Global Development Finance Mobilizing Finance and Managing Vulnerability pdf

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Global Development Finance Mobilizing Finance and Managing Vulnerability pdf free download

Global Development Finance Mobilizing Finance and Managing Vulnerability pdf free download. THE GLOBAL ECONOMY IS AT A turning point. Growth has peaked, and pressures to address global imbalances are growing, exposing important risks facing both developed and developing countries as the needed adjustments occur.

Global Development Finance Mobilizing Finance and Managing Vulnerability pdf free download

Whether or not the rebalancing occurs in an orderly fashion will have a crucial impact on whether recent improvements in developingcountry performance can be sustained—and whether progress towards the Millennium Development Goals (MDGs) can be accelerated. The stakes are large. Global economic performance over the last year provides continuing evidence of the growing interdependence of developed and developing countries.

Global Development Finance Mobilizing Finance and Managing Vulnerability pdf free download

Global growth was high, in part from record expansion in developing countries, which have been benefiting from favorable global conditions and from years of domestic policy improvements. Financial flows to developing countries during 2004 reached levels not seen since the onset of the financial crises of the late 1990s. And developing countries’ increasing integration with the global financial system continues to raise their stake in the health and resilience of that system.

Global Development Finance Mobilizing Finance and Managing Vulnerability pdf free download

But the strong recovery has also given rise to sizable global financial imbalances that will have to be addressed. If the global growth cycle has indeed peaked, the likely scenario involves continued (though slower) growth and an orderly reduction in imbalances. But there are also risks—of higher-than-expected interest rates, of abrupt and disorderly exchange-rate movements, and of a pronounced global slowdown that could encourage protectionist sentiments and curtail expansion of trade and investment linkages between developed and developing countries.

Global Development Finance Mobilizing Finance and Managing Vulnerability pdf free download

The resilience of developing-country financial positions will be tested as global conditions tighten, with special concern for the vulnerability posed by increased debt burdens, which have been at the heart of the financial crises over the last decade. There is some good news here—aggregate external debt indicators are down, many developing. countries have improved their capacity to manage debt, and many countries have acted aggressively to address the weaknesses that contributed to previous crises.

Global Development Finance Mobilizing Finance and Managing Vulnerability pdf free download

But external debt burdens have risen in more than half of emerging market economies, and, in many, domestic borrowing has risen dramatically as well. Although the shift from external to domestic borrowing can reduce vulnerability to external shocks, it also carries risks from possible overborrowing or inadequate supervision. The central policy message is that excessive borrowing is risky, regardless of the source, and that efforts to avoid the discipline required by external borrowing by switching to domestic sources will fail.

Global Development Finance Mobilizing Finance and Managing Vulnerability pdf free download

Emerging market economies are also vulnerable to the possible impact of larger-than-expected increases in interest rates (which would translate into higher borrowing costs) and possible capital losses on dollar-denominated assets from dollar depreciation. The impact could be particularly acute for economies in which reserve accumulation far exceeds normal prudential levels, which entails fiscal costs as monetary authorities issue low-yield securities to absorb the excess liquidity created by reserve accumulation.

Global Development Finance Mobilizing Finance and Managing Vulnerability pdf free download

Global Development Finance Mobilizing Finance and Managing Vulnerability pdf free download


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