21985 Vol. 3 No.3 ~~~~FILE COPY CONTENTS AND SUMMARY INTERNATIONAL LENDING AND EQUITY PORTFOLIO AND CAPITAL MARKETS FOREIGN DIRECT INVESTMENT U DEVELOPING-COUNTRY * EMERGING STOCK MARKETS PAGE 10 BORROWING PAGE 4 The IFC's investable composite index rose Developing-country borrowing reached a 7.1% in the first quarter of 1996. Most of the new record of $94.7 billion in 1995, owing gains were in the first two months, as the mid- to strong expansion in bank credit. Bond fi- quarter rise in US interest rates adversely af- nancing rose only marginally last year. De- fected some markets. All the regions covered veloping-country bond issues strengthened registered gains, including 9.5% in Asia, in the first quarter of 1996, and maturities 6.4% in Europe, the Middle East, and Africa, lengthened. and 4.7% in Latin America. I GLOBAL BORROWING PAGE 6 U NEW EQUITIES AND Data on global borrowing from the OECD DERIVATIVES PAGE 12 were not yet available when this issue went to International equity issues by emerging mar- press. kets fell to $2.8 billion in the first quarter, down from $4.8 billion the previous quarter. v COMMERCIAL BANK CLAIMS PAGE 6 Privatization issues made up $1 billion of the Cross-border lending activity slowed in the total. New investment funds were launched third quarter of 1995. The rise in Bank for In- in the Middle East, Central and Eastern Eu- ternational Settlements (BIS) banks' cross- rope, Central Asia, West Africa, and Cuba. border claims fell compared with the previous Closed-end equity funds targeting emerging quarter, owing to concerns over the credit- markets ended the quarter up 6.04%. worthiness of some Japanese banks. BIS banks' claims on developing countries rose * FOREIGN DIRECT INVESTMENT $23 billion, while deposits by developing- AND PRIVATIZATION PAGE 14 country residents in industrial country banks Foreign direct investment (FDI) in devel- increased. The volume of project finance oping countries reached a new high of $90 plummeted to $2.7 billion in the first quarter billion in 1995, up 13% from 1994. East of 1996, well below 1995's quarterlyaverage of Asia remained the largest recipient, and l2 $7 billion. countries accounted for three-quarters of the total. Privatization proceeds from in- * MARKET CREDITWORTHINESS PAGE 8 ternational public offerings declined in A semiannual survey of sovereign creditwor- 1995, largely owing to the impact of the thiness showed improvements in Eastern Mexican peso crisis. Europe and Latin America and a slight decline in the Asia-Pacific region. During the first quarter of 1996 Cyprus received a first- SECONDARY MARKETS time rating from Moody's, and Trinidad and FOR DEVELOPING - Tobago received its first rating from Stan- COUNTRY DEBT PAGE 16 dard & Poors (S&P). S&P also upgraded the rating on the long-term foreign currency The prices of secondary market instruments debt of Poland and Slovakia and down- were subject to wide swings during the quar- graded the rating on Venezuela's Eurobonds ter, largely in response to developments in and short-term foreign currency debt. US interest rates. 2 FINANCIAL FLOWS AND THE DEVELOPING COUNTRIES CONTENTS AND SUMMARY OFFICIAL FLOWS: FINANCIAL BRIEF: WHAT MULTILATERAL AND BILATERAL DETERMINES FOREIGN INVESTMENT? PAGE 20 * MULTILATERAL FLOWS PAGE 17 World Bank commitments for the first quar- A recent article explores how political, ter of 1996 increased to $4.4 billion, includ- social, and economic conditions affect ing $440 million for China's power sector foreign direct investment in developing and $200 million to a private finance com- countries. pany in India. The IDB pledged $1 billion to support the private sector in Latin America, The next issue of Financial Flows and the and the IMF agreed with Russia on a $10 bil- Developing Countries will be published in lion Extended Fund Facility. September to coincide with the Annual Meetings. 11 BILATERAL ODA AND EXPORT CREDITS PAGE 18 Japan's EXIM bank provided loans to the STATISTICAL APPENDIX FOR Banco Centroamericano de Integracion Eco- STRUCTION AND DEVElOPMENT nomica to support infrastructutre, to Greece to * BANK AND TRADE-RELATED RECON assist in export development, and to Brazil to NONBANK CLAIMS PAGE 23JUN I . 1996 promotc investment in Japanese-run busi- nesses. The US Ex-Im Bank made its first lim- * COMMERCIAL BANK CLAIMS SECTORAL LIBRARY ited-recourse projectfinance loan to Trinidad ON DEVELOPING COUNTRIES PAfIt;NATIONAL BANK and Tobago and issued a guarantee for agri- cultural exports equipment to Ukraine. X COMMERCIAL BANK CLAIMS ON DEVELOPING COUNTRIES, BY COUNTRY OF ORIGIN PAGE 25 DEBT RELIEF UPDATE * MATURITIES OF BANK CLAIMS 1 OFFICIAL CREDITORS PAGE 19 ON DEVELOPING COUNTRIES PAGE 29 The Paris Club reached agreements during U FUNDS RAISED ON INTER- the first quarter with Honduras, Sierra Leone, and Zambia.~~~~ NATIONAL CAPITAL MARKETS PAGE 30 and Zambia. U COMMERCIAL CREDITORS PAGE 1 9 E SECONDARY MARKET DEBT (BID) PRICES PAGE 31 No agreements were reached with commer- cial bank creditors during the first quarter. 