Impact of raising tax rates in GDP growth: The case of Nepal

This study is an effort to examine whether there is a potential of variations in tax efforts of different types in making a positive impact on economic growth in a typical developing economy. We take the case of Nepal and analyse 44 years (1975–2018) of time series data of growth and fiscal variables. We conclude that Nepal has already reached its optimal tax GDP ratio. Additional efforts to collect more tax revenue are counter-productive; rather, it should take some other structural measures for higher GDP growth. Implementation of several scenarios of revenue replacement does not have a significant positive impact on GDP; however, minimising the contribution by excise duties but replacing its contribution by income tax has minimal positive impact on GDP. It refers to the need to protect Nepalese infant industries at this juncture of the fiscal-growth discourse of this small developing economy.

A Quantitative Relationship Analysis of Industry Shifts and Trade Restructuring in ASEAN Based on Multiregional Computable General Equilibrium Models

This paper provides an in-depth study and analysis of the quantitative relationship between ASEAN industry transfer and nuclear trade restructuring through the multiregional computable general equilibrium (CGE) model and categorizes the ten major projects and 57 subprojects covered by the ASEAN Information Port project investment into construction, information technology, and telecommunications, according to the key directions of investment. We design and simulate the changes in production activities, trade activities, and the balance of payments behaviour of the national economy affected by the project’s investment under 10 types of investment amount scenarios and prepare the corresponding social accounting matrix (SAM). Increased trade openness increases external risks and instability of the economy and fiscal revenues. At the same time, it creates other potential problems for the country such as environmental pollution and leading to unfair competition. Under free trade conditions, some manufacturers may choose to produce inputs that are not environmentally friendly to reduce costs, thereby harming the environment. For infant industries, if the government does not provide them with short-term protection or supportive policies, these new or developing infant industries may not have strong international competitiveness and may be vulnerable to the attacks of mature industries in the world. Therefore, based on the study of the influence of tax policy on trade openness, this paper examines the impact of changes in trade openness on a country’s economic environment and takes tax revenue as an example to conduct an empirical analysis and improve the factors that need to be considered when adjusting tax policy.

The Problems of Africa’s Industrialization Substitution Strategy and Reformation Needs

This study showed that industrialisation by substitution of imports has been a failure in Africa and has made industries in this part of the world less competitive on the foreign market. As such, a different industrialisation strategy which in the context of globalisation of economies and the fierce competition of the international market reinforces the competitiveness of African countries. This new strategy was translated amongst others by the appropriation of new technologies, protection of infant industries, cloning of manufactured products imported out of Africa, regional integration and the culture of exporting manufactured products.

US-Kenya trade pact may undermine African aspirations

Subject Implications of US-Kenya trade talks. Significance US President Donald Trump and Kenyan President Uhuru Kenyatta announced in February that the two countries intend to start negotiations to establish a bilateral free trade agreement (FTA). This would be the United States’ first FTA with a Sub-Saharan African country and is the strongest signal yet that the African Growth and Opportunity Act (AGOA), the main framework governing US-Africa trade since 2000, will not be extended. Impacts Opening its markets to US goods too quickly could derail Kenya’s infant industries, especially agribusiness and apparel manufacturing. A deal could spur significant US investment into Kenya, which could help the country integrate into global value chains. A deal could be structured to support regional integration, but Trump’s ‘America first’ approach suggests a focus on benefits to US firms.

US-Africa trade framework faces a crossroads

Subject Outlook for the African Growth and Opportunity Act. Significance The African Growth and Opportunity Act (AGOA) has been the main channel for US-Africa trade for almost two decades, yet new developments have raised questions about both its current utility and its future prospects, as a growing number of African states have had their AGOA privileges rescinded or threatened, and US officials warn they may not extend AGOA beyond 2025. Impacts Individual FTAs could undermine African states’ infant industries, threatening livelihoods and possibly accelerating de-industrialisation. US efforts to deliver a replicable ‘model’ FTA have faltered, diminishing the chances of securing FTAs across Africa before AGOA expires. Cameroon’s loss of AGOA benefits is unlikely to change its human rights practices significantly.

Jean-Baptiste Say on Free Trade

Jean-Baptiste Say is generally portrayed as an unrelenting champion of laissez faire who believed commercial activity promoted economic well-being. However, I develop a more nuanced portrait of Say’s thinking by showing that he did not believe that free trade was an unmitigated good. He thus identified several exceptions to free international trade that justified government intervention in the form of restrictions on imports and public subsidies to domestic industries. Going beyond Adam Smith’s arguments for protective tariffs, Say maintained that government could play a role to protect infant industries, insisting on the fact that protectionism could only be gradually and carefully removed. Drawing upon Say’s published writings and archival sources, I show that Say developed original views on domestic and international trade, several of which were distinct from those of Smith. Overall, Say’s analysis of free trade sheds greater light on his conception of the role of government in a market economy. It illustrates under what conditions the government should intervene in order to achieve both economic efficiency and social justice.