ISSUE No. 6 MARCH Commodity Price Crash: Risks to Exports and Economic Growth in Asia-Pacific LDCs and LLDCs

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1 Trade Insights ISSUE No. 6 MARCH 2015 Commodity Price Crash: Risks to Exports and Economic Growth in Asia-Pacific LDCs and LLDCs AMAN SAGGU* AND WITADA ANUKOONWATTAKA** Highlights This note identifies Asia-Pacific LDCs and LLDCs 1 with export-portfolios and economies which are at greatest risk from the recent collapse in commodity prices (June 2014 to January 2015). The primary objective is to identify countries whose exports have been highly vulnerable to the recent commodity price decline, in an effort to encourage policies which promote export diversification, as well as to offer strategies for effectively managing revenues in commodity-export dependent economies. Key findings: The Asia-Pacific region is a major source of global commodity-exports. Regional economies account for 38% of global mineral and metal exports, as well as 29% of global fuel exports. There are 18 net commodity-exporters in the region, with commodity-trade surpluses ranging from 0.11% of GDP in Myanmar to 59% of GDP in Brunei Darussalam. Export revenues and economic growth are likely to be negatively impacted in these countries. Asia-Pacific LDCs and LLDCs (total of 21 nations) account for just 7% of commodityexports in the region however many have export-portfolios and economies highly reliant on one or two commodity-exports: mainly aluminium; crude oil; copper; cotton; iron ore/steel; and natural gas. The average share of total exports in just one commodity is 32%. Economic growth is at significant risk from sharp changes in commodity prices across many Asia-Pacific LDCs and LLDCs. The most vulnerable economies include: Azerbaijan, Kazakhstan, Mongolia and Turkmenistan, where commodity-export revenues account for 24-37% of GDP. Improved revenue management is the most plausible short-term strategy for insulating and stabilizing the incomes of commodity-export dependent economies from volatile commodity prices. In the long-term, structural reforms to build productive capacity such as greater investment in education and infrastructure, is required to encourage export diversification. 1 Asia-Pacific land-locked developing countries (LLDCs) include: Afghanistan, Armenia, Azerbaijan, Bhutan, Kazakhstan, Kyrgyzstan, Lao PDR, Mongolia, Nepal, Tajikistan, Turkmenistan, and Uzbekistan. Asia-Pacific least developed countries (LDCs) include: Afghanistan, Bangladesh, Bhutan, Cambodia, Kiribati, Lao PDR, Myanmar, Nepal, Samoa, Solomon Islands, Timor-Leste, Tuvalu, and Vanuatu. *Aman Saggu is a Research Assistant in the Trade and Investment Division, United Nations Economic and Social Commission for Asia and the Pacific (asaggu26@gmail.com). **Witada Anukoonwattaka is an Economic Affairs Officer, Trade and Investment Division, United Nations Economic and Social Commission for Asia and the Pacific (anukoonwattaka@un.org).

