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Experiences with Traditional Compensatory Finance Scheme and Lessons from FLEX - Esperienze dei tradizionali sistemi di compensazione finanziaria e lezioni dal caso FLEX

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This paper describes some policy instruments set up by the IMF and the European Union in order to provide financial assistance to developing countries whose economies are affected by exogenous shocks from exports side. After briefly reviewing the IMF’s CFF and the EU’s STABEX, the paper presents the operational rules of FLEX and comments on how it functioned from 2000 to 2007. The analysis shows that the FLEX facility suffered from there being inadequate finance allocated to ACPs and from delays in the financing procedure. While these constraints greatly limited the impact of FLEX in the application years 2000-2006, the 2008 FLEX revision eased them and, now, FLEX can guarantee financial support more rapidly than in the past and may more satisfactorily cover the financial requirements of ACPs coping with export earnings instability. // In questo saggio si confrontano alcuni strumenti di politica economica introdotti dal FMI e dall’UE per garantire assistenza finanziaria ai PVS che sono penalizzati dall’instabilità delle loro esportazioni. Dopo aver brevemente presentato il sistema di compensazione finanziaria (CFF) del FMI e lo schema STABEX dell’UE, l’articolo dapprima discute del meccanismo di funzionamento del FLEX e successivamente ne presenta una valutazione empirica per il periodo 2000-2007. L’analisi mostra l’esistenza di due principali vincoli del sistema FLEX. Il primo riguarda l’insufficienza delle risorse finanziarie rispetto alla domanda di assistenza proveniente dai paesi ACP, mentre il secondo vincolo è rappresentato dai ritardi con cui l’UE effettua i pagamenti. Se da un lato questi vincoli hanno fortemente condizionato l’efficacia del FLEX nel periodo 2000-2006, dall’altro lato le modifiche introdotte nel 2008 hanno migliorato e snellito il meccanismo di funzionamento del sistema. Pertanto, l’attuale FLEX può garantire assistenza finanziaria in modo più rapido rispetto al passato e può offrire una copertura finanziaria che è adeguata per far fronte agli effetti determinati dalle inattese riduzioni di breve periodo dei ricavi delle esportazioni dei paesi ACP.

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  • Aiello, Francesco Aiello, 2010. "Experiences with Traditional Compensatory Finance Scheme and Lessons from FLEX - Esperienze dei tradizionali sistemi di compensazione finanziaria e lezioni dal caso FLEX," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 63(1), pages 1-52.
    • Handle: RePEc:ris:ecoint:0587
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    1. Patrick GUILLAUMONT, 2005. "Macro vulnerability in low income countries and aid responses," Working Papers 200530, CERDI.
    2. Aiello, Francesco, 2002. "Financial stabilization systems, economic growth of developing countries and EU’s STABEX," MPRA Paper 38099, University Library of Munich, Germany.
    3. Francesco Aiello, 1999. "The Stabilisation of LDCs' Export Earnings. The impact of the EU STABEX programme," International Review of Applied Economics, Taylor & Francis Journals, vol. 13(1), pages 71-85.
    4. Aiello, Francesco, 1998. "Instabilità dei proventi delle esportazioni, crescita eco¬nomica e politiche di stabilizzazione. Il caso dei paesi in via di sviluppo aderenti alla Convenzione di Lomé," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 51(4), pages 473-496.
    5. Jean-Francois Brun & Gérard Chambas & Bertrand Laporte, 2001. "Stabex versus IMF compensatory financing: impact on fiscal policy," Journal of International Development, John Wiley & Sons, Ltd., vol. 13(5), pages 571-581.
    6. Jean‐Louis Combes & Patrick Guillaumont, 2002. "Commodity Price Volatility, Vulnerability and Development," Development Policy Review, Overseas Development Institute, vol. 20(1), pages 25-39, March.
    7. Francesco Aiello, 1999. "Effects of STABEX on ACPs' economic growth: Further evidence," Applied Economics, Taylor & Francis Journals, vol. 31(9), pages 1033-1042.
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    More about this item

    Keywords

    Budget Support; Developing Countries; Export Earnings Instability;
    All these keywords.

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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