5 EMERGING STOCK MARKETS PAGE 32 COMMERCIAL BANK * FOREIGN DIRECT INVESTMENT COMMERCIAL BANK ~~~FLOWS PAGE 33 PROVISIONING AND CAPITAL ADEQUACY PAGE 19 * TOTAL EXTERNAL DEBT PAGE 34 Capital ratios declined in the first quarter of IN AGGREGATE NET LONG-TERM 1996 for major US banks and improved RESOURCE FLOWS PAGE 35 through December 1995 (the last month with available data) for major British banks. m COUNTRY GROUPS PAGE 36 MAY 1996 3 F E * NJ Al/ ii , L I F J i , ''4,'`W. AL C A tP; TA.L M A Ek: DEVELOPING-COUNTRY TABLE2 BORROWING BOND ISSUES BY TYPE OF BORROWER i DEVELOPING COUNTRIES' BORROWING US$millions 1995 1996 REACHES NEW RECORD IN 1995 1994 1995 Q4 Ql According to the OECD, developing coun- All developing countries 50,129 57,843 1 3,555 1 9,835 tries raised $23 .6 billion in internationl .Pnrvte 21,010 20,489 6,200 6,050 tries raised $23.6 bllion in international Sub-Saharan Africa 75 100 100 250 bond and loan markets in the fourth quar- East Asia and Pacific 8,604 11,531 2,663 2,709 ter of 1995, pushing total borrowing for the Europe and Central Asia 1,598 542 34 0 year to a new high of about $92.5 billion- Latin America 10,097 7,746 3,084 3,091 well above 1994's $76.1 billion. The in- M ddle East and North Africa 0 50 50 0 crease was due mainly to the expansion of Sovereign 17,156 24,253 8,403 9,885 Sub-Saharan Africa 1,520 496 0 151 bank credit as banks priced loans aggres- EastAsia and Pacific 2,399 569 395 683 sively, while bond markets were hurt by the South Asia 150 0 0 0 Europe and Central Asia 9,115 10,204 2,927 2,798 Mexican crisis. Bank credit increased 58% Latin America 3,572 12,105 5,082 6,253 to $42.4 billion, accounting for 46% of total Middle East and North Africa 400 879 0 0 borrowing, up from 35% in 1994. Bond fi- Other public 11,963 13,101 3,951 3,900 Sub-Saharan Africa 0 396 396 0 nancing increased only about 2%. East Asia East Asia and Pac fc 6,599 8,161 2,303 2,263 led with $39.3 billion in borrowing, with the Sou-h Asia 300 262 0 200 Europe and Centra Assa 1,062 1,501 572 0 Republic of Korea's $14.3 billion account- Latin America 4,003 2,731 680 1,437 ing for much of it. Latin American coun- Middle East and North Africa 0 50 0 0 tries raised $22.4 billion, $16.9 billion of it Source: Euromoney Bondware and World Bank. in bonds. Central and Eastern Europe raised $18.6 billion, mainly in loans. in the US and in other major industrial coun- tries. However, the stronger than expected Ui DEVELOPING-COUNTRY BOND ISSUES US employment report for February and re- EDGE UP IN THE FIRST QUARTER lated official comments raised doubts about Bond markets started the year on a positive the likelihood of interest rate cuts. These re- note on expectations of lower interest rates ports fueled volatility in bond yields in the - dollar sector and affected other European TABLE X INTERNATIONAL BORROWING BY SELECTED DEVELOPING markets; they also led to higher spreads for COUNTRIES developing-country borrowers. Nevertheless, US$ miliiesis 1994 1995 1995Q3 1995Q4 developing-country bond volume strength- Totrl Bonds Totol Bonds Total Bonds Totol Bonds ened in the first quarter to $19.8 billion Argentina 5,716 4,588 6,596 4,928 2,070 1,870 2650 2,587 (table 2), up from to $18.6 billion in the Brazil 4,011 3,960 6, 16 5,765 1,186 936 1,659 1,659 fourth quarter of 1995. Sovereign borrowing Chile 80 0 903 194 281 17 0 0 China 8,157 3,803 6,21 7 1,964 2,132 1,067 1 950 549 continued its upward trend and reached $9.9 Czech Republc3 638 400 740 0 75 0 315 0 billion, an 18% increase over the preceding Hungary 2,541 1,721 4,073 1,395 1,036 306 997 0 India 1,461 863 2,818 680 916 650 956 30 quarter; other public borrowers issued about Indonesia 6,224 2,194 7,592 1,109 1,763 605 2 130 414 the same amount of debt as in the previous Korea 7,908 3,424 14,721 8,697 4,132 2,399 4525 2,260 Malaysia 4,126 1,615 3,264 2,215 2,147 1,632 866 432 quarter ($3.9 billion), while private borrow- Mexico 8,526 6,516 6,399 5,641 3,047 2,929 2,139 1.569 ing fell 2%, to $6 billion. Pakistan 195 195 692 0 IS 0 82 0 Led by Argentina ($2.7 billion) and Mex- Po,andl 3 0 299 250 0 0 0 0 Thailand 8,060 3,328 7,236 1,909 2,081 846 2 065 668 ico ($2.4 billion), sovereign issues from Latin Venezuea 400 0 3,546 2,505 0 0 346 346 America increased 23% (to $6.3 billion). Ar- Zimbabwe 0 0 0 0 0 0 0 0 gentina issued bonds in yen, deutsche mark, Note: Bonds inc ude bothirnternatonal issues (euromarkets) and traditiona foreign issues. Italian lira, and schilling markets, but the a. Data before Apri 1993 refer to Czechos ovak a. Source: OECD, Financiol Stctstics (monthly), March 1996. largest issue-which raised $1 billion-was in 4 FtNANCtAL. FL_WS AND TJHE DEVELOPING COUNTR!ES -- S r - ,'- - ; .' , A,r vf ITA L .EA A R K E T S global dollar-denominated bonds. The issue accounted for 80% of total bonds, up from was oversubscribed, with a spread of 410-415 74% in the fourth quarter (figure 2). As the basis points, somewhat lower than Mexico's prospects for returns in emerging stock issues. US investors bought 75%. Mexico markets improved, developing-country tapped the dollar and deutsche mark mar- borrowers issued more convertible bonds. kets for $1 billion each and raised $378 mil- Convertible bonds' market share increased lion in the yen market. Other public bonds to 12%, from 2% the preceding quarter. from Latin America more than doubled at Issues in the dollar sector maintained the $1.4 billion. Brazil issued $284 million in the largest share of total issues, about 52%. Bor- Samurai market and achieved the longest rowing in other currencies also increased. An- maturity (5 years) since the country entered alysts cited issuers' desire to expand their the market last year after a 15-year absence. borrowing base coupled with strong demand Colombia also tapped the international for high-yield securities in other sectors bond market and raised $685 million at longer maturity and lower spreads than those - of Mexico and Argentina. FIGURE I BOND ISSUES FROM DEVELOPING China entered the Yankee market and COUNTRIES, BY MATURITY raised $400 million in a two tranche deal- US$ billions $300 million with 7 years to maturity and 57.8 $100 million with 100 years to maturity (see - Over IS years below). Thailand raised $184 million in yen- El il-lS years denominated bonds. Turkey raised $442 mil- El 6-10 years lion in yen and deutsche mark markets. E 1-5 years 31 INVESTORS FAVOR LONGER MATURITIES, 18.6 19.8 FIXED-RATE ISSUES IN FIRST QUARTER Developing-country borrowers were able to issue bonds with longer maturities in the first quarter, compared with the last quarter of 1995 1995Q4 1996QI 1995. About 50% of the volume of bonds had Note Three OO-yearbondswere ssued inthefirstquarterof 1996 byChina, Korea, and Maaysia. maturities of 6-10 years, compared with 31 % Source: Eurononey Bordware and Worn Bank. in the preceding quarter (figure 1). Three issues from Asian countries tapped the mar- .' -*.