2 Introduction: the commodity price crash International commodity prices fell sharply over the second half of Oil prices in particular declined over 50% between June 2014 and December This has been described as the biggest [financial] shock for the global economy this year [2014] (Giles, 2014) and is likely to disrupt global trade flows in These events have substantial implications for economies in the Asia-Pacific region which account for around a third of global commodity imports and exports. The impact on least developed countries (LDCs) and landlocked developing countries (LLDCs) is of particular concern because many of these countries have export-portfolios and economies which are highly dependent on just one or two commodity exports. In fact, a recent paper found that across nine Asia-Pacific LDCs, % of total export receipts were derived from just three products (see Edo and Heal, 2013). The consequences for these countries may be substantial because it could result in: currency depreciation; a decline in foreign exchange earnings; a fall in export revenues; growth volatility; lower inflation; and an increase in poverty if they are dependent on employment in commodity-related industries. These countries may also be characterized by the natural resource curse a phenomenon whereby natural resource rich nations tend to experience lower economic growth than comparable natural resource poor nations 3. The recent fall in international commodity prices (June 2014 to January 2015) extended across all commodity sectors, including energy (50% decline), metals and minerals (16% decline) and agriculture (7% decline). In the energy sector, oil and gas prices fell 37-54%. In the minerals and metals markets, coal, copper, lead, tin and prices fell 12-24%, while iron ore prices plunged 47%. In the agricultural sector, corn, cotton, palm oil, and soybean prices also fell 12-26% 4. To highlight the severity of these price declines, in January 2015, the Baltic Dry Index a measure of global shipping costs for commodities fell to a 28 year low (Christie, 2015). World Bank (2015) forecasts indicate that commodity prices will continue falling in IMF (2014) forecasts similarly expect energy prices to continue declining in 2015 however their outlook on the performance of agricultural commodities is more mixed. The role of commodities in Asia-Pacific economies The overall impact of falling commodity prices on individual countries in the Asia-Pacific region depends upon the nature of their commodity trade (i.e. net commodity-exporting or net commodity-importing). It also depends upon the specific macro-financial conditions present in each country, as well as the fiscal stance with regards to fuel and agricultural subsidies. In general, for net commodity-exporting countries, a fall in commodity prices would be expected 2 Calculated using data from the Bloomberg Markets Website. ICE Brent Crude prices fell from a high of $ on 19th June 2014 to $61.01 on 16th December A recent UNESCAP working paper identifies three channels which could lead to a negative relationship between high levels of natural resource and lower levels of economic growth. This includes (a) the Dutch disease when real currency appreciation leads to a decline in non-natural resource sectors due to lower competitiveness, (b) higher volatility in terms of trade which may lower the overall efficiency of economic activities, and (c) competition over control of natural resources which could weaken governance structures and result in sub-optimal spending of revenues (see Avalos, N., Stuva, V.G., Heal, A., Lida, K., and Okazoe, N., 2013). 4 It is important to note that the prices of some commodities actually increased. In the metals and minerals market; zinc, aluminium and nickel prices increased due to export bans and supply side issues. In the agricultural market; orange, cocoa, cattle and coffee prices increased due to issues relating to crop failures and the weather. 2

3 Minerals (2009) Minerals (2013) Fuels (2009) Fuels (2013) Metals (2009) Metals (2013) Agriculture (2009) Agriculture (2013) Percentage of Total World Exports (%) Trade Insights Issue No. 6 to result in lower economic growth prospects, currency depreciation, a decline in export revenues and a deterioration of the current account. In extreme cases, countries have attempted to control capital outflows and currency depreciation using tighter monetary policy and foreign exchange interventions (e.g. Russian Federation in December 2014) 5. This has substantial implications for the Asia-Pacific region, because it contains many commodity-exporting economies and accounts for over a quarter of global fuel and metal exports, as well as over a third of global mineral exports (figure 1). At particular risk are Australia (which accounts for 28% of global mineral exports) and the Russian Federation (which accounts for 11% of global fuel exports). These two economies play a dominant role in the exports of global commodities and are the main commodity-exporters within the region (table 1). Due to the scale of their operations, they are likely to experience substantial declines in export-revenues following the recent collapse in commodity prices. Outside of the Asia- Pacific region, the European Union is also an important market, and although it has decreased its share of global commodity exports, across all sectors, over the last five years, it remains the largest exporter of agricultural products and metals in the world. Within the Asia-Pacific region, LDCs and LLDCs (a total of 21 countries) accounted for less than 2% of global commodity exports and 7% of Asia-Pacific commodity exports shares which have not changed substantially over the last five years. This suggests that these economies are price takers in the global commodity market because they have a very low market share. It also implies that they cannot influence global commodity prices through supply-side restrictions. Figure 1: Geographical structure of total world commodity exports, 2009 and % 90% 80% 70% 47% 48% 57% 58% 26% 27% 38% 38% 60% 50% 40% 30% 20% 10% 0% 10% 39% 8% 41% 13% 27% 13% 26% 41% 38% 22% 23% 10% 12% 44% 15% 41% 17% Rest of the World European Union Other Asia Pacific Asia Pacific LDCs & LLDCs China Source: ESCAP calculation based on Comtrade data accessed through World Integrated Trade Solution, (2015). Notes: Product groups are defined using the HS2007 classification with mirror data. Clusters include: 25-26_Minerals, 27-27_Fuels, 72-83_Metals, WTO_H3_Agrri and Total. 5 This approach should be used with caution as foreign exchange interventions are typically ineffective at curbing financial market volatility (see Lavigne, 2008). In fact, the Russian Federation used more than $80billion of reserves to defend their currency, yet unable to control the depreciation. Their capital outflows doubled to $151.5bilion in 2013 (Reuters, 2014). 3

