing "three-pillar" systems, which supporters claim will be more robust to demographic changes.Latvia leads the Baltics in pension reform, having all pillars of the system working. Nevertheless, Baltic pension reform remains a politically thorny issue.This fact may delay plans to have three-pillar systems operational in all three countries by the beginning of 2003.Keywords: Estonia, Latvia, Lithuania, Pension systems, Social security
  • Laurila, Juhani (2002)
    BOFIT Online 2002/01
    The study makes an effort to elaborate the question, how Russian political, geopolitical and economic dependencies and aspirations may influence transit transport flows related to the trade between the European Union and Russia, and on Russian decisions to invest in transport infrastructures.The factors influencing on the choice of export transit transport corridors range from a number of long-term economic and geo-political security considerations of the Russian energy sector to a short-term needs to exert pressures to gain political benefits.Thus, three factors seem to have a major impact on the direction and volume the transit transport: 1) Russian national geo-strategic security considerations aiming at the maintenance of economic autarchy and spheres of interest, 2) the structure of trade between the European Union and Russia, and 3) the unwillingness of Russia to purchase from the new border republics transit transport services, available for free during the FSU era.Finally, the study contains statistics on the volumes and values of the transit transport flows between the European Union and Russia by commodity groups and by corridors (Ukraine-Slovakia, Poland-Belarus, Lithuania-Belarus, Latvia, Estonia, and Finland).
  • Funke, Michael (2001)
    BOFIT Online 15/2001
    This paper discusses the impact of Estonia's 2000 income tax law using Tobin's q theory of investment.The results indicate a net increase in the capital stock of 6.1 % over the long run.