A Possible Approach To Fiscal Rules In Small Islands Incorporating Natural Disasters And Climate Change

Author : Ryota Nakatani
Publisher : International Monetary Fund
ISBN 13 : 1513511041
Total Pages : 28 pages
Book Rating : 4.47/5 ( download)

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Download or read book A Possible Approach to Fiscal Rules in Small Islands — Incorporating Natural Disasters and Climate Change written by Ryota Nakatani and published by International Monetary Fund. This book was released on 2019-09-06 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: A big challenge for the economic development of small island countries is dealing with external shocks. The Pacific Islands are vulnerable to natural disasters, climate change, commodity price changes, and uncertain donor grants. The question that arises is how should small developing countries formulate a fiscal policy to achieve economic stability and fiscal sustainability when prone to various shocks? We study how natural disasters affect long-term debt dynamics and propose fiscal policy rules that could help insulate the economy from such unexpected shocks. We propose fiscal rules to address these shocks and uncertainties using the example of Papua New Guinea. Our study finds the advantages of expenditure rules, especially a recurrent expenditure rule based on non-resource and non-grant revenue, interdependently determined by government debt and budget balance targets with expected disaster shocks. This paper contributes to the literature and policy dialogue by theoretically analyzing the impact of natural disasters on debt sustainability and proposing fiscal rules against natural disasters and climate changes. Our fiscal policy framework is practically applicable for many developing countries facing increasing frequency and impact of natural disasters and climate change. Our rules-based fiscal framework is crucial for sustainable and countercyclical macroeconomic policies to build resilience against devastating natural hazards.

Author : Olusegun Ayodele Akanbi
Publisher : International Monetary Fund
ISBN 13 :
Total Pages : 23 pages
Book Rating : 4.08/5 ( download)

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Download or read book Calibrating Fiscal Rules written by Olusegun Ayodele Akanbi and published by International Monetary Fund. This book was released on 2023-07-31 with total page 23 pages. Available in PDF, EPUB and Kindle. Book excerpt: This technical note assesses how large shocks from natural disasters are key source of vulnerabilities for public finances. It extends the IMF Fiscal Affairs Department calibration toolkit by developing a methodology to calibrate fiscal rules in the event of natural disaster shocks and the possibility of implementing climate adaptation and mitigation measures. The features incorporated in this technical note would allow the calibration of a prudent medium-term fiscal anchor as well as annual budgetary limits that ensure the sustainability of public finances. The note is accompanied by a set of toolkits that provides instructions on calibrating a medium-term debt anchor and corresponding operational rules in the presence of natural disaster risks, accounting for climate investment and other mitigation mechanisms.

Author : Ezequiel Cabezon
Publisher : International Monetary Fund
ISBN 13 : 1513525794
Total Pages : 37 pages
Book Rating : 4.92/5 ( download)

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Download or read book Enhancing Macroeconomic Resilience to Natural Disasters and Climate Change in the Small States of the Pacific written by Ezequiel Cabezon and published by International Monetary Fund. This book was released on 2015-06-19 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: Natural disasters and climate change are interrelated macro-critical issues affecting all Pacific small states to varying degrees. In addition to their devastating human costs, these events damage growth prospects and worsen countries’ fiscal positions. This is the first cross-country IMF study assessing the impact of natural disasters on growth in the Pacific islands as a group. A panel VAR analysis suggests that, for damage and losses equivalent to 1 percent of GDP, growth drops by 0.7 percentage point in the year of the disaster. We also find that, during 1980-2014, trend growth was 0.7 percentage point lower than it would have been without natural disasters. The paper also discusses a multi-pillar framework to enhance resilience to natural disasters at the national, regional, and multilateral levels and the importance of enhancing countries’ risk-management capacities. It highlights how this approach can provide a more strategic and less ad hoc framework for strengthening both ex ante and ex post resilience and what role the IMF can play.

Author : Dongyeol Lee
Publisher : International Monetary Fund
ISBN 13 : 1484356381
Total Pages : 37 pages
Book Rating : 4.88/5 ( download)

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Download or read book The Economic Impact of Natural Disasters in Pacific Island Countries: Adaptation and Preparedness written by Dongyeol Lee and published by International Monetary Fund. This book was released on 2018-05-10 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: Pacific island countries are highly vulnerable to various natural disasters which are destructive, unpredictable and occur frequently. The frequency and scale of these shocks heightens the importance of medium-term economic and fiscal planning to minimize the adverse impact of disasters on economic development. This paper identifies the intensity of natural disasters for each country in the Pacific based on the distribution of damage and population affected by disasters, and estimates the impact of disasters on economic growth and international trade using a panel regression. The results show that “severe” disasters have a significant and negative impact on economic growth and lead to a deterioration of the fiscal and trade balance. We also find that the negative impact on growth is stronger for more intense disasters. Going further this paper proposes a simple and consistent method to adjust IMF staff’s economic projections and debt sustainability analysis for disaster shocks for the Pacific islands. Better incorporating the economic impact of natural disasters in the medium- and long-term economic planning would help policy makers improve fiscal policy decisions and to be better adapted and prepared for natural disasters.

Author : International Monetary Fund. Strategy, Policy, & Review Department
Publisher : International Monetary Fund
ISBN 13 : 149832102X
Total Pages : 55 pages
Book Rating : 4.20/5 ( download)

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Download or read book Building Resilience in Developing Countries Vulnerable to Large Natural Disasters written by International Monetary Fund. Strategy, Policy, & Review Department and published by International Monetary Fund. This book was released on 2019-06-26 with total page 55 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper discusses how countries vulnerable to natural disasters can reduce the associated human and economic cost. Building on earlier work by IMF staff, the paper views disaster risk management through the lens of a three-pillar strategy for building structural, financial, and post-disaster (including social) resilience. A coherent disaster resilience strategy, based on a diagnostic of risks and cost-effective responses, can provide a road map for how to tackle disaster related vulnerabilities. It can also help mobilize much-needed support from the international community.