4 Brunei Darussalam Azerbaijan Nauru Turkmenistan Kazakhstan Russian Federation Australia Malaysia New Zealand Mongolia Iran, Islamic Rep. Timor-Leste Indonesia Korea, Dem. Rep. Papua New Guinea New Caledonia Armenia Myanmar Trade Insights Issue No. 6 Table 1: Main Asia-Pacific commodity exporters (% of world trade) Largest Exporter 2 nd Largest Exporter 3 rd Largest Exporter Minerals (28%) Australia (3%) Indonesia (2%) Russian Federation Fuels (11%) Russian Federation (2%) Australia (2%) Malaysia Metals (12%) China (7%) Japan (4%) Korea (Republic of) Agriculture (3%) China (3%) Australia (2%) Indonesia Source: ESCAP calculation based on Comtrade data accessed through World Integrated Trade Solution, (2015) Notes: Product groups are defined using the HS2007 classification with mirror data. Clusters include: 25-26_Minerals, 27-27_Fuels, 72-83_Metals, WTO_H3_Agrri and Total. The impact of falling commodity prices on the economy of a country depends on the net commodity export position of a country in relation to the size of the economy. Across the 58 Asia-Pacific economies, 18 were in a net-export position in relation to commodities in 2013 (figure 2). This ranged from a commodity-trade surplus worth 0.11% of GDP in Myanmar to 59% of GDP in Brunei Darussalam. Export revenues and economic growth are likely to be negatively impacted in these countries over the next year due to the recent fall in commodity prices. On average, net commodity-exports accounted for around 14% of GDP across these 18 economies. The most impacted (above the average) economies include fuel-exporting economies (Azerbaijan, Brunei Darussalam, Kazakhstan, the Russian Federation, and Turkmenistan) and mineral-exporting economies (Nauru). Figure 2: Net commodity exporters, 2013 (% of GDP) 70% 60% 50% 40% 30% 20% 10% 0% Minerals Fuels Metals Agriculture Average Total -10% -20% -30% Source: ESCAP calculation based on Comtrade data accessed through World Integrated Trade Solution, (2015) and the World Bank Database, (2015). Notes: Product groups are defined using the HS2007 classification with mirror data. Clusters include: 25-26_Minerals, 27-27_Fuels, 72-83_Metals, WTO_H3_Agrri and Total. 4

5 The role of commodity exports in Asia-Pacific LDCs and LLDCs In terms of the global commodity market, the imports and exports of Asia-Pacific LDCs and LLDCs play a relatively minor role. Nevertheless, commodities constitute a major component of their export portfolios. Across these economies, fuels are the largest component of total exports (47%), followed by textiles (24%), metals and minerals (13%) and agricultural commodities (6%). Hence commodities (fuels, metals and minerals and agricultural commodities) account for around two thirds of total commodity exports. The composition of these export portfolios have not changed substantially over the last five years (2009 to 2013). Table 2: Shares of commodities in total exports Country All Commodity Largest 2 nd Largest 3 rd Largest Exports Commodity Export Commodity Export Commodity Export Timor-Leste 99% (95%) Crude Oil (2%) Coffee (1%) Natural Gas Azerbaijan 92% (90%) Crude Oil (1%) Natural Gas (<1%) Aluminium Turkmenistan 88% (82%) Natural Gas (5%) Cotton (1%) Crude Oil Kazakhstan 82% (66%) Crude Oil (5%) Copper (4%) Iron Ore/Steel Tajikistan 80% (56%) Aluminium (14%) Cotton (7%) Lead Bhutan 74% (71%) Iron Ore/Steel (2%) Copper (<1%) Coal Mongolia 74% (31%) Coal (25%) Copper (12%) Crude Oil Uzbekistan 55% (20%) Natural Gas (18%) Cotton (10%) Copper Armenia 45% (23%) Copper (8%) Aluminium (6%) Iron Ore/Steel Myanmar 41% (35%) Natural Gas (2%) Tin (1%) Copper Lao PDR 35% (29%) Copper (2%) Coffee (1%) Gold Afghanistan 33% (18%) Cotton (8%) Coal (6%) Iron Ore/Steel Samoa 21% (8%) Orange Juice (6%) Iron Ore/Steel (5%) Copper Kyrgyzstan 18% (10%) Copper (3%) Cotton (2%) Gold Solomon Islands 17% (13%) Gold (4%) Palm Oil (<1%) Cocoa Vanuatu 13% (6%) Iron Ore/Steel (5%) Rice (1%) Cocoa Nepal 12% (9%) Iron Ore/Steel (1%) Copper (1%) Aluminium Cambodia 5% (3%) Rice (1%) White Sugar (<1%) Corn Tuvalu 1% (1%) Aluminium (<1%) Iron Ore/Steel (<1%) Copper Bangladesh 0% (<1%) Copper (<1%) Cotton (<1%) Iron Ore/Steel Kiribati 0% (<1%) Copper (<1%) Iron Ore/Steel (<1%) Aluminium Average 42% (32%) (5%) (3%) Source: ESCAP calculation based on Comtrade data accessed through World Integrated Trade Solution, (2015). Notes: Product groups are defined using the HS2007 classification with mirror data. Clusters include: Aluminium ( ), Copper ), Lead ( ), Nickel ( ), Tin ( ), Zinc ( ), Gold (7108), Silver ( ), Platinum (7110), Iron/ Steel (72+73), Coal (2701), Corn (1005), Wheat (1001), Soybean (1201), Cocoa (18), Coffee (0901), White Sugar (17), Cotton (52), Orange Juice (2009), Palm Oil (1511), Cattle ( ), Lean Hogs (0203), Rice (1006), Crude Oil (2709), Gas ( ) and Total Trade. To evaluate the concentration of Asia-Pacific LDCs and LLDCs export portfolios in commodities, 25 major commodity groups are defined across three sectors (metals and minerals, fuels and agriculture). Six countries are found to be highly dependent on fuel exports: Azerbaijan, Kazakhstan, Myanmar, Timor-Leste, Turkmenistan and Uzbekistan (table 2). Crude oil or natural gas was the main commodity export of these countries, constituting between 35% and 95% of total exports in In addition, five countries are found to be highly dependent 5

