Development Finance International
14 October - FDI Stagnates in 2010 (UNCTAD)
Global investment Trends Monitor #4 finds that global FDI has stagnated in 2010 after slow recovery in 2009, and does not appear to be filling the gap created by reduced stimulus packages. Transnational corporations in response to disappointing economic news and turmoil in sovereign debt markets, have reduced their intra-company loans, and reinvested earnings tumbled as firms repatriated a larger share of the earnings of their foreign affiliates. Developing and transition economies experienced smaller decreases. Cross-border M&As show a gradual rebounding, but greenfield investments declined, suggesting that prospects for a sustained FDI recovery are still uncertain. Risks include currency wars and trade protectionism.
14 October - MTDS Mission to Bangladesh
A joint World Bank, IMF, UNCTAD and DFI medium term debt strategy mission to Bangladesh was conducted from September 20th to the 30th. The mission focused on helping to build Bangladesh capacity to conduct a MTDS. The mission inter alia conducted a three day training program and concluded with a thoughtful presentation by the Treasury and Debt Management Wing (TDMW) on debt strategy and a presentation by the mission on policy issues.
13 October - Private Sector Holds Key to Tackling Global Poverty (DFID)
DFID has committed to intensify its work to stimulate the private sector to become a much bigger engine of growth in poorer countries. Measures include: a new Private Sector Department; boosting private investment (with business experts seconded in as advisers); encouraging reduced barriers to growth (a level playing field for all investors, fairer and more open trade, easier market entry, and streamlined regulation); CDC reform (regaining its power to invest directly, lend and provide guarantees where development need is greatest with less reliance on fund managers; and push for a successful conclusion to the Doha trade negotiations. CDC is set to play a key role: DFID will set up an external consultation about how its capital should be targeted, and publish the results early next year.
8 October - Low-Income Country Ministers Meet at BWI Annual Meetings
Ministers called for acceleration of remaining HIPC relief, automatic cancellation of debts for any country hit by major natural disasters, and presentation of proposals for a more comprehensive, transparent and impartial debt relief process to the next G20 meetings. They also stressed the need for urgent action to mobilise more innovative financing, especially financial sector taxes, and to improve low-income country representation in the G20. For the full communiqué, click here.
8 October - IMF Global Financial Stability Report
GFSR October 2010 is now available. Chapter 1 analyses challenges to advanced countries as they deal with slower recovery, higher debt levels and rollovers, and a still-impaired financial sector. Chapter 2 examines the increased vulnerability of banks to funding in the wake of the simultaneous and protracted inability to roll over or obtain new short-term funding across markets and borders. Chapter 3 examines the financial stability implications of credit rating agencies in light of the recent escalation of sovereign credit risk, and ratings downgrades of structured credit instruments.
