Transport Economics

Global Recession to Global Recovery:
MACRO AND MICRO DYNAMICS OF TRADE, FINANCE AND INVESTMENT

ISBN 978-93-81361-72-6 ,  Pages – 462 + xxi,  Rs.1800,  US$ 80

About the book

The book contains the selected papers presented at the Nirma International Conference on Management (NICOM 2012) organized during January 05 – 01, 2012 at the Institute of Management, Nirma University, Ahmedabad on the theme Global Recession to Global Recovery: Opportunity, Challenges and Strategies for Sustainable Growth.

Thirty four selected papers primarily dealing with issues of trade, finance and investment suggest strategies and prescribe policy implications during the transition period of recession to recovery to achieve sustainable growth. The topics like  Analytical Study on Indian Health Insurance Sector and its Sustainability; The Intra Day Volatility Discovery Process using Extreme-Value Estimators and Financial Models;  Efficient Market Hypothesis and Impact of Public Information on Stock Market: A Review of Literature; Examining Investors Rationality & the Psychological Dilemma: A Behavioral Perspective; Popularity of Plastic Money: A study of Surat City; A Study on Performance of Self Help Groups in Visakhapatnam; Merger and Acquisition Announcement Effects on Shareholder Wealth: A Case Study of Dabur India Ltd and Fem Care Pharma Ltd.;  Performance Evaluation of Nationalized Banks using Input Oriented Data Envelopment Analysis; Impact of Mergers & Acquisition on Shareholder’s Wealth & Stock Risk; Stock Market Reactions to Corporate Capital Expenditure Announcements: An Evidence from BSE Listed Companies; Filter Rule and Expected Returns during Recession Followed by Recovery: Empirical Evidence for Nifty 50 from Indian Market; Financial Market Failure or Triumphs of the Speculative Market?; Merger Announcements and Abnormal Returns: A Study of Recent Mergers in India; Financial Inclusion in India: An Initiative for Growth; Behavioral Issues Effecting Individual Investment Decisions; A Comparative Investigation of Impact of Dividend Announcement in Recessions and Recovery on Stock Prices using Event Study Approach; Financial Performance of Textile and Apparel Segment of the Indian Retail Sector: An Application of ‘Z’-Score Analysis; Risk Return in Indian Stocks: A Comparative Study of Key Perceptions; Empirical Analysis of Tracking Error of Gold Exchange Traded Funds in India; Fiscal Stimulus Packages: Recovery from the Global Crisis; Study on Gold’s Inflation Battle in Indian Economy; Impact of Global Economic Crisis on the Indian Economic System; The European Long-Term Crisis–Transforming the Economy and Marketing: The Hungarian Case;  Impact of Global Financial Crisis on Asian Market Endogeneity; Growth Performance of World Economy during Recent Global Recession: What do the ECONOMIST Data Tell us?; Subsidies in India: Evolution & Relationship with Macroeconomic Indicators; An Empirical Study of Macroeconomic FDI Determinants of India and China-Opportunities and Strategies for India;  Preliminary Estimation of Welfare Loss from Cross Subsidy in Electricity Sector in India; Migrant Workers and Mode 4; Trade in Services under GATS: A Case of India’s Higher Education; Indian Outbound Tourists’ Perceptions of Select ASEAN Destinations; Indian Agriculture and WTO: Developing Strategies for Sustainable Growth and Global Competitiveness; Evaluation of Corporate Green Initiatives towards Sustainability: An Empirical Study of Selected Industries in India;  Corporate Governance and Risk & Return Analysis with Reference to Banking Industry in India, etc. have been grouped in three sub-themes of the conference and included in the three sections of the book viz. Section I: Finance and Banking, Section II: Economics and Section III: Global Trade, WTO and Corporate Governance.

In the backdrop of global recession to recovery, the contributions made by national and international scholars highlight the various issues and the nexus between them that are emerging in the global economic environment and have addressed the role of management in implementing them for sustainable growth and development. The readers will find that the scholars have also logically underscored the factors behind these issues and put forward notable policy implications, which are extremely relevant for the current debate on recession to recovery and sustainability with respect to trade, finance and investment. The economists, researchers, teachers, policy-makers, executive of various enterprises, management consultants and the representatives of trade and industry will find the collection of these papers as thought provoking for further research in their respective areas of interest.
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Edited by – Prof.(Dr.) Pawan K. Chugan and Prof. Sameer S Pingle                                 

First Edition – 2012
EXCEL INDIA PUBLISHERS 61/28 Dalpat Singh Building, Pratik Market, Munirka, New Delhi -110067

In 1996 inrets carried out road haulage pricing surveys in seven countries in three continents, Africa, South-East Asia and Latin America, in order to gain a clearer picture of the higher cost of transport in Africa. There is a considerable variation in the unit costs of road haulage within a particular country, indeed this variation is greater than the variation between the average price in different countries. In particular, the tonnage which is transported and the distance involved have a major influence on the price per tonne x kilometre. In order to quantify the differences in price which exist between different countries it is therefore necessary to define an indicator which takes account of the main factors which determine prices, other than the country. Varied types of statistical analysis, in particular involving modelling, have been used to indicate how these parameters affect the tariffs of transport in each country and estimate the average price for each country for a particular distance or tonnage. The selected indicators all agree that over long distances road haulage is significantly more expensive in Africa than in Asia. There are differences between the African countries, Cameroon being the most expensive.

