Mozambique’s FRELIMO will struggle to stem unrest

2018 ◽  
Keyword(s):  
Private Sector ◽  
Interest Rates ◽  
Debt Crisis ◽  
Liquefied Natural Gas ◽  
Northern Province ◽  
Local Elections ◽  
Short Term ◽  
Content Type ◽  
Democratic Movement ◽  
Private Sector Development

Significance Home to major liquefied natural gas (LNG) projects, the northern province has been beset by a spate of alleged Islamist militant attacks in recent weeks, with at least 40 people killed. While the FRELIMO government has recently trumpeted progress in the protracted peace talks with rebel movement RENAMO, worsening security problems in Cabo Delgado are threatening investments that are crucial to easing a persistent debt crisis. Impacts Private-sector development will be further hindered by high interest rates and unpaid government arrears. Cooperation between RENAMO and the Mozambique Democratic Movement (MDM) may increase ahead of the local elections. Cabo Delgado terrorism could overshadow RENAMO-linked insecurity in the short term.

Brazil's local elections constrain national politics

2016 ◽  
Keyword(s):  
Economic Crisis ◽  
Local Elections ◽  
National Politics ◽  
Short Term ◽  
Municipal Elections ◽  
Content Type ◽  
Democratic Movement ◽  
Business Elite ◽  
Electoral Support ◽  
General Elections

Subject Local elections and national politics. Significance Interim President Michel Temer is impeded not only by his interim status but also by local elections due in October. Politicians may fear losing further electoral support if they side with Temer and his Democratic Movement Party (PMDB) if he is unable to tackle major problems in the short term, particularly unemployment. Impacts The business elite will side with Temer and the PMDB, but other parties will offer muted support if the economic crisis is not addressed. However, failure to ease the crisis could benefit the Workers' Party, which conversely stands to lose if Temer is successful. Parties will prioritise municipal elections over national issues to boost their position before the 2018 general elections.

Mozambican reshuffle will not ease donors' concerns

2017 ◽  
Keyword(s):  
Private Sector ◽  
Interest Rates ◽  
Short Term ◽  
Ruling Elite ◽  
Public And Private ◽  
Content Type ◽  
The Government ◽  
Leadership Changes ◽  
Public And Private Sector ◽  
Party Congress

Subject Mozambican cabinet reshuffle. Significance President Filipe Nyusi dismissed four ministers on December 12-13, subsequently reappointing two with different portfolios the next day. The reshuffle was expected following leadership changes at the ruling FRELIMO party congress in September/October. It brought in new ministers for the crucial energy and minerals and agriculture portfolios. The government is now focused on pushing through key investment decisions in the liquefied natural gas (LNG) sector in the resource-rich Cabo Delgado province, where ruling elite struggles over land, gas and access to harbour facilities are intensifying. Impacts High interest rates due to government borrowing are crowding out private-sector funding. LNG developments in Cabo Delgado could be slowed due to factional fighting within FRELIMO. Although budgetary support is frozen, there could be a short-term spike in donor aid to specific public and private sector initiatives.

scholarly journals Measuring the Effect of the Zero Lower Bound on Medium- and Longer-Term Interest Rates

2014 ◽  
Vol 104 (10) ◽  
pp. 3154-3185 ◽  
Author(s):  
Eric T. Swanson ◽  
John C. Williams
Keyword(s):  
Monetary Policy ◽  
Fiscal Policy ◽  
Lower Bound ◽  
Private Sector ◽  
Interest Rates ◽  
Zero Lower Bound ◽  
Short Term ◽  
Macroeconomic Models ◽  
Monetary And Fiscal Policy ◽  
Effectiveness Of Monetary Policy

According to standard macroeconomic models, the zero lower bound greatly reduces the effectiveness of monetary policy and increases the efficacy of fiscal policy. However, private-sector decisions depend on the entire path of expected future short-term interest rates, not just the current short-term rate. Put differently, longer-term yields matter. We show how to measure the zero bound's effects on yields of any maturity. Indeed, 1- and 2-year Treasury yields were surprisingly unconstrained throughout 2008 to 2010, suggesting that monetary and fiscal policy were about as effective as usual during this period. Only beginning in late 2011 did these yields become more constrained. (JEL E43, E52, E62)

