15 June 2004 08:13
Private capital flow to developing countries increases, WB report
ISLAMABAD, June 15 :The World Bank (WB) annual report on Global Development Finance (GDF) reported that the net
private capital flows to developing countries as a whole rebounded to 200 billion dollars in 2003, up from 155 billion
dollars in 2002, but unfortunately, only a few relatively better-off countries are sharing most of the gains. The report
having title "Harnessing Cyclical Gains for Development" was launched at the World Bank, Islamabad office
while Dr. Ishrat Hussain, Governor State Bank of Pakistan chaired the event here on Tuesday. The report more stated that
the "Official Development Assistance" (ODA), on which the poorest countries depend for external capital, has
increased only marginally to 58 billion dollars in 2002, a 6 billion dollar hike from 2001. John Wall, World Bank's
Country Director for Pakistan stated that the increase in private capital inflows and low interest rates offer
significant opportunities for developing countries to invest in infrastructure and facilitate trade finance to foster a
self-reinforcing cycle of sustained capital flows, economic growth and poverty reduction. More ever he remarked that the
Official aid flows are of critical importance to the poorest countries, but they remain well below the levels required
to achieve the Millennium development Goals (MDG). Ishrat Hussain in his presidential address admires that in South Asia
economics have generally done well, but they are not at a stage where they can still make full use of the private
capital flows. "There capacity to repay the loans needs to be kept in view but private capital flows should be
selectively available for infrastructure needs and the multilateral agencies should reconsider their strategy regarding
the public sector's role in infrastructure development" Dr. Ishrat Hussain pointed out. The report high lights
the increase in net private flows, bonds and bank loans, most of which went to Brazil, China, Indonesia, Mexico and
Russia, is the major factor in an overall increase in net capital flows to developing countries from all sources, public
and private, to 228 billion doollar in 2003 from 190 billion dollar in 2002. These increase, which reached every region,
to some extent, except the Middle East and North Africa, are due partly to low interest rates in the industrial
countries, and reflect a strengthening global economic recovery. They have also been prompted by sounder fiscal policies
in many developing countries, as well as structural reforms. Monsoor Dailami, World Bank Economist and the lead author
of 2004 Global Development Finance (GDF) high lighted the key challenge that remains is to increase these flows more
broadly in a way that is sustainable, which requires channeling them to countries with good policies and into
investments that spur long-term growth and poverty reduction. Dr.A.R Kemal, Director Pakistan Institute of Development
Economics (PIDE) also addressed the discussion, which was largely attended by policy makers, Government of Pakistan
officials, academia, civil society representatives and the media teams.
(THROUGH ASIA PULSE)
[Pakistan Press International Information Services Limited] |
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