--r- X> .-na 7< it ket with 100-year bonds. The first such issue FIGURE 2 was from TBOND ISSUES FROM DEVELOPING was from Tenaga, a Malaysian utlity firm, COUNTRIES, BY TYPE which raised $150 million in dollar-denomi- US$ billions nated bonds with a coupon rate of 7.5% and 57.8 a spread of 142 basis points. This was fol- lowed by China, which raised $100 million l Floating with a coupon rate of 9.12% and a spread of lLI Convertible 299 basis points, and by the Korean Electric EN Fixed rate Power Corp., which raised $29 million with a coupon rate of 7.95% and a spread of 250 18.6 19.8 basis points. Investors also favored fixed-rate bonds because of expectations of slow economic growth and stable or lower interest rates in 1995 1995Q4 1996Q1 industrial economies: fixed-rate issues Sourc Euromoney Bondwvare and World Bank 5 INTE:RNATIONAL LENDING AND CAPITAL MARKETS (figure 3). Yen issues amounted to 19% of the FIGURE 3 total, while deutsche mark issues increased to FIGURE 4 CURRENCY SECTORAL BREAKDOWN OF COMPOSITION OF 20%. German and Japanese retail investors DEVELOPING-COUNTRY BOND ISSUES, BOND ISSUES, were very active in buying emerging market 1 996Q I Energv/telecom/ 1 996Q 1 paper. Issues denominated in Italian lira ac- utilities East and South Asia counted for 4% of the total. As in the previ- f%inne ingoil 3% ($5.9 billion) ous quarter bond issuance by governments _Mnufocturing 9% Yen SFR accounted for the bulk of issues-50%-with Othelr 28% \4% the majority of the issues from Latin Ameri- 4% US dollars } can countries, namely Argentina and Mexico us ~~~~~~~~~~~~~~~~~~~~~~~~~~~~Government 68% (figure 4). The financial sector accounted for Gr% 28%, with issues from Brazilian banks ($1.3 Nate:.Other' incddesutiines agrca.ture,construrton transport andother Latin America ($10.8 billion) secices. billion) beirig most prevalent. Source: Ero-one Bordware and World Bank. Yen 10% %S dor by $45 billion, down from the $75 billion in- 752^ DM GLOBAL BORROWING crease the previous quarter. There was an ab- 28% solute reduction in bank claims on bank and Data on global borrowing from the OECD nonbank firms located in Japan and in off- Other tire were not yet available when this issue went to shore centers. The stagnation of transactions 2% C press. by industrial country banks contrasted with Europe and Central Asia ($2.8 billion) the buoyant lending to Asian countries DM (other than Japan), which accounted for 37%OX COMMERCIAL BANK CLAIMS 47% of the $45 billion increase. Xt;; -- 000 \USdollars U RISEThe currency structure of international W | 25% * RISEIN BIS BANKS' CROSS-BORDER bank lending provides some insight into de- CLAIMS SLOWS IN 1995'S THIRD QUARTER velopments during the quarter. There was an Yen 38° increase in yen-denominated claims, owing to Ban.e: Euromcney Bondware ass Worl Cross-border and local foreign currency the cumulative impact of the export of funds claims of reporting banks of the Bank for In- from Japan to Japanese banks' foreign offices ternational Settlements (BIS) rose $90.2 bil- and the redistribution of liquidity within the lion in the third quarter, about half the increase of the previous quarter. Most of this TABLE 3 deceleration resulted from the reduction in INTERNATIONAL CAPITAL MARKET F LOWS Japanese banks' liabilities to other reporting US$ billions centers, in response to concerns about the Instrument 1993 1994 1995 1995Q3 1995Q4 creditworthiness of some of these banks. Bonds 481.0 426.9 460.6 128.2 117.0 However, this was partly offset by new loans Equity 40.7 44.9 41.0 9.6 18.6 Syndicated loans 1 36.7 202.7 368.5 82.8 101.6 in yen and in foreign currencies from NIFa and other Japanese banking offices to their foreign af- back-up faci ities 8.2 4.9 3.1 2.2 0.1 ECP' and other filiates. Expansion of cross-border assets dur- nonunderwrtten ing the third quarter was highest in Japan facilities 152.0 274.0 385.2 126.6 98.0 ($37.6 billion), the United Kingdom ($29.3 Total 818.6 953.4 1,258.4 349.4 335.3 billion), and Germany ($22.6 billion). By Flows to contrast, foreign banking positions booked developing countries' (percent) 9.2 9.4 9.0 in Belgium, France, and the US contracted in Note: Data on global borrowing from the OECD for the first quar- absolute terms. ter of 1996 were not yet avai able when this ssue went to press. a. Note issuance facilities. Net international bank credit (or new b. Eurocommercal paper. c. Including Eastern European countries. lending), adjusted for redeposits, increased Source: OECC, Finoncial Market Trends. 