How loan interest rate liberalization affects firms’ loan maturity structure

2014 ◽  
Vol 4 (2) ◽  
pp. 153-167 ◽  
Author(s):  
Jianfang Zhou ◽  
Jingjing Wang ◽  
Jianping Ding
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Manufacturing Companies ◽  
Short Term ◽  
Data Set ◽  
Content Type ◽  
Interest Rate Liberalization ◽  
Upper Limit ◽  
Maturity Structure

Purpose – After loan interest rate upper limit deregulation in October 2004, the financing environment in China changed dramatically, and the banks were eligible for risk compensation. The purpose of this paper is to focus on the influence of the loan interest rate liberalization on firms’ loan maturity structure. Design/methodology/approach – Based on Rajan's (1992) model, the authors constructed a trade-off model of how the banks choose long-term and short-term loans scales, and further analyzed banks’ loan term decisions under the loan interest rate upper limit deregulation or collateral cases. Then the authors used an unbalanced panel data set of 586 Chinese listed manufacturing companies and 9,376 observations during the period 1996-2011 to testify the theoretical conclusion. Furthermore, the authors studied the effect on firms with different characteristics of ownership or scale. Findings – The results show that the loan interest rate liberalization significantly decreases the private companies’ reliance on short-term loans and increases sensitivity to interest rates of state-owned companies’ long-term loans. But the results also show that the companies’ ownership still plays a key role on the long-term loans availability. When monetary policy tightened, small companies still have to borrow short-term loans for long-term purposes. As the bank industry is still dominated by state-owned banks and the deposit interest rate has upper limits, the effect of the loan interest rate liberalization on easing long-term credit constraints is limited. Originality/value – From a new perspective, the content and findings of this paper contribute to the study of the effect of the interest rate liberalization on China economy.

Mozambique juggles new interests and old problems

2015 ◽  
Keyword(s):  
Natural Gas ◽  
Liquefied Natural Gas ◽  
Traditional Agriculture ◽  
Short Term ◽  
Content Type ◽  
Electoral Support ◽  
Debt Stress ◽  
Fiscal Risks

Subject Mozambique's new government. Significance President Filipe Nyusi on January 17 unveiled his first cabinet. The line-up marks a break with the administration of former President Armando Guebuza, but balances competing factions within the ruling FRELIMO party. The new government's main focus will be to turn offshore natural gas discoveries into liquefied natural gas (LNG) exports. Declines in FRELIMO's electoral support indicate pressure to demonstrate more inclusive benefits than has been the case with previous mega-projects. Impacts Lower prices for traditional (agriculture) and megaproject exports (coal, aluminium) will continue; last year exports fell by 8.4%. With mining under stress, companies may delay production expansion planned to take place after the completion of the Nacala railway. For the short term, fiscal risks are greater than debt stress -- particular given 2014 election-related spending.

Debt crisis will delay Zimbabwe economic recovery

2015 ◽  
Keyword(s):  
Sovereign Debt ◽  
Debt Crisis ◽  
Vice President ◽  
Debt Financing ◽  
Illegal Immigrants ◽  
Short Term ◽  
Content Type ◽  
The Government ◽  
Remittance Flows ◽  
Do So

Subject Outlook for Zimbabwe's sovereign debt. Significance Secretary to the Treasury Willard Manungo earlier this month revealed that the government owes its diplomats 10 million dollars in salary arrears. It is the latest development in Zimbabwe's fiscal crunch, worsened by President Robert Mugabe's government's limited access to debt financing. This is forcing it to pursue complex, simultaneous negotiations with multiple creditors. Impacts Limited financing will hurt government plans to import 700,000 tonnes of maize necessary to address drought-induced shortfalls. South Africa's restrictive visa regime and clampdowns on illegal immigrants could begin to hurt remittance flows to Zimbabwe. Former Vice-President Joice Mujuru is unlikely to announce a new party in the short term, but may do so before polls in 2018.

scholarly journals The Impact of Government Debt Issuance on Short-Term interest rates in Indonesia

