BRICS Journal of Economics No.4 (2021)

Urban development and interethnic intolerance: Evidence from Russia

Daniil Sitkevich, Agniya Konstantinova

This work is devoted to the study of the impact of urban development on interethnic intolerance. Although studies on the impact of urbanization and the economic well-being of cities on interethnic intolerance have been conducted in other countries, no similar scientific work has been conducted in Russia. The purpose of this paper is to determine factors related to urban development that influence the level of interethnic intolerance in a Russian city and to clarify the nature of this influence. The assumption of the presence of such an influence is based on the fact that the comfort of the urban environment can play the role of an indicator of economic well-being, while the exacerbation of social conflicts during periods of economic instability is scientifically substantiated. This influence is studied using an econometric study on a sample of 66 Russian cities with a population of over 100 thousand people, where 2 or more crimes motivated by interethnic intolerance were committed during the period 2007–2019. The information base for the study
was obtained from the website of the SOVA Center for Information and Analysis, the statistical databases of Rosstat and EMISS, and the official website of the urban environment quality index. Based on the results obtained, it is concluded that interethnic intolerance is reduced due to a comfortable urban environment. Also, according to the study, in more populated Russian cities the level of interethnic intolerance is higher, whereas the incomes of city residents reduce it.

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Assessing the impact of institutions on economic growth in the BRICS countries

Ayushi Tiwari, Tridisha Bharadwaj

This study examines the impact of institutional quality on economic performance in the BRICS countries for the period from 2002 to 2019. The panel data study was estimated using pooled OLS and a fixed effect model. The study employed six institutional quality indicators (Worldwide Governance Indicators) which included voice and accountability, political stability and absence of violence/terrorism, government effectiveness, regulatory quality, rule of law, and control of corruption. The study also controlled for conventional sources of growth, i.e. human capital, physical capital, government expenditure, and inflation. All of these factors were positive and significant in our study. The findings also reveal that government effectiveness, regulatory quality and control of corruption had a positive and significant impact on economic growth in the BRICS countries, whereas other institutional variables turned out to be insignificant.

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The impact of world oil and food price shocks on the interdependence of Brazil and Russia: SVAR-DCC-GARCH model

Samkelisiwe Bhebhe, Ian Ndlovu

This study seeks to identify the extent to which global oil and food price volatilities affected the interdependence of the Brazilian and Russian economies in the period from 1996 to 2021. The ARCH/GARCH framework was used to model the volatility of oil and food prices. The Structural Vector Autoregressive (SVAR) approach was used to ascertain the sensitivity of key economic indicators to oil and food shocks. The Impulse Response Function (IRF) was used
to trace short-term effects over a period of 12 months. Subsequently, the multivariate dynamic conditional correlation DCC-GARCH model, created by Engle & Sheppard (2001), was used to model time-varying correlations of paired macroeconomic variables. This study contributes to the empirical literature in two fundamental ways. Firstly, it pairs the two largest oil and food producers in the BRICS bloc. Secondly, unlike some earlier studies, the applied methodology ensures the effectiveness of the results by using stationary time series data. The results show that Brazil and Russia have long-run spillover effects for all macroeconomic variables in response to both oil and food price shocks. Furthermore, money supply and exchange rate variables exhibited declining positive correlation coefficients during the global financial crisis of 2008–2009, but peaked in early 2020 due to the Covid-19 pandemic. As a corollary of the main findings, the researchers recommend that investors should diversify their portfolios beyond these two economies in order to minimize the risk of contagion during severe global crises.

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Analysis of the BRICS countries’ pathways towards a low-carbon environment

Agyemang Kwasi Sampene, Cai Li, Fredrick Oteng Agyeman, Robert Brenya

Global climate change has emerged as humanity’s greatest challenge, affecting both the natural security of the earth and the long-term growth of human society. Protecting the environment and fostering long-term growth while reducing carbon emissions has become a global concern. The BRICS countries (Brazil, Russia, India, China, and South Africa) are participating in the fight against climate change through the promotion of low-carbon environment (LCE). In this study, we use content analysis to discuss some of the policies, plans, and programs outlined by the various governments in the BRICS that can help them implement an LCE. The study indicates that currently Brazil, Russia, India, China, and South Africa are rated as “insufficient,” “critically insufficient,” “compatible,” “incompatible,” and “highly insufficient” respectively in their commitment to nationally determined contributions (NDC) to the Paris Agreement. The paper recommends that the BRICS countries achieve an LCE through expanding low-carbon investments and financing, focusing on taxation that goes beyond energy, investing in low-carbon cities, adapting to a circular economy and low-carbon technologies, expanding electricity markets, and promoting climate-friendly international trade among the BRICS countries.

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Effectiveness of forbearance measures for Russian commercial banks in the current crisis

Olga Vinogradova

Due to the COVID-19 pandemic, real GDP of Russia is expected to fall by 4-6%. The banking industry provides liquidity to Russian business in times of hardship. On the one hand, the Bank of Russia facilitates lending opportunities for the business and subsidizes the mortgage interest rate for banks and the public in order to prevent business bankruptcies. And on the other hand, it provides liquidity to banks via REPO (repurchase agreement) auctions. Currently, there is not enough demand for REPO transactions from banks, but it might increase after other measures of support begin to be canceled. The article studies the effectiveness of current forbearance measures for Russian banks and provides an insight into the future development of the banking industry after the COVID-19 pandemic.

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