6 FINANCIAL. FLOWS AND THE DEVELOPING COUNTRIES INTERNATIONAL LENDING AND CAPITAL MARKETS Euro-yen market. The earlier expansion of dol- largest bank debtor in the developing world. lar credit slowed as Japanese banks, and to According to the latest half-yearly BIS report some extent US banks, reduced their foreign on the distribution of international bank lend- borrowing. Also, credit growth was strong in ing, short-term credits represent 71% of the French francs, Italian lire, and Spanish pesos total banking claims reported against Thai- because of external lending by the national land. Korea's liabilities increased by $4.5 bil- banking systems of the currencies concerned, lion to reporting banks and by $2.4 billion to possibly on account of nonresidents' hedging Indonesia. Credits to China also increased by of long positions on these currencies. Cross- $2 billion. Claims on Latin American countries border activity in deutsche markswas subdued, increased by $2.6 billion, with a rise of $3.7 bil- partly because of some shift back of business lion to Brazil, stagnation in Argentina and a de- from the Euro to the domestic market. cline of $2 billion to Mexico. Banks' lending to New syndicated credit facilities rose $72.3 countries in Eastern Europe and the former billion in the third quarter, slightly below the Soviet Union increased by $1.4 billion. Lend- previous quarter's increase of $76.4 billion. ing to Poland increased by $855 million and to Difficulties experienced by Japanese banks the Czech Republic by $831 million. were reported to have had a contractionary Deposits by developing-country residents in impact on new syndicated loans, though the industrial country banks rose $18.3 billion. De- effect on an otherwise liquid market was only posits by Latin American residents were up a marginal. After four years of lethargic growth record $15.3 billion, with Brazil accounting for the syndicated loans sector experienced slim $11 billion as authorities deposited funds in margins and weaker contractual lending safe- commercial banks following the easing of legal guards in 1995. There is some evidence that uncertainties surrounding the country's exter- spreads have now reached a trough, and fur- nal debt earlier in the year. Deposits from Mex- ther weakening of covenants has become a ico increased by $1.9 billion and from preferred means of winning loan mandates. Venezuela by $1.5 billion. Deposits from Asian The total includes a high portion of refinanc- countries rose $6.9 billion, with Korea ac- ing, backup facilities, arrangements for merg- counting for $4.4 billion and Thailand for $2.2 ers and acquisitions, and project finance. billion. Deposits by residents of OPEC coun- tries fell $6.4 billion, mainly the result of a drop * INCREASE IN BIB BANKS' EXPOSURE of $6.9 billion in deposits by Saudi Arabian res- IN DEVELOPING COUNTRIES SLOWS IN idents. Deposits from Africa decreased $1.1 bil- THIRD QUARTER lion and from the former Soviet Union and BIS banks' outstanding claims (adjusted for ex- Eastern Europe by $3.6 bil]ion. change rate changes) on developing countries (including Eastern Europe and the former So- * BORROWING FOR PROJECT FINANCE viet Union) increased $23 billion in the third PLUMMETS IN FIRST QUARTER OF 1996 quarter, somewhat less than the previous quar- At $2.7 billion the volume of project financ- ter's rise of $27.8 billion. Lending to Asian ing commitment activity was depressed in the countries accounted for about 92% of the first quarter, compared with a quarterly aver- total. Despite new restrictions imposed by au- age of about $7 billion in 1995, although the thorities on foreign currency lending to the importance of the drop is unclear given the domestic market, Thailand again emerged as volatility of the quarterly figures. SONAN- the majorrecipientoffunds. Itborrowed$13.4 GOL-Angola's oil and gas undertaking and billion, which represented 64% of the total a regular in the market-kept Sub-Saharan channeled to the region during the quarter. As Africa on the plaving field with its $80 million of the end of September Thailand had over- guaranteed loan. China, Indonesia, Korea, taken the Republic of Korea and Mexico as the Malaysia, Thailand, and Vietnam were active MAY 1 996 7 :, ARs ARKETS from East Asia, which accounted for three- TABLE 4 fourths of total commitments. India's Indus- PROJECT FINANCE trial Development Bank and a private US$ millions electricity utility company from Pakistan were / 995 1996Q1 the major borrowers from South Asia. A 10- Region 27,403 2,696 year CK 4.1 billion ($156 million) arrange- EastAsia and Pacific 15,105 1,834 ment for Ceske Drahy, the Czech Republic's Europe and Central Asia 4,781 157 ment for Ceske Drahy, the Czech Republic's Latin America and Caribbean 2,750 132 transportation authority, was the only syndi- Middle East and North Africa 2,083 0 South Asia 1,616 493 cation for the European region. Latin Amer- Sub-Saharan Africa 1,068 80 ica had two syndications of average size for Sector 27,403 2,696 Chilean borrowers, one ajoint venture with a Power 8,923 259 Canadian firm. A little more than half of total Telecommunications 2, 97 57 commitments during the quarter were in US Other infrastructure 1,250 144 Noninfrastructure 13,923 2,1 36 dollars. Use of domestic currencies and yen by the Czech Republic, Indonesia, Malaysia, Source: Euromoney Loanware and World Bank. and Thailand accounted for the rest. 1995), Institutional Investor noted that the One-fifth of total project financing went for greatest regional improvement occurred in infrastructure, half of it in the power sector Eastern Europe, where nine countries im- (table 4). Chile's Chilgener SA deal to finance proved their ratings and only two fell. Slove- a hydroelectric plant was oversubscribed, nia was the regional leader, up 3.5 points to