Biman Chand Prasad

Export-Led Growth Hypothesis: Evidence from Papua New Guinea and Fiji

Purpose - This paper aims to examine the export-led growth hypothesis for Fiji and Papua New Guinea (PNG). Design/methodology/approach - The paper investigates the export-led growth hypothesis for Fiji and PNG who have been facing dismal economic growth performances over the last couple of decades. Findings - Findings of the study suggest that for Fiji there is evidence of export-led growth in the long-run, while for PNG there is evidence of export-led growth in the short-run. Originality/value - The findings of this paper have important messages for policy makers given that export sectors in both countries investigated are underdeveloped due mainly to a sustained period of political instability.

Tourism and Economic Growth: A Panel Data Analysis for Pacific Island Countries

The contribution of tourism to the economic growth of Pacific Island countries (PICs) has achieved significance in the past decade. The shift in the economic policies of the PICs from the late 1980s has been decisively away from import substitution and agriculture to urban-based manufacturing and services sectors. Tourism is the main component of the services sector in the PICs. The contribution of tourism to economic growth in Fiji, Tonga, the Solomon Islands and Papua New Guinea is expected to grow. The authors use panel data for the four PICs to test the long-run relationship between real GDP and real tourism exports. They find support for panel cointegration and the results suggest that a 1% increase in tourism exports increases GDP by 0.72% in the long run and by 0.24% in the short run.

The Validity of Purchasing Power Parity Hypothesis for Eleven Middle Eastern Countries

There is a large literature that examines purchasing power parity (PPP). The growth in this literature is mainly due to the absence of a consensus view on whether or not PPP holds. This paper considers PPP for 11 Middle Eastern countries using a number of tests: the one-break test unit root, the two-breaks unit root test, and the panel Lagrange multiplier (LM) unit root test with structural breaks. The main finding from univariate tests is that there is evidence for PPP in only seven countries (Lebanon, Saudi Arabia, Egypt, Iran, Syria, Tunisia and Sudan). However, when the panel LM test is applied with two structural breaks, strong evidence is found in favor of PPP for the Middle Eastern countries.

Politics of race and poverty in Fiji: A case of Indo‐Fijian community

The results of the 1999 and 2001 general election seem to suggest that the Indo‐Fijian community in Fiji voted on the issues of poverty, unemployment and lack of opportunities amongst the Indo‐Fijian community. The Indo‐Fijian community, since the military coups of 1987 and more recently in May 2000, has increasingly felt marginalised by the Indigenous Fijian led governments. The expiry of land leases and the lack of opportunities for many of them in both the rural and urban areas are a source of increasing concern. Indian politicians are also raising these concerns in their struggle for political and economic rights for the community. Based on a national survey data this article examines some of these concerns. It analyses the extent of concern about poverty, unemployment and lack of basic facilities such as water, housing and electricity among the community and draws conclusion for the future of Indo‐Fijian political and economic rights.

Productivity Differential and the Relationship between Exports and GDP in Fiji: An Empirical Assessment Using the Two Sector Model

ABSTRACT This study uses a two-sector model to determine the productivity differential between the export and non-export sectors of Fiji, and the contribution of exports and investment to gross domestic product over the period 1962–2000. Amongst our key results, we find that the productivity differential between the export and non-export sectors is small and statistically insignificant; investment to GDP ratio and weighted exports positively contribute to economic growth in Fiji; and in the abnormal years (years of coups in Fiji) marginal productivity in capital in the non-export sector is lower than in normal years.

Are shocks to real effective exchange rates permanent or transitory? Evidence from Pacific Island countries

In this article, we consider the stability of the real effective exchange rates for four Pacific Island countries using the Lee and Strazicich (2003a, b) unit root test, which allows one to incorporate at most two structural breaks in the data series. Our main finding is that for Papua New Guinea and Samoa, exchange rates are stable, implying that shocks will have a transitory effect on real effective exchange rates, while for Fiji and the Solomon Islands we find exchange rates to be unstable, implying that shocks will have a permanent effect on real effective exchange rates.

Connecting the dots: policy connections between Pacific Island shipping and global CO2 and pollutant emission reduction

The relationships between the global discourse on emissions reduction, particularly in regard to international shipping, and the need for more sustainable Pacific Island sea transport services are discussed. Renewable energy applications for such shipping are not currently considered in the drive to reduce fossil fuel dependency in the region. The domestic Pacific Island shipping scenario and international shipping and emissions reduction efforts are summarized. Data availability is limited; however, the authors extrapolate from Fiji data to give a ‘best guess’ of the likely range of emissions produced by the Pacific Island shipping and argue that reduction targets are achievable based on results of experiments in the last oil crisis. Five policy areas are identified that connect the local need with the global discourse and give rise to the promotion of sustainable, low-carbon maritime transport for this unique region.

Food security and human development

Purpose - The purpose of this paper is to provide empirical evidence of food security and human development inter-relationships for a sample of low-income countries. Design/methodology/approach - The analytical procedure involves the estimation of a reduced form equation utilising cross-country data that relates human development to food security indicators. Findings - Empirical results confirm a positive correlation between food availability, calories and protein supply and human development. Food accessibility, measured by food prices and vulnerability are found to be negatively correlated with human development. Practical implications - The implication of the findings is that poor countries should increase efforts to enhance agricultural production through an operational emphasis on farmers at a risk of food insecurity – especially low-income small holders and women farmers. Originality/value - The paper examines the effect of food security on human well being.

Institutions, good governance and economic growth in the Pacific Island countries

Purpose - The main purpose of this paper is to provide an overview of the main institutional and governance issues facing the Pacific Island countries (PIC) and to point out how they affect their economic performance. The paper also provides a description of the key characteristics of the PIC and points out why these characteristics may present special challenges to achieving sustainable levels of growth. Design/methodology/approach - This paper discusses the issues of governance, institutions and economic growth in the PICs. Findings - The main conclusion of the paper is that PICs would have to align their policies so that appropriate and better economic integration is achieved not only regionally but also globally. Practical implications - This paper allows policy makers to take note of the main issues in governance and institution building. Originality/value - This paper provides policymakers and scholars an overview of the institutional and governance issues facing the PICs.

Doubling Fish Exports or Garment Exports: Which Would Benefit the Fijian Economy Most? Evidence from a Computable General Equilibrium Model

The need to diversify Fijis export base has been identified as an important avenue for reducing Fijis vulnerabilities in international trade. This paper poses the question: Doubling fish exports or garment exports: which would be most beneficial for the Fijian economy? To achieve the goal of this paper, the computable general equilibrium model is used, this being at the forefront of research on ‘impact studies’. The main finding is that when garment exports and fish exports are doubled, the benefits to the Fijian economy are greater from garment exports, suggesting that the latter has stronger linkages with the rest of the economy. On the basis of this finding, policymakers should divert resources towards sustaining the garment industry whose future is uncertain due to expiring trade agreements and unstable economic policies.