Evghenia Sleptsova

This thesis deals with the exporting performance of Ukraine. Focusing on the reorientation of merchandise exports, both in terms of geography – from East to West – and in terms of commodity composition, it explores the multi-level determinants of the observed picture. While until 2003-2004 reorientation from East to West appeared to be a steady trend, in 2005 this trend reversed and CIS re-emerged as a leading destination market for Ukraine’s exports. The commodity composition in trade with the EU has also hardly improved, and was more positive in trade with the CIS. Marginal improvements were observed on a more disaggregated level. These findings were confirmed in the macro-level analysis – Ukraine tends to under-trade with the external trade blocs – EU-15 and the then CEFTA, and over trade with the internal trade bloc of CIS. On a micro-level, the analysis has not revealed that trade with the EU has been associated with firm-level industrial upgrading, although FDI does increase t...

Ukraine has experienced significant changes in geographical structure of its exports, with the EU gaining a dominant share as a trading partner. The trends, however, have not been so straightforward, as trade is on the rise with CIS and Asian economies as well. Applying a traditional tool for analysing regional trade effects, the gravity model, we are trying to decompose the effects of various RTAs, at the same time controlling for trade protectionism measures. The latter exercise is more accurate in one-equation setting employed here, as it allows decomposing regional effects in a way that would be difficult to explore in a multi-country gravity model. We do this in order to clarify the conflicting findings in the literature about overor under-performance of Ukraine trade with western or eastern trade blocs and to point out aspects in external trade policy of Ukraine, which require early attention of policy makers.

Our sovereign risk indicator suggests that the risk profile of 16 major frontier markets has deteriorated continuously over the past decade. A lot of this deterioration stems from a steady build-up of public debt, which is becoming increasingly held by private creditors, making these markets more vulnerable to global financial volatility. While official public debt has grown sharply, there are also growing concerns over the surge of China's lending into these markets. Opaque and under-reported, it is also often collateralised, making it senior to bond holders. Both of these factors will make debt restructuring efforts increasingly complicated going forward-something investors should be paying particular attention to in this renewed yield-seeking environment. Deteriorating risk profile of frontier markets. Our sovereign risk indicator suggests that the risk profile of 16 major frontier markets has deteriorated over the past decade (list of countries shown in Annex). A lot of this deterioration stems from a steady build-up of public debt, increasingly held by private creditors. In the past, debt was predominantly official or concessional, and was relatively easily rescheduled through Paris Club and HIPC-type initiatives. More recently, however, the era of QE has ushered private capital into these markets, often with insufficient regard for their subpar credit metrics.

According to our scorecard, emerging markets are currently afflicted by the highest vulnerabilities to the Covid-19 pandemic. Developed markets are significantly less vulnerable, while frontier markets show the least overall vulnerabilities. The scorecard covers 27 vulnerability metrics across 161 economies. Of the four categories, EMs score worst on healthcare-related vulnerabilities, which may explain the persistence of the pandemic in these economies. In contrast, some DMs are still enduring the consequences of vacillating health-policy responses, particularly tardy lockdowns. Our scorecard gives the highest weight to economic structure, where broadly similar overall vulnerabilities across EMs and DMs mask big differences on specific issues.

Russia's $390bn "national projects" programme won't spark a growth breakthrough. We see its medium-term impact as limited to a meagre 0.1ppt-0.2ppt of GDP, due to Russia's low efficiency of investment spending and the offsetting impact of VAT hikes. The measures - an increase in public spending by about 1% of GDP financed by a 2ppt VAT hike and borrowing - contributed to a 0.3ppt growth slowdown in H1 2019 because project spending was delayed while the VAT hike was not.  We continue to project very modest growth of 1.5% over the medium term.

Our bottom-up assessment of the prospects for production across 60 sectors suggests that lockdowns are likely to reduce Russia's GDP by about 20% in April, relative to our pre-crisis baseline, and by 12% in Q2. The overall impact of lockdowns on annual GDP is about 5.2% of GDP.  Hospitality and catering, as well as retail and wholesale trade are most affected. Combining the impact of lockdowns with those of collapsed oil prices and fiscal stimulus, we see Russia's economy contracting by nearly 7% in 2020.

This thesis deals with the exporting performance of Ukraine. Focusing on the reorientation of merchandise exports, both in terms of geography – from East to West – and in terms of commodity composition, it explores the multi-level determinants of the observed picture. While until ...

As the UK prepares to leave the EU, we look at contrasting experiences of three EFTA members (one of them former): Norway, Switzerland and Austria. Focusing on the latter two as counterfactuals, we find that Switzerland's delayed participation in the single market led to meaningful productivity losses, while Austria's EU accession was accompanied by restructuring and competitiveness gains, leading to stronger economic growth.
Rather than a conscious policy choice, the respective modes of cooperation in Norway and Switzerland were a consequence of circumstances. Both applied to join the EU along with three other EFTA members, but failed to do so as a result of their referenda. Norway was left with a single market membership (EEA), while Switzerland, where even the EEA was rejected, had to go through seven years of negotiations of piecemeal bilateral agreements.
Switzerland's delayed and partial integration with the EU appears to have entailed productivity losses. In Austria, in contrast, EU membership and associated reforms have boosted productivity and added around 0.5pp to its annual GDP growth in the first decade of membership. Later studies suggest this gain has risen to a 1pp gain.
The risk of productivity losses is exactly what has been flagged in various ex ante studies on Brexit. The available historical evidence from Switzerland seems to suggest that pursuing a route of protracted bilateral negotiations and compromises would represent a step back for the UK economy.
However, neither the Swiss nor the Norwegian options seem acceptable to the UK given their embrace of all four freedoms, including free movement of people. This makes it more likely that the eventual agreement may end up being more restrictive for the UK and hence entail higher productivity and potential growth losses.