L 'inefficacité des systèmes de transport constitue probablement l 'un des principaux points
de blocage au développement des économies africaines. A la fin des années 80, peu avant
la dévaluation du franc CFA, le surcoût de transport pénalisait sérieusement la compétitivité
des produits africains exportés et renchérissait également le prix des produits consommés
sur place, ce qui a conduit notamment la Banque Mondiale à élaborer un Programme de
Politique des transports en Afrique Sub-Saharienne.

In 1996 inrets carried out road haulage pricing surveys in seven countries in three continents, Africa, South-East Asia and Latin America, in order to gain a clear picture of the higher cost of transport in Africa. There is a considerable variation in the unit costs of road haulage within a particular country, indeed this variation is greater than the variation between the average price in different countries. In particular, the tennage which is transported and the distance involved have a major influence on the price per torine x kilometre. In order to quantify the differences in price which exist between different countries it is therefore necessary to define an indicator which takes account of the main factors which determine prices, other than the country. Varied types of satistical analysis, in particular involving modelling have been used to indicate how these parameter affect the tariffs of transport in each country and estimate the average price for each country for a particular distance or tonnage. The selected indicators all agree that over long distances road haulage is significantly more expensive in Africa than in Asia. There are differences between the African countries, Cameroon being the most expensive.

Maputo is growing by a 4% annual rate. That is 50% in ten years from 1997 to 2007. With an actual population now close to 2 million inhabitants we must plan for a 4 million population in a short time and a 8 million in the long term.

This urbanization process is consistent with the low urbanized rate of the country (30%) but a rapid economic development (Annual +7% GDP) from a low GDP per Capita (600 USD). A more equilibrate urbanization has to be achieved among the secondary urban areas of the country. Specially in an elongated country (2.750 km long) with an eccentric capital location (a port related to strategic maritime routes around Good Hope Cape)

Meanwhile Maputo has to be prepared to house such large growth. Orbital Radial system cannot adequately respond. However Chinese eagerness to provide finance and build road infrastructures is not enough to provide for that sustainable future. A rational long-term vision must be provided and short term/sight infrastructure can harm, rather that benefit the metropolitan and national development.

Rail commuter is to be praised compared to many other African capitals. Frequency can be improved to build up a transit oriented development metropolis. Centralities have to be established in coordination with Land Use policies and management capacity: Economic activities, Social facilities and Housing density essential part of those centralities. We will have then Maputo… on tracks.

Addis Ababa is promoting its master Plan to be finalized in December 2013. The strong investments in Public Transport Infrastructure (LRT and BRT) need to be complemented in the long term with a truly 'Metropolitan' Mass Transit mode like the Commuter Train or Metro. A World Class Metropolis as Addis Ababa can not only rely on urban modes as the BRT and LRT. It needs a Metro, and the tracks of that Metro are there.

Addis has to understand it's structure. The star shape proposal of the 2001 Plan is today obsolete. The North Mountains to be protected provide Addis with a ‘T’ structure instead of a ‘Star’ shape. This feature has a secondary important effect. It takes Addis away from a radial-orbital to a linear-reticular one. Transport planners have understood that. Physical Planners have to become aware of it and plan Addis accordingly.

This Diagram of Addis, Metropolitan 'smilies' approach presented in this heading, provides the clues to understand the ‘meta’ structure of Addis and thus the simple growth decisions that derive from it. That is the essence of the Coup d'Oeil (Clausewitz) in Metropolitan Planning.

We have attached a file to this entry of just images. No words. Food for thought. For those who know Addis and understand planning could be enough to spring a discussion: Structuring axis? New Centralities? Growth areas? Integrated transport systems? Housing developments? Productive-activities strategy? All hints within the slides.

The structure of Nairobi Metropolis is a cross.
The four main urban corridors to Thika, Athi River, Limuru and Ongata Rongai, form a quasi perfect cross dividing Nairobi in four quadrants: North, East, South and West. Every quadrant has a different ecosystem, different directionality, and has to be planned in account of that.

The completion of the mobility structure for Nairobi must have two strategies:
1) The mass public transport: The development of centralities around the commuter stations along the branches of the cross (3) to prioritize rail access to Nairobi Center.
2) The road network: The formation of a consistent mobility network by completion of the short missing links across the existing dominating directionalities of the quadrants (3)
The result will be a homogeneous a resilient (stable equilibrium) mobility network linked to the metropolitan axes of the cross. The axes would be served by the commuter train service for access to the CBD.