2009 ◽  
Vol 11 (3) ◽  
pp. 301
Author(s):  
Sri Adiningsih
Keyword(s):  
Fiscal Policy ◽  
Private Sector ◽  
Financial Markets ◽  
Interest Rates ◽  
Budget Deficit ◽  
Negative Impact ◽  
Government Debt ◽  
Crowding Out ◽  
Short Term ◽  
The Impact

This paper analyzes whether the expansionary fiscal policy funded by issuing debt instruments in financial markets will increase short-term interest rates. If  the expansionary fiscal policy increases interest rates, which decrease private spending especially investment, crowding out occurs. This is interesting because global economic crisis has encouraged many countries to run large budget deficits to stimulate the economy. Indonesia has also run budget deficit during this crisis and even in years before. The impact of such a policy can be significant because Indonesia’s debt market is still narrow and shallow. Therefore, its capability of absorbing the government debt instruments without influencing the private sector funding is limited. This study tests whether the crowding out occurs in Indonesia using a time series econometric model inspired by Cebula and Cuellar’s model. The Cointegration Regression and Error Correction Model (ECM) are used in this study. Monthly data from April 2000 to December 2008 are used for overnight real interbank call money interest rates, real net government bond issues in trading, real narrow money supply, real rate of one-month Certificate of Bank Indonesia, growth of Gross Domestic Product, and real net international capital flows. This empirical study shows that the crowding out problem occurred in Indonesia during the period. This indicates that financing budget deficit in Indonesia by issuing debt instruments in the financial markets has a negative impact on the private sector.

scholarly journals Mutualizing Euro Area debt without a Fiscal Union

2018 ◽  
Vol 36 (2) ◽  
Author(s):  
Stefan Krause Montalbert
Keyword(s):  
Interest Rates ◽  
Euro Area ◽  
Sovereign Debt ◽  
Debt Crisis ◽  
Limited Liability ◽  
Sovereign Debt Crisis ◽  
Short Term ◽  
Fiscal Transfers ◽  
Twin Crisis ◽  
Recent Financial Crisis

Several years have passed since the onset of the most recent financial crisis, and Europe is still not “off the hook.”  A twin crisis emerged: the sovereign debt crisis.  The main objective of this paper is to design a mechanism for pooling Euro Area debt together, in order to lower short-term interest rates, and limit the risk of contagion.  This design, which draws from existing proposals for jointly issued bonds in the Euro Area, contains features that would make it acceptable for participants (such as no ex-ante fiscal transfers across countries, and widespread benefits from lower debt-service payments), while placing a reasonable cap on potential losses from default by other participants through limited liability.

Zambian debt crisis could become entrenched

2018 ◽  
Keyword(s):  
Private Sector ◽  
Debt Crisis ◽  
National Development ◽  
Content Type ◽  
Investor Confidence ◽  
Debt Burden ◽  
The Us ◽  
Us Dollar

Subject Zambian debt crisis. Significance Debt and corruption concerns have resulted in plummeting investor confidence and escalating domestic and international criticism of President Edgar Lungu's Patriotic Front (PF) government. In turn, the PF has accused the opposition United Party of National Development (UPND) of inciting riots. Impacts Increased mining taxes could see investment, productivity and revenue decline, further undermining budget targets. The kwacha could slide further against the US dollar, exacerbating Zambia’s debt burden. Government arrears with private sector contractors could increasingly go unpaid, while costs for importers may also increase.

India’s energy demands will keep coal fires burning

2017 ◽  
Keyword(s):  
Power Plants ◽  
Thermal Power ◽  
Liquefied Natural Gas ◽  
Short Term ◽  
Indian Government ◽  
Content Type ◽  
Energy Demands ◽  
Coal Fires ◽  
Vehicle Fleet

Subject India's short-term need for coal despite long-term plan for renewables. Significance Reports indicate that NTPC, the former National Thermal Power Corporation, India’s largest state-run electricity producer, is planning to invest 10 billion dollars over a five-year period in three new coal-fired power plants. The proposal is striking in the light of India’s commitment to renewable energy and its stance on climate change. Impacts India’s plans to shift its vehicle fleet to electricity by 2030 may bring increased coal use in the long term. The Indian government may face a backlash from the urban electorate if it fails to curb air pollution from coal burning. Liquefied natural gas imports may increase in the short term if underused gas-fired power plants are brought online.

Sign in / Sign up

Export Citation Format

Share Document