6 on metal and mineral exports (Armenia, Bhutan, Lao PDR, Mongolia and Tajikistan). Aluminium, iron ore/steel, coal and copper were the main commodity export of these countries, constituting between 29% and 71% of all exports in Cotton was also a major component of the export portfolio for three countries (Afghanistan, Tajikistan and Uzbekistan). The export portfolios of around half the countries are concentrated in just one or two major commodities. In fact, the average percentage of export portfolio in just one commodity is 32%, declining to 5% for the second largest commodity export. Table 3: Shares of commodities in total GDP Country Risk All Commodity Largest 2 nd Largest 3 rd Largest Exports Commodity Export Commodity Export Commodity Export Azerbaijan High 37% (36%) Crude Oil (<1%) Natural Gas (<1%) Aluminium Turkmenistan High 26% (24%) Natural Gas (1%) Cotton (<1%) Crude Oil Mongolia High 24% (10%) Coal (8%) Copper (4%) Crude Oil Kazakhstan High 24% (19%) Crude Oil (1%) Copper (1%) Iron Ore/Steel Lao PDR Medium 13% (11%) Copper (1%) Coffee (<1%) Gold Timor-Leste Medium 11% (10%) Crude Oil (<1%) Coffee (<1%) Natural Gas Solomon Islands Medium 10% (7%) Gold (2%) Palm Oil (<1%) Cocoa Tajikistan Medium 8% (5%) Aluminium (1%) Cotton (1%) Lead Myanmar Medium 7% (6%) Natural Gas (<1%) Tin (<1%) Crude Oil Vanuatu Medium 6% (3%) Iron Ore/Steel (3%) Rice (1%) Cocoa Uzbekistan Medium 6% (2%) Natural Gas (2%) Cotton (1%) Copper Bhutan Medium 6% (6%) Iron Ore/Steel (<1%) Copper (<1%) Coal Armenia Medium 5% (3%) Copper (1%) Aluminium (1%) Gold Cambodia Low 3% (2%) Rice (<1%) White Sugar (<1%) Corn Kyrgyzstan Low 2% (1%) Copper (<1%) Cotton (<1%) Gold Afghanistan Low 1% (1%) Cotton (<1%) Coal (<1%) Iron Ore/Steel Tuvalu Low 1% (<1%) Aluminium (<1%) Iron Ore/Steel (<1%) Cotton Samoa Low 1% (<1%) Orange Juice (<1%) Iron Ore/Steel (<1%) Copper Nepal Low 0% (<1%) Iron Ore/Steel (<1%) Copper (<1%) Aluminium Bangladesh Low 0% (<1%) Copper (<1%) Cotton (<1%) Iron Ore/Steel Kiribati Low 0% (<1%) Copper (<1%) Iron Ore/Steel (<1%) Aluminium Average - 9% (7%) Average (1%) Average (0%) Average Source: ESCAP calculation based on Comtrade data accessed through World Integrated Trade Solution, (2015) and the World Bank Database, (2015). Notes: Product groups are defined using the HS2007 classification with mirror data. Clusters include: Aluminium ( ), Copper ), Lead ( ), Nickel ( ), Tin ( ), Zinc ( ), Gold (7108), Silver ( ), Platinum (7110), Iron/ Steel (72+73), Coal (2701), Corn (1005), Wheat (1001), Soybean (1201), Cocoa (18), Coffee (0901), White Sugar (17), Cotton (52), Orange Juice (2009), Palm Oil (1511), Cattle ( ), Lean Hogs (0203), Rice (1006), Crude Oil (2709), Gas ( ) and Total Trade. Asia-Pacific LDCs and LLDCs with higher levels of export-concentration in commodities are more vulnerable to fluctuations in global commodity prices. However, the adverse effects from a sharp decline in commodity prices are likely to be stronger in economies which have a higher dependency on commodity-export revenues as an engine for economic growth. Using the average shares of commodity exports in GDP and total exports of Asia-Pacific LDCs and LLDCs as a benchmark, the most vulnerable (high-risk) group consists of: Azerbaijan, Kazakhstan, Mongolia, and Turkmenistan (figure 3). To these economies, commodity-exports 6