The territorial (land-use) evolution of the structure will have two main tendencies:
1) The CBD economic activity expansion southwards, across the actual buffer of the Central Station and in the direction of the airport.
2) The housing land provision in response to the annual growth and need for 2,5 sq. km of new urban land. The infrastructure for that provision would be a reticular metropolitan network to the eastwards flat, featureless and environmentally poor land.

The Nairobi Propositive Analysis proposal to reshape Nairobi Metropolis on first a linear, then later reticular, structure was well accepted in-housed by the several administrative layers of the Kenyatta Government. This has to take shape through the development of the commuter train service, whose rail track layout reflects and coincides with the inner metropolitan structure of Nairobi.

Each station of the commuter train becomes an alternative centrality in the new metropolitan structure of Nairobi able to attract and to foster economic and commercial development, social facilities and housing provision. This decentralized poly-nuclear subsystem will take part of the pressure off of central Nairobi, multiply diverse location accessibilities and ease land prices and traffic congestion.

Development of these centralities (infrastructure investment, land management, social and economic governance of urban units) is the next step in this transformative process.

Nairobi is a natural capital for eastern Africa due to its continental centrality and climatic conditions. It was established in the railroad paths that link the enclaves of the continent to the seaports. Its regional setting is in the hinge of to ecosystems, including the hilly watery downs to the north that reach to the Rif Valley and the Savanna like Valley of the Athy river. It was in this confluence of ecosystems (see Amman) that the railroad station/trade post developed into a colonial capital.

Nairobi is not circular. It is linear along the frontier between the two ecosystems. This has not yet been understood and some recurrent tendency to produce orbital-radial infrastructures is producing the chaotic congestion that Nairobi suffers from today.
It is going to grow from 3 to 5 million inhabitants in the next few years and will suffer a tenfold increase from 300,000 to 3 million cars as a result of economic development. In order to avoid becoming a ghetto-metropolis, Nairobi must base its metropolitan structure along the railroad line, created and adapted to the topographic conditions on the border of both ecosystems. From Nairobi to Thyka and Ongata, the metropolis has to produce a set of centralities that will take the burden off of central Nairobi. The policy approach should include linearity served by the expansion of the commuter train services and by a reticular road network away from the congestive ring road.

Rwanda is leaping ahead with double-digit annual growth figures. Will it be a template for other African countries? Development requires infrastructure, coordinated infrastructure with a long-term vision. Not disaggregated piecemeal shortsighted incrementalist decisions. Rwanda Government is in the right path. This report presents the completion of the National infrastructure policies that are now under way with a long-term integrated vision.

Infrastructures: Rwanda primary backbone and excellent secondary road network will require a new layout, independent from interferences, to achieve full development. The size of the country allows for 30 km interurban connections (IE: Kigali-Muhanga) in the 15-minute range, not 1 hour: a network independent from city centers and urban areas.
Infrastructures must achieve synergies. Main highways, trains and airports have to be synchronized with the urban structure, avoiding dispersion of efforts.

Housing: Expected urban growth will move 2 millions Rwandese to cities in the next 8 years. This will require the production of 70.000 housing units every year, of which 50%, 35.000, in Kigali and 2.500 units each year in each of the 14 secondary urban centers. Houses for the 60-dollar month lower income migrants. Only a small percentage will be provided directly by the private sector to the higher incomes. Direct involvement of the public sector will be required for the production of at least 50% of those figures. With 10.000 USD units in a 5.000 USD/unit serviced land these 35.000 (really) affordable housing units will require an annual finance of 600 million USD: 8% of the GDP and 25% of the National Budget. Can the Rwanda afford it?

Rwanda can neither afford reports that discuss the need for further reports, reports that take 5 years to bring any implementable solution. Rwanda has no time for that. Kigali doubles every 9 years. Every year 35.000 houses are not built, the deficit will grow and the burden put on the future, until that future is at risk. If 35.000 houses a year is a difficult task (now producing less than 9.000) what about 70.000, or 140.000?
Reports should set up straightforward solutions. They should frame and balance the problem in the large context even though quantitative precision is later required to maximize investment efficiency and budgetary accuracy. We embrace reports that take risks being direct and clear, reports that are applicable for policy making and not just for expert discussion. We think those reports are the useful ones for Rwanda. That is our bet.

Kigali is one of the fastest growing cities in the world. The challenges Kigali is confronting have to be addressed at a strategic long-term vision for the structure of the Metropolis beyond the limited urban scale of a Master Plan. That way Kigali will be able to allocate correctly the land use functions in the short term with a sustainable long-term approach. The need for metropolitan facilities and infrastructures are limited by budgetary constraints. Need of them for the future requires nevertheless the right of way actual preservation within a vision of the future metropolitan structure in the waiting for the right financial conditions.