Part IIL uiz Pereira by S3a3DA

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									                 FINANCIAL FLOWS TO DEVELOPING
                   COUNTRIES: RECENT TRENDS AND
                                      PROSPECTS

        Namaacha, 22 - 24 March - MOZAMBIQUE

           Luiz A. Pereira da Silva – World Bank

March 23, 2010
    Introduction
2




    1.   The Global Crisis, Causes, Where Are We Today...
    2.   Financial and Real Impacts of the Crisis
    3.   Lessons from the Crisis
    4.   Post-Crisis Risks and Opportunities for Developing
         Countries
    5.   Conclusions and Implications for Mozambique
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



       Output                    Fast Recovery (1)

                                                        Past Trend Growth




                                                        Post-Crisis New
                                                        Growth Path (2)




                                                     Stagnation (3)

                “Green Shoots”
                                             Double Dip Recession (4)



                                                          Time
    2. The Crisis, Financial Implications
6


       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
    The Crisis, Financial Implications
7
    Differentiated Financial Impacts
8
    Private Capital Flows
                     Private Capital Flows to developing countries

                Milhares de Milhões $
                            Países de Rendimento Baixo

                            Fluxos de capital privado

                            Percentagem do PIB (eixo à direita)




Fonte: DataStream, World Bank, Global Economic Prospects 2010: Crisis, finance, and growth
Global Economic Crisis
     Real GDP growth rates in percent
10
                                           Developing
 8

 6
                                   World
 4

 2

 0

-2
                                                 High-income
-4
      2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: World Bank, Global Economic Prospects 2010: Crisis, finance, and growth
     The Crisis, Real Impacts
11
     3. Lessons from the Crisis
12


        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
     4. Risks and Opportunities
13


        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
     Riscos e Oportunidades
14
     Riscos e Oportunidades
15


        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
       6. Conclusion and Questions (Part II)
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    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)
              “the pessimism of intellect and the
                  optimism of the (will) practice”
                               (Antonio Gramsci)

                                    THANK YOU



23 de Março, 2010

								
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