enabling the firm to command a better price 45.9, the second largest improvement in the than originally offered to investors. Other six-month period. Slovakia and Poland also infrastructure deals included a $51 million, 10- improved their overall ratings, rising 2.9 and year water and sewage sector deal from China 2.6 points respectively. Ratings fell for Be- with an interest rate swap attachment and a larus and Hungary, where investors were handful of deals in the construction and heavy slightly disillusioned with reform efforts (but engineering sector. Vietnam had two deals note the pick-up in the Hungarian stock mar- worth about $30 million, both guaranteed, ket in the first quarter of 1996 cited in the one for Daewoo Corp. of Korea and one from next section). Improvement in Latin Amer- Thailand. A private financial services company ica was second only to that in Eastern Eu- of Thailand, Bangkok Finance, entered into a rope, with most of the gains in smaller currency swap to borrow in yen and swap into countries, including Barbados, Trinidad and baht. The share of oil and gas in the nonin- Tobago, Costa Rica, and Bolivia. Chile was frastructure syndications was quite small this the only large country to move up much (1.8 quarter, with the onlydeal being fromAngola. points). As might be expected, Venezuela's Manufacturing accounted for a major portion continuing fiscal problems and the lack of of the noninfrastructure sector, although deals agreement on an IMF-supported program also were executed in the extractive, building, (during the period reviewed) resulted in a and services sectors. 1.3 point drop. In Africa, Mauritius contin- ues to be the investors' favorite-its 3.8 point increase was the largest for any country in MARKET CREDITWORTHINESS this survey. Finally, the Asia-Pacific region registered a slight decline of 0.3 points. In- ' SURVEY SHOWS CREDITWORTHINESS vestors expressed concern that some IMPROVEMENT IN LATIN AMERICA AND economies may be overheating (Indonesia, EASTERN EUROPE Philippines, and Thailand among them), es- In its semiannual survey of sovereign credit- pecially since inflation is already high by worthiness (which covers the second half of Western standards. 8 FINANCIAL FLOWS AND THE DEVELOPING COUNTRIES INTERPN,,TTONAL LE-NOING- AND CAPIT AL MARKETS U Two COUNTRIES RECEIVE FIRST-TIME restraint continue and economic growth is TABLE 5 RATINGS, POLAND AND SLOVAKIA strong. SOVEREIGN FOREIGN UPGRADED, VENEZUELA DOWNGRADED In the beginning ofApril S&P raised its rat- CUgRRENCY DEBT Long-term roting, on of Apni 12. Two countries were assigned sovereign ratings ing on Poland's long-term foreign currency- 1996 this quarter (table 5): Cyprus received a first- denominated debt from BB to BBB-, an Moody's S&P time rating from Moody's, and Trinidad and investment-grade level. Polish Brady bonds Investment grade Tobago received a first-time rating from Stan- received the same rating, with the outlook Chile Baal A-/AM dard & Poors (S&P). However, both countries now considered stable. S&P cited the econ- Coombia Baa3 BBB / had previously received ratings from other omy's continuing dynamism and dramatically A+' agencies. Also, two Eastern European coun- improved external flexibility as the main rea- Cyprus A2 aA- Czech Repuol.c Baa I A tries were upgraded-Poland and Slovakia- sons behind the upgrade. Last year real GDP Greece Baa3 BBB-' while Venezuela was the only country whose growth was 7%, and it is expected to reach al- ondia Baa3 BB+'L Indonesia Saa3 BSB' rating was downgraded. most 6% this year. International reserves rose Korea, Rep. of Al MA-1 At the end of February Moody's assigned $9 billion, providing further external flexibil- Malaysia Al A+/ AAr*` Cyprus a sovereign ceiling of A2 for ratings ity. Debt service is very light, and the debt Mata A2 A of foreign-currency bonds and notes and for burden is expected to continue its downward Poland Baa3 BBB- Slovakia Baa3 BSB+ long-term bank deposits. The rating reflects trend. Finally, the political situation is much South Africa Baa3 BB52 the moderate and declining external-debt calmer. Nonetheless, ratings remain con- Thailand A2 A burden, a good level of foreign exchange re- strained by the need to further reduce infla- Tunisia Baa3 n.a. serves,and healthy economic growth. In ad- tion, reform the pension system, and privatize Below investment grode serves, an elh cnmcgot.I d in eomtepninsse,adpiaie Argentina B I SB-I dition, Moody's viewed the well-educated state industries and the banking sector. BBB-* population and high per capita income as S&P also upgraded the long-term foreign Brazdos BI Bn.a2 positive factors for further development of currency debt of Slovakia in April. The rating Hungary BaI BB-+3 the country as an offshore financial center- of the National Bank of Slovakia was raised Jordan Ba BB 2± BBB-2 a role that Cyprus intends to play. However, from BB+ to BBB-, with the outlook consid- Mexico Ba2/ BB/ on the negative side the economy remains ered stable. S&P cited Slovakia's progress in Pakstan B BB+ heavily dependent on foreign exchange prudent economic management despite Paraguay n.a. BB-/ earnings from tourism, and the geopolitical some disruptive political developments as an BBB-' Philippines Ba2 BB/ situation has jeopardized foreign direct important factor in the upgrade. Macroeco- BBB+,2 investment. nomic indicators improved markedly in Trnidad and Tobago Bal BB+' S&P assigned a first-time BB+ rating to the 1995. Most impressive was the real GDP Turkey Ba3 B+2 long-term foreign currency debt of Trinidad growth of 