Author : Miria A. Pigato
Publisher : World Bank Publications
ISBN 13 : 9781464813580
Total Pages : 240 pages
Book Rating : 4.82/5 ( download)

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Download or read book Fiscal Policies for Development and Climate Action written by Miria A. Pigato and published by World Bank Publications. This book was released on 2018-12-31 with total page 240 pages. Available in PDF, EPUB and Kindle. Book excerpt: This report provides actionable advice on how to design and implement fiscal policies for both development and climate action. Building on more than two decades of research in development and environmental economics, it argues that well-designed environmental tax reforms are especially valuable in developing countries, where they can reduce emissions, increase domestic revenues, and generate positive welfare effects such as cleaner water, safer roads, and improvements in human health. Moreover, these reforms need not harm competitiveness. New empirical evidence from Indonesia and Mexico suggests that under certain conditions, raising fuel prices can actually increase firm productivity. Finally, the report discusses the role of fiscal policy in strengthening resilience to climate change. It provides evidence that preventive public investments and measures to build fiscal buffers can help safeguard stability and growth in the face of rising climate risks. In this way, environmental tax reforms and climate risk-management strategies can lay the much-needed fiscal foundation for development and climate action.

Author : Mr. Fabien Gonguet
Publisher : International Monetary Fund
ISBN 13 : 1513583042
Total Pages : 21 pages
Book Rating : 4.44/5 ( download)

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Download or read book Climate-Sensitive Management of Public Finances—"Green PFM” written by Mr. Fabien Gonguet and published by International Monetary Fund. This book was released on 2021-08-11 with total page 21 pages. Available in PDF, EPUB and Kindle. Book excerpt: Public financial management (PFM) consists of all the government’s institutional arrangements in place to facilitate the implementation of fiscal policies. In response to the growing urgency to fight climate change, “green PFM” aims at adapting existing PFM practices to support climate-sensitive policies. With the cross-cutting nature of climate change and wider environmental concerns, green PFM can be a key enabler of an integrated government strategy to combat climate change. This note outlines a framework for green PFM, emphasizing the need for an approach combining various entry points within, across, and beyond the budget cycle. This includes components such as fiscal transparency and external oversight, and coordination with state-owned enterprises and subnational governments. The note also identifies principles for effective implementation of a green PFM strategy, among which the need for a strong stewardship located within the ministry of finance is paramount.

Author : Debarati Guha-Sapir
Publisher : Oxford University Press
ISBN 13 : 0199841934
Total Pages : 341 pages
Book Rating : 4.36/5 ( download)

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Download or read book The Economic Impacts of Natural Disasters written by Debarati Guha-Sapir and published by Oxford University Press. This book was released on 2013-05-23 with total page 341 pages. Available in PDF, EPUB and Kindle. Book excerpt: This work combines research and empirical evidence on the economic costs of disasters with theoretical approaches. It provides new insights on how to assess and manage the costs and impacts of disaster prevention, mitigation, recovery and adaption, and much more.

Author : Hidetaka Nishizawa
Publisher : International Monetary Fund
ISBN 13 : 1498320805
Total Pages : 31 pages
Book Rating : 4.01/5 ( download)

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Download or read book Fiscal Buffers for Natural Disasters in Pacific Island Countries written by Hidetaka Nishizawa and published by International Monetary Fund. This book was released on 2019-07-12 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: Pacific island countries (PICs) are vulnerable severe natural disasters, especially cyclones, inflicting large losses on their economies. In the aftermath of disasters, PIC governments face revenue losses and spending pressures to address post-disaster relief and recovery efforts. This paper estimates the effects of severe natural disasters on fiscal revenues and expenditure in PICs. These are combined with information on the frequency of large disasters to calculate the rate of budgetary savings needed to build appropriate fiscal buffers. Fiscal buffers provide self-insurance against natural disaster shocks and facilitate quick disbursement for recovery and relief efforts, and protection of spending on essential services and infrastructure. The estimates can provide a benchmark for policymakers, and should be adjusted to take into account other sources of financing, as well as budget risks from less severe as well as more frequent disasters.

Author : International Monetary Fund. Fiscal Affairs Dept.
Publisher : International Monetary Fund
ISBN 13 : 1498323146
Total Pages : 66 pages
Book Rating : 4.47/5 ( download)

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Download or read book Grenada written by International Monetary Fund. Fiscal Affairs Dept. and published by International Monetary Fund. This book was released on 2019-07-03 with total page 66 pages. Available in PDF, EPUB and Kindle. Book excerpt: Grenada has made significant strides to counter climate change but meeting the daunting remaining challenges will require domestic policy actions and sustained international support. Climate change is an existential threat to Grenada. Increasing frequency and intensity of coastal storms threatens infrastructure and livelihoods, as do increased risk of coastal flooding and drought. Notably, Hurricane Ivan in 2004 caused damages of over 200 percent of GDP. Grenada has recognized this by placing climate resilience at the center of its policy making and forging strategic alliances with key global climate finance providers. However, the challenges facing the country remain daunting and will require large increases in international support, both financial and technical, to assist the Grenadian authorities turn their impressive resilience plans into action.