Rico Ihle

World market integration of Vietnamese rice markets during the 2008 food price crisis

World market prices of rice have been subject to large fluctuations in recent years. In mid 2008, prices reached levels never seen before. Vietnam is a major exporter of rice and rice is also the main staple food of the country. Given the importance of rice for domestic food security, the Vietnamese government is intervening in its international trade by limiting exports in order to insulate domestic consumers from price hikes in the world market. The effects of these policy interventions on price transmission from international to domestic markets were investigated in this study. We analyzed the marketing chain of rice in Vietnam, constructed a multivariate vector error correction model for markets across the country and included a policy parameter as well asxa0an international reference price. We found reasonable cointegration of most markets analyzed and only a limited effect of the applied export policies: they suppressed the price in the main producing region, the Mekong Delta, but did not significantly affect the prices in the main deficit regions of North Vietnam. From a food security perspective, it is likely to be more efficient to implement food security programs and public safety nets that are directly targeted at the poor, rather than attempting to insulate the whole country from the world market.

Import vulnerability in the Middle East: effects of the Arab spring on Egyptian wheat trade

The ‘Arab Spring’ spilled over to Egypt from neighbouring Arab countries in the first half of 2011. General chaos during the political instabilities suddenly caused high uncertainty for consumers and traders, and temporarily rendered institutions dysfunctional. This eventually might have led to a negative market shock, impeding economic activity in general and, in particular, trade. Wheat is the main ingredient in the Egyptian diet and is heavily subsidised in the country. The general availability of cheap wheat flour creates a very high domestic demand for wheat. Therefore, Egypt is highly dependent on wheat imports from other countries for ensuring food security. This dependency makes the country vulnerable to increasing food prices and other shocks to the world market which might challenge flows of imports. This paper investigates the effects of domestic political instability on the wheat trade in Egypt. We analysed monthly trade data for wheat from the Comtrade Database of the United Nations, particularly imports and exports of wheat and wheat flour in Egypt from 2010 to 2014. The analysis showed pronounced and stable seasonal patterns whereby the pattern of 2011, the year of most intensive political turmoil in Egypt, was found to differ significantly from other years. We found robust evidence for a strong, negative demand shock in the second half of 2011 caused by the substantial and enduring political instabilities in the country which resulted from the Arab Spring.

Economic integration in the Middle East : Israeli‒Palestinian fresh food trade

Abstract Violent political conflict results in socioeconomic fragmentation and hampers economic development. In contrast, trade crucially depends on cooperation. The article empirically analyses at the micro-level whether economic interactions affect political attitudes. Trading relations between Israelis and Palestinians are found to be extensive despite the conflict. Education and personal social networks facilitate contacts. Israeli traders do not see themselves as affected by the conflict, but wish for its quick settlement. This lends support to the Rational Group Conflict Theory and the Theory of Liberal Peace. Daily contacts are found to create positive functional interdependence which may be effective in fostering reconciliation in the Middle East.

Agro-clusters and rural poverty: a spatial perspective for West Java

Neighbouring economies are likely to influence one another. The concentration of farming activities referred to as an ‘agro-cluster’ generates opportunities for income and employment in a given region and its surrounding area. We analyse the link between poverty rates and agro-clusters by accounting for spatial spillovers. To quantify agroclusters, we employ one input-oriented and one output-oriented measure. Our analysis applies six spatial econometric specifications and focuses on 545 subdistricts of West Java, where about 10% of the population live in poverty. We find that the concentration of agricultural employment substantially reduces poverty in a subdistrict as well as in neighbouring subdistricts. We also find that specialisation in crop outputs has positive impacts on poverty reduction and that localisation externalities are fundamental to agricultures success. These findings imply that policy interventions may be applied in a spatially selective manner because they will generate spatial-spillover effects on poverty reduction in surrounding areas.

The Effects of Agro-Clusters on Rural Poverty: A Spatial Perspective For West Java

ABSTRACTNeighbouring economies are likely to influence one another. The concentration of farming activities referred to as an agro-cluster generates opportunities for income and employment in a given region and its surrounding area. We analyse the link between poverty rates and agro-clusters by accounting for spatial perspective. To quantify agro-clusters, we employ one input and one output oriented measure. The analysis applies six spatial econometric specifications. We focus on the 545 sub-districts of West Java, where about 10% of the population live in poverty. The concentration of agricultural employment significantly reduces poverty in a sub-district as well as in neighbouring regions. Specialisation in primary crop outputs is associated with positive impacts on poverty. Localisation externalities are more fundamental in agriculture’s success. These findings imply that policy interventions may be applied in a spatially selective manner because they will generate spatial spillover effects on poverty ...