7.4%-the fastest in Eastern Eu- Uruguay Bal BB+ Venezuela Sa2 B3 and Tobago in mid-March and a BBB+ rating rope-and year-end inflation of 7.2%-the * The first rasing appiies to foreign to the country's local currency debt. S&P best performance among the transition currency debt and the second to domeotc currency debt, noted the improvement in economic policies economies. As well, Slovakia ran a current ac- n.a. Not applicable. ,StabJe ostlook. achieved since 1994. Fiscal accounts are bal- count surplus of 4% of GDP with reserves ris- 2. Positive outlook. anced, net external debt is declining, and in- ing $1.6 billion, making Slovakia a net 3 Negatve outlook, flation continues to be low. However, the international creditor. Despite the progress, country's dependence on petroleum for for- creditworthiness remains constrained by the eign exchange continues to affect its foreign unsettled political environment (which has currency debt rating (petroleum accounts discouraged some foreign investment) and for 45% of exports). Further development of weak banking system. the nonoil sector is crucial for reducing the Venezuela was downgraded in February. 17% unemployment rate and for generating S&P lowered the rating on its Eurobonds higher real incomes. The outlook for both from B+ to B and its short-term foreign cur- foreign and local debt is positive and reflects rency rating from B to C. About $1.8 billion the possibility of an upgrade in two to three in bonds were affected, and the outlook is years provided that fiscal and monetary negative. The downgrade reflects the severe M. AY GVG 5 9 INTERNATIONAL LENDING AND CAPITAL MARKETS structural imbalances in public finances and continued to service its Eurobonds and the arrears on its unrated debt. Repeated de- Brady bonds on time, it was accumulating ar- lays in negotiations with the IMF over a rears on its internal and external debt. Most macroeconomic stabilization plan and fi- of the arrears on external debt (estimated at nancing package had raised questions about almost $9 billion) are owed to Paris Club the government's commitment to reform creditors. Successful implementation of the (agreement on a 12-month standby was IMF program is viewed as a key to stabilizing reached in April 1996). While Venezuela Venezuela's situation. EQUITY PORTFOLIO AND FOREIGN DIRECT INVESTMENT EMERGING STOCK MARKETS Poland's stock market indices rose more than 40%, and the Czech Republic's 14% (figure 5). Howevcr, the EMEA index was GOOD START pulled down by South Africa, the region's Emerging stock markets posted gains in the heavyweight, where the stock market fell first quarter, although some were hurt by 1.5%. The IFCI Latin America index rose the rise in US interest rates and continued 4.7% on the strength of double-digit in- advances on the New York Stock Exchange, creases for Brazil, Mexico, and Venezuela. albeit at a slower pace than last year. The Market analysts are optimistic about IFC's investable composite index (IFCI) prospects for Latin American emerging rose 7.1% during the quarter, with most of markets. Though economic growth in the the gains registered during the first two region is expected to be moderate in 1996, months. The IFCI Asia index rose 9.5%, as structural reforms undertaken in 1995 Indonesia, Sri Lanka, and Thailand posted should make this growth more stable and double-digit increases. The IFCI index for sustainable. Most equity markets in the re- Europe, the Middle East, and Africa gion currently trade at price-earnings ratios (EMEA) increased 6.4%. Hungary's and below their sustainable earnings growth. The IFCI Mexico index rose 12% in the first - | | | , , , , quarter. Most of this gain (8.5%) was in FIGURE 5 March, when yields on 28-day treasury bill SELECTED EMERGING STOCK MARKETS, 1996Q1 In e la (Cetes) dropped 261 basis points to 38.94%. IFCI price index, percentage change in US$ Since one Since lost year ago quarter Mexico's recession bottomed out during Ml 3 the second half of 1995, and some market analysts expect the economy to grow in the second half of 1996, buoyed by a strong +3.4 - m+l3.8 +32 8 -9 +l4 .5 trade surplus of $542 million in February that is projected to reach $7.6 billion for the year. Concerns about stock overvaluation have eased now that the market is trading at a price-earnings ratio of 18 instead of 29 as in August 1995. Investors remain cautious, +15.2n-i M+ .8 +42 )| + 1 1.7 -7.1 +713.5 however, because of the weak banking sec- tor and fears of higher inflation once the minimum wage takes effect in April. Venezuela's market increased 13.4% for the Source: Internaiona Fnance Corporatondcata quarter, fueled by local and foreign buying 10 FINANCIAL FLOWS AND THE DEVELOPING COUNTRIES EQUITY PORTFOLIO AND FOREIGN DIRECT INVESTMENT activity. High inflationary expectations, Gedeon, which was partially privatized and Ist which do not appear to be adequately re- floated a year and a half ago, rose from $12 Q9u96er flected in interest rates, have encouraged a share at the time of initial public offering local investors to switch from fixed-income to $35. The share price of Egis, another IFC price index, percentage investments to stocks, while foreign in- major pharmaceutical firm, increased after change in US$ vestors found the foreign exchange rate still Servier of France acquired a 51% stake. Since one Since lost year ago quarter favorable and share prices relatively cheap. Pharmativ, a new company, was acquired by -6 -8.8 The agreement with the IMF in April fur- the US company Bristol-Myer Squibb in a ther encouraged the market. Chilean