Determinants of Clove Exports in Zanzibar: Implications for Policy

Abstract

Clove is one of the high value spices that have supported the economy of Zanzibar for many decades since the 18 th Century. However, clove production and exports have been declining significantly and consistently since the 1980s. The declining of the clove exports most likely jeopardizes the Zanzibar efforts to improving human development with positive changes in living standards. This paper analyses factors for the declining trend in clove exports using time series data that were collected between 1980 and 2020 and analysed using the vector error correction model, complemented with qualitative data collected from 39 key informants. The time series results show that clove production, producer price, world price, Gross Domestic Product (GDP), and Exchange Rate had positive and statistically significant impact on clove exports in a long-run at 1% level of significance; while Foreign Direct Investment, human population and Cross Capital Formation showed significant negative impact. Only inflation showed insignificant negative impact. Based on qualitative results, there were two major determinants: (i) factors that affected clove production, and (ii) low and fluctuation of the clove price. The time series results coincided with qualitative information. We conclude that some factors affected clove exports indirectly through clove production. Other factors affected exports through fluctuation of clove price. Therefore, we recommend an integrated policy approach that aims at improving clove production and price stabilization in order to rectify the decreasing trend in clove exports.

Keywords

• Cloves
• Exports
• Vector Error Correction Model
• Zanzibar

Zanzibar'da Karanfil İhracatının Belirleyicileri: Politika Önerileri

Öz

Karanfil, 18. Yüzyıldan bu yana onlarca yıldır Zanzibar ekonomisini destekleyen yüksek değerli baharatlardan biridir. Ancak, karanfil üretimi ve ihracatı 1980'lerden bu yana önemli ölçüde ve sürekli olarak azalmaktadır. Karanfil ihracatındaki düşüş, Zanzibar'ın yaşam standartlarında olumlu değişikliklerle insani gelişmeyi iyileştirme çabalarını tehlikeye atmaktadır. Bu çalışma, 1980 ve 2020 yılları arasında vektör hata düzeltme modeli kullanılarak analiz edilen zaman serisi verilerini kullanarak karanfil ihracatındaki düşüş eğiliminin faktörlerini analiz etmekte ve 39 önemli bilgi kaynağından toplanan nitel verilerle tamamlanmaktadır. Zaman serisi sonuçları, karanfil üretimi, üretici fiyatı, dünya fiyatı, Gayri Safi Yurtiçi Hasıla (GSYİH) ve Döviz Kurunun karanfil ihracatı üzerinde uzun vadede %1 önem düzeyinde pozitif ve istatistiksel olarak anlamlı bir etkiye sahip olduğunu göstermektedir. Doğrudan yabancı yatırım, insan nüfusu ve brut sermaye oluşumu ise önemli ölçüde olumsuz etki göstermiştir. Sadece enflasyon önemsiz negatif etki göstermiştir. Analiz sonuçlarına göre i) karanfil üretimini etkileyen faktörler ve (ii) karanfil fiyatının düşük ve dalgalanması iki ana belirleyicisidir. Buna karşın diğer faktörler, karanfil fiyatındaki dalgalanma yoluyla ihracatı etkilediği tespit edilmiştir. Bu nedenle, karanfil ihracatındaki düşüş eğilimini düzeltmek için karanfil üretimini iyileştirmeyi ve fiyat istikrarını hedefleyen bütünleşik bir politika yaklaşımını öneriyoruz.

Anahtar Kelimeler

• Karanfil
• İhracat
• Vektör Hata Düzeltme Modeli
• Zanzibar

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