CAPTION: FBE Research Team awarded GDN grant: from left- Mr Baljeet Singh, Professor Biman Prasad and Dr Hong Chen. Photo: USP.
Three academics from the University of the South Pacific’s School of Economics have received a competitive research grant of US$24, 000 from the Global Development Network (GDN).
The research team composed of Mr Baljeet Singh, Dr Hong Chen and Professor Biman Prasad, is one of the four teams that has been awarded the grant, to conduct a research on Growth Volatility in Pacific Island Countries: A Cross-Country Perspective.
The vulnerability of countries to macroeconomic instability around the world was exposed with the beginning of the ongoing global financial crisis. This led to a call for the need to relook, amend and introduce new policies to deal with the challenges posed by this instability.
GDN then initiated a research competition with funds provided by the Institutional Capacity Strengthening Fund (ICSF) and managed by Inter-American Development Bank (IDB), aiming to provide competitive research grants to four comparative and systematic research studies, which would help improve readers’ understanding about macroeconomic volatility.
Principal researcher, Mr Baljeet Singh, who has also been a senior participant in GDN-ODN projects, said the team was honoured to have been awarded the grant.
“It is a very prestigious award, and this is the first time the School has received it. It is a very competitive process, because it is a global competition,” Mr Singh said.
The proposed study will examine growth volatility in Pacific island countries, since macroeconomic volatility is a prominent feature in the region.
“Macroeconomic volatility is a pressing issue, at the moment. And it has come at the same time as the University is putting emphasis on research clusters,” Mr Singh added, citing the University’s commitment to indoctrinate research values on issues affecting the Pacific region, including issues to do with economic growth, trade and integration, which is one of the research clusters.
Fellow researcher, Dr Hong Chen mentioned that in the last decade, Pacific island countries have had an average annual growth rate as low as 0.6 percent which however was subject to volatility, and as high as 4.49 percent.
Dr Chen said macroeconomic volatility to a great extent, arises internally from changes in domestic environments characterized by adjustment of economic structures, vulnerability to natural disasters, changes in fiscal and monetary policies, exchange rate volatility, and political instability.
“Changes in external environments can also bring volatility to small Pacific economies through the channels of international trade, financial liberalization, foreign direct investment, fuel price fluctuation, remittances, and tourism industry’s development,” Dr Chen added.
She said that the study will be broad, with an overview that will give a background of macroeconomic volatility issues in the countries they will examine, with an extensive literature review. The research team will also be exploring internet databases, such as the UN Database.
The research team will conduct the study through a comparative perspective that will enable readers to have a firm understanding of the issue of macroeconomic volatility in countries in the Pacific region.
The project will conclusively draw policy suggestions to reduce macroeconomic volatility and to strengthen the resilience capabilities of countries in the Pacific region to reduce the adverse effect of such volatility.
Mr Singh said the team would like to conduct on-field research work, visiting Pacific island countries which will be able to provide data and feedback from policy makers and at the same time, create awareness of the study.
Some of the countries that have been identified as potential areas for the study are Fiji, Kiribati, Papua New Guinea,Samoa, Solomon Islands, Tonga and Vanuatu.
He thanked the Oceania Development Network (ODN) that supports the work of the GDN in the Pacific region, and the Chair Professor Biman Prasad for guiding and supporting staff’s research activities.
The team applied for the grant in April 2012, and was informed by June 2012 that their proposal had been shortlisted. Award of research grant was finalized in April 2013. The team will have to submit a draft report to the GDN by June, 2013, but have time to fully conduct and compile research till April 2014.