shares public takeover of a listed company-the fell 9% for the quarter as interest rates re- first such takeover on the exchange. mained high, attracting investors into the Poland's market increased 41% for the fixed-income market. Fears of a more severe quarter, fueled by demand from foreign in- decline in share prices eased after resolu- vestors. Monthly trading volume increased tion of a dispute between management of significantly in February ($553 million) )st GT Chile Growth Fund and Regent King- over mid-1995 ($185 million). Analysts Quarter 1996 pin. Regent, an investment management viewed favorably the outlook for economic _ company, had threatened to sell its consid- growth and corporate earnings (GDP in- IFCI pace index, percentage erable holdings in GT if not given control of creased 7% last year), although inflation re- change in US$ the fund. Argentina's market posted less mains on the high side. The privatization Since one Since last than a 1% gain for the quarter. The market program continues to make progress, as the year ago quarter than a ~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~+65 +42 recovered only slightly in March from private sector's share of industrial goods February's 13% decline, which was tied to sales increased from 39% in 1994 to 44% in uncertainty over the passage of the "super- 1995. An easing of some of the rules gov- powers" legislation giving the administra- erning direct investment became effective tion the authority to impose emergency April 1. taxes if revenues are insufficient to cover ex- Elsewhere, equities in the Czech Repub- penditures. The new agreement with the lic rose 14% for the quarter as new foreign IMF was a positive sign for the markets. capital flowed into the market. The Min- The IFCI EMEA index gained 6.4% for istry of Finance has approved the county's the quarter. The Hungarian market rose third stock exchange, RTP (Real Time 48%, as foreign and local investors flocked Price), which is expected to begin opera- to the market. The appointment of the new tions in September. The Turkish market finance minister, who vowed to continue grew 49% for the quarter but fell by less the government's stabilization program, than 1% in March, mainly as a result of the was well received by market participants. sharp devaluation of the lira during the The March agreement with the IMF on a month. Investors welcomed news that the $387 million standby loan also improved coalition government will move forward market sentiment by signaling the govern- quickly with measures to curb public spend- ment's commitment to IMF targets. The ing, reduce inflation, and privatize state central bank's announcement of its inten- firms. Investors remain cautious, however, tion to slow the devaluation of the forint as the widening of the trade deficit keeps (currently 1.2% a month) in the second the devaluation threat alive. half of the year also was well received. Phar- The IFCI Asia index rose 9.5% during maceuticals, which account for about 25% the quarter. Malaysian equities were up for of total market capitalization and are the the fourth consecutive month, and the out- most important sector in terms of exports look for interest rates and corporate earn- and domestic production, performed very ings remains favorable. Indian equities rose well. The price of shares in Richter 15% for the quarter, despite the political MAY 1996 11 EQIJ TY PORTFOLIO AND FOREIGN DIRECT INVESTMENT NEW EQUITIES AND FIGURE 6DEIA VS INTERNATIONAL EQUITY ISSUES, DERIVATIVES BY REGION US$ billions U NEW EQUITY ISSUES RETREAT FROM 19.6 FOURTH-QUARTER LEVEL __ ~~~* Other El Latin America Despite improved price performance in * East and South Asia emerging markets during the first quarter, 12.2 some prospective issuing firms may have stayed on the sidelines in anticipation of con- tinuing market improvement and more favor- 4.8 able investor sentiment toward emerging- 2.8 market issues. Equity issues by emerging mar- ket firms fell to $2.8 billion in the first quarter 1994 1995 1995Q4 1996QI (figure 6), less than the $4.8 billion issues in Note Eqityfigus iclue dmestc tances.the fourth quarter of 1995 but well above the Note: Equity figures include domest c tranches. Source F -oney ure u-d- Word Bank. $500 million raised in the same quarter last year following the Mexican crisis. Issues for uncertainty attending the April general privatization accounted for $1 billion. elections and a bribery scandal involving Issuing activity was led by firms in East and high-ranking officials. Foreigners, who in South Asia, which raised $1.4 billion. India February bought a record net $462 million raised $435 million-$125 million of it for of stocks, may have been encouraged by the 15% of equity in the privatization of the Steel relatively low price of Indian stocks (the Authority of India. The final offer was lower market traded at 11 times 1996 earnings ex- than the government had anticipated. The TABLE 6 pectations dturing the quarter, the lowest deal was not as well received by investors as DEVELOPING price to earnings ratio in the Asian region those for Bombay Suburban Electricity Corp. COU NTRI ES' BEST- PERFORMING except for Sri Lanka). Foreign purchases (BSES), which raised $125 million, and CLOSED-END subsided a bit in March, when the market Larsen and Toubro. Demand by US investors EQU I TY FU N DS rose only about 1%. In March the exchange for the BSES issue was particularly strong, and Average halved the allowed settlement period for it sold at a premium of 2.4% of the stock's trad- return March 1996 the