7 Share of commodities in total GDP (%) Trade Insights Issue No. 6 account for more than 74% of total exports and commodity-export revenues account for more than 24% of GDP (table 3). In comparison, the less vulnerable (low-risk) Asia-Pacific LDCs and LLDCs would include: Afghanistan, Bangladesh, Cambodia, Kiribati, Kyrgyzstan, Nepal, Samoa, and Tuvalu. These economies have relatively diversified export-structures, and although commodity exports constitute a considerable share of total exports in some countries (e.g. 21% in Samoa and 33% in Afghanistan), the share of commodity-exports in GDP is less than 3%, which is substantially lower than the average of Asia-Pacific LDCs and LLDCs as a group. Figure 3: Shares of commodities in total exports (%) and GDP (%) 40% 35% Azerbaijan 30% 25% Mongolia Turkmenistan Kazakhstan 20% 15% 10% 5% Lao PDR Solomon Islands Average Myanmar Tajikistan Vanuatu Uzbekistan Armenia Bhutan Timor-Leste Cambodia Kyrgyzstan Tuvalu Samoa Afghanistan 0% Nepal 0% 20% 40% 60% 80% 100% Share of commodities in total exports (%) Source: ESCAP calculation based on Comtrade data accessed through World Integrated Trade Solution, (2015) and the World Bank Database, (2015). Notes: Product groups are defined using the HS2007 classification with mirror data. Clusters include: Aluminium ( ), Copper ), Lead ( ), Nickel ( ), Tin ( ), Zinc ( ), Gold (7108), Silver ( ), Platinum (7110), Iron/ Steel (72+73), Coal (2701), Corn (1005), Wheat (1001), Soybean (1201), Cocoa (18), Coffee (0901), White Sugar (17), Cotton (52), Orange Juice (2009), Palm Oil (1511), Cattle ( ), Lean Hogs (0203), Rice (1006), Crude Oil (2709), Gas ( ) and Total Trade. Other Asia-Pacific (medium-risk) LDCs and LLDCs are found to be deviating around the mean. They range from countries with very high levels of commodity-export concentration (i.e. Timor-Leste) to countries with relatively diversified commodity-export structures (i.e. Vanuatu). Commodity-export revenues across these economies range from 5% to 13% of GDP. Economic growth in these nations may be moderately affected by changes in global commodity 7

