Post on 14-Dec-2015
March 23, 2010
FINANCIAL FLOWS TO DEVELOPING COUNTRIES: RECENT TRENDS AND
PROSPECTS
Namaacha, 22 - 24 March - MOZAMBIQUE
Luiz A. Pereira da Silva – World Bank
Introduction
1. The Global Crisis, Causes, Where Are We Today...
2. Financial and Real Impacts of the Crisis3. Lessons from the Crisis4. Post-Crisis Risks and Opportunities for
Developing Countries5. Conclusions and Implications for
Mozambique
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1. The Global Crisis, Causes
“Great moderation”, productivity gains Entry of China and ex-USSR into the market Global financial innovations with inadequate
risk pricing and very complex assets in the balance of institutions TBTF
Pro-ciclicality of the financial system without adequate regulation in a globalized world
Global disequilibria USA-China and within the EU
The Global Crisis, where are we today...5
Fast Recovery (1)
Past Trend Growth
Post-Crisis NewGrowth Path (2)
Stagnation (3)
Double Dip Recession (4)“Green Shoots”
Output
Time
2. The Crisis, Financial Implications In the short term, a run to “safe harbors”,
paradox, the USA Dollar, wwith implicaitons in liquidity (interbank market), exchanges rate and risk premia (CDS, etc.) “Credit Crunch”
In the medium to long term: Cost of capital will increase Better risk pricing and differentiation More financial regulation Reduction in the official flows and transfers
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Private Capital Flows
Private Capital Flows to developing countries
Fonte: DataStream, World Bank, Global Economic Prospects 2010: Crisis, finance, and growth
Milhares de Milhões $
Países de Rendimento Baixo
Fluxos de capital privado
Percentagem do PIB (eixo à direita)
Global Economic CrisisReal GDP growth rates in percent
Source: World Bank, Global Economic Prospects 2010: Crisis, finance, and growth
World
Developing
High-income
3. Lessons from the Crisis
Macro-Financial stability has to combine low inflation and prevention of bubbles (Financial Regulation)
Countries with solid foundations (Internal and External) can better weather financial turbulence, even of a global nature
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4. Risks and Opportunities
Evaluate the “Pull” & “Push” factors in future capital flows to developing countries (Demand, Risk adjusted returns, Institutions)
Global growth in the next few years will be driven by the South (Emerging, other developing countries)
Demand for higher returns with adequate risk can favour FDI, stock markets, emissions from developing countries
Fiscal adjustment in the North will reduce aid flows and transfers
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Riscos e Oportunidades
Quando e Como Acelerar no Processo de Reducao a Dependencia da Ajuda Internacional?
Condicoes: Mercados Internacionais Mais Estaveis Manutencao da Estabilidade Macro-Financeira Local Fortalecimento da Percepcao de Estabilidade na
Governanca Economica e Politica Local Visao Estrategica, Projeto de Crescimento
Sustentavel, i.e. integracao economica, espacial, externalidades multi-setoriais
Aproveitar Novos Temas e Tecnologias
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6. Conclusion and Questions (Part II)
Will Mozambique be ready for the international Bond Market? (Andrea Dore e Christian Mulder – FMI)
How to use guarantees to facilitate private sector fianncing? (Farida Mazhar – BM, Alastair Campbell e Jonathan Wood – Standard Bank)
Will Mozambican firms be able to issue corporate bonds in national and international markets? (Evans Osano – IFC)
What are the appropriate financial models for Public-Private Partnerships? (Jose Luis Guash – BM e Justin Tyson, Karen Breytenbach – FMI)
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