8 prices. However, countries of the same risk category may also experience substantial variation in the export-performance due to differences in export composition. For example, Tajikistan is likely to be less negatively affected by the fall in commodity prices because its main commodity export is Aluminium a metal whose price has not substantially fallen over the last year. Conclusion At the national level, the most efficacious long-term strategy for managing commodity-export dependent nations is to reduce exposure to a few commodities by adopting policies which favor economic diversification 6. The low levels of product diversification and high reliance of some Asia-Pacific LDCs and LLDCs on a few commodities can lead to volatile revenue streams, and policies are required to stabilize incomes. High-levels of commodity-export concentration also leave export-revenues and economies highly vulnerable to exogenous shocks, such as volatile commodity prices, and sharp changes in demand and supply. As the demand for commodities tends to be highly inelastic, the recent commodity price decline is likely to translate in to lower revenues and downward revisions in economic growth across net commodity-exporters and economies where export-revenues account for a larger share of GDP. In the short-run, revenue management is the most plausible strategy for insulating and stabilizing the incomes of commodity-export dependent nations from volatile commodity prices 7. It involves the development of a baseline revenue measure which represents a sustainable level of commodity production and revenue streams. A fund is then established to channel profits in excess of the baseline during commodity price booms, and these funds are repatriated during periods of low-commodity prices. To prevent political opportunism, the fund is separated from government budgets. This mechanisms stabilizes the revenue streams of governments however does not insulate commodity-producers from price volatility. The fund can also be used to finance diversification initiatives (see Box 1). In the long-run, structural reforms to encourage export diversification are necessary. Improved national infrastructure; further investment in human capital; greater transparency of government activities and expenditure; prudential macroeconomic management; and trade and investment liberalization measures can encourage companies to diversify both vertically (expanding production into upstream and downstream activities along the value chain through ) and horizontally (developing or acquiring new products different from core business). The Vietnamese government for example adopted a gradualist approach towards trade and investment liberalization. Since 1986, their structural reforms included price liberalization for agricultural commodities and a loosening of restrictions on foreign investment. The government also made a substantial investment in infrastructure, amounting to around 10% of GDP between 2001 and 2010 (Kien and Heo, 2009). These factors contributed to higher 6 Diversification does not imply industrialisation. 7 Previous studies have also proposed supply management strategies, demand management approaches, use of derivative markets, and compensatory finance schemes (see UNDP, 2011). 8

9 levels of foreign direct investment and encouraged diversification of the economy away from textiles and garments towards footwear and electronics (Nguyen, 2010). Box 1. Chilean copper stabilization fund The Copper Stabilization Fund was established in 1986 to reduce the impact of copper price volatility on the copper-export dependent economy of Chile. The fund received % of GDP, depending on the size of the budget surplus each year. In 2006, a one-off sum of $600 million United States dollars was added to the fund. The fund was replaced with the Economic and Social Stabilization Fund in The new fund received fiscal surpluses in excess of 1% of GDP. The fund was invested in highly liquid and low-risk assets such as commercial paper. At the onset of the global financial crisis, when copper prices sharply declined, the fund was used to support social, housing, pension and medical programmes. Similar revenue management systems could be used to insulate the high-risk commodity-export dependent Asia-Pacific LLDCs and LLDCs identified in this study, from volatile commodity prices. The drawback is that these schemes should be implemented during a period of higher commodity prices. Source: Gladstone (1985). 9

10 References Avalos, N., Stuva, V.G., Heal, A., Lida, K., and Okazoe, N. (2013). Papua New Guinea and the Natural Resource Curse. ARTNeT Working Paper No. 128 (August 2013). Christie, N. (2015). Commodity Shipping Measure Falls to 28-Year Low on China Demand. Bloomberg Website. Edo, P.J.M., and Heal, A. (2013). Duty-Free, Quota-Free Trade for Asia-Pacific Least Developed Countries: Overview and Update. ARTNeT Policy Brief No. 36 (September 2013). Giles, C. (2014). Winners and Losers of Oil Price Plunge. The Financial Times Website. Gladstone, R. (2015). Pension Reserve and Social and Economic Stabilization Fund. The SWF Institute. IMF (2014).Latest IMF Projections. The IMF Website. Kien, T.N., and Heo, Y. (2009). Impacts of Trade Liberalization on Employment in Vietnam: A System of Generalized Method of Moments Estimation. The Developing Economies, 47(1) Lavigne, R. (2008). Sterilized Intervention in Emerging-Market Economies: Trends, Costs, and Risks (No ). Bank of Canada Discussion Paper. Nguyen, B.G. (2010). The Challenges of Upgrading and Diversifying Vietnam's Industrial Structure. MPRA Paper. Reuters (2014). UPDATE 1-Russia's Capital Outflows Reach Record $151.5 bln in 2014 as Sanctions, Oil Slump Hit. Reuters Website, UNDP (2011). Towards Human Resilience: Sustaining MDG Progress in an Age of Economic Uncertainty. The United Nations Development Programme. 10

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