most actively traded stocks to one week ing price on the local stock exchange. Al- Market (percent) in an effort to reduce the number of specu- though BSES, selling at 18 times earnings, is a Mexico (3) 8.02 lative trades. Thai equities fell less than 1% relatively expensive utility stock, the company Malaysia (3) 6.45 Czech Repubi c (3) 3.39 for the quarter, mainly on fears of higher in- does have a monopoly over supply in Bombay Ediar(I 3) i 33 flation and higher interest rates. Trading and is thought to have a strong earnings Turkey (3) 1.33 turnover has focused on 20 large-capitaliza- growth potential. The global depository re- Russia (0) 1.24 tion firms mostly in banking, finance, and ceipts (GDRs) issued by Larsen and Toubro, a Latin America (20) 0.88 Korea, Rep. of ( 17) 0.79 teleconiiiunications; thle remaining 400 or leading engineering conglomerate, were well Argentina (4) 0.44 so stocks are almost illiquid. The Indone- received by investors and also sold at a pre- Emerging markets (29) 0. 15 Vietnam (5) 0.03 sian market increased 10% in the quarter. mium. The companyraised $135 million from Brazil (6) -0.32 Bapepam, the stock market regulatory au- the issue. Thailand raised $313 million, $239 Chi e(6) -1.98 Tha land (10) -2.17 thority, issued regulations under the newly million for the privatization of Electricity Gen- China (5I ) -2.21 introduced Capital Markets Law, which al- erating Public Company. Korean firms raised Africa ( 10) -2.26 Indonesia (9' -2.86 lows foreigners to own up to 89% of a listed $169 million. Beginning with the third quar- Philippines (4) -4.06 company and 100% of a mutual fund (both ter of 1996 Korean banks will be allowed to Note. As of March 30. 1996. had been capped at 49% previously). Indi- issue GDRs up to $200 million, a further step Figures is parentheses are the number of funds nthe category. vidual foreign investors may purchase only in the liberalization of financial markets tied Source: L pper Internat onal Closed-End Funds Service. 1% of a mutual fund's total assets, however. to Korea's aim of gaining OECD membership. 12 FlNANCIAL FLOWS ANr SHE DELVELtOPFNG COUNTRIES EQUiTY PORTFOLIO AND FOREIGN DIRECT iNVESTMENT Issues from Latin America in the first fected by the recent escalation of violence in TB 7 quarter of 1996 amounted to $588 million, a that country. The MedFund ($30 million), DEVELOPING- bit higher than the previous quarter's $467 with an investment focus on the Middle East COUNTRY FUNDS: ToP FIVE DISCOUNTS million. The Chilean company Enersis, the and North Africa, was launched during the AND PREMIUMS first from the region to issue American de- first quarter. The Oasis Fund ($5 million) Percentage difference between net pository receipts (ADRs) in the market, will tap investors wishing to invest in interna- osset value and share pnce Percentage raised $111 million. Demand was so high that tional markets according to Islamic princi- difference Enersis exercised the greenshoe (the right to ples. Other funds established during the Lorgest discounts issue more shares) within three days of pric- quarter to invest in emerging markets in- CH China Investments Ltd. -31.24 ing. Mexican firms raised $310 million. The clude the Fleming Poland Fund to invest $30 Jardine Fleming first deal to come to market since the peso de- million in listed and unlisted companies, the China Reg on Ltd. -27.40 valuation was Corporacion Industrial San- closed-end Templeton Central and Eastern Thailand International luis's $60 million offering, about 75% of it European Fund ($175 million) to invest in Fund Ltd. -24.76 placed outside Mexico (half in the United equities, the Second Central Asian Invest- Thai Development Capita -22,96 States, half in Europe). Foreign investors ment Co. ($60 million) to invest in the states Largest p5remiums may have found the Sanluis issue more at- of the former Soviet Union with a focus on Templeton Russia tractive than other domestic issues because equity stakes in privatization programs, the Fund Inc. 18.47 Templeton Emerging most of the company's sales are generated in West Africa Growth Fund ($26-$40 million) Markets Fund Inc. 18.12 US dollars. Elamex, another Mexican ex- to invest in CFA countries in WestAfrica (IFC Emergng Markets Income Fund l1Inc. 13.82 porter and the first Mexican offering since will hold 25% of the fund), and the Beta Indonesia Fund Inc. 13.75 December 1994 to be registered with the US Gran Caribe ($35 million), the first fund to India Growth Fund Inc. 12.85 Securities and Exchange Commission (SEC), invest in Cuba. Note: As a March 30, 1996. Securities and Exchange Commission (SEC), invest in Cuba. Source: L.pper International Closed- raised $28 million. The company was mar- End Funds Service. keted as a small-capitalization US company. X CLOSED-END EMERGING-MARKET FUNDS Panamerican Beverages Inc., a company that OUTPACE INDUSTRIAL-MARKET COUNTERPARTS focuses on the Mexican domestic market, Closed-end equity funds targeting the raised $222 million in the first quarter. Ar- world's emerging markets ended the first gentina, another victim of the peso crisis, was quarter of 1996 up 6.04% compared with also in the market during the quarter. 5.88% for funds in the industrial markets. Quilmes Industrial raised $167 million Turkish and Brazilian funds were the big win- through an ADRs issue. ners, up 32.2% and 15.99%. The Turkish Issues from Eastern Europe totaled $329 Growth Fund was the top performer during million, all of them related to privatizations the quarter (41.5%), followed by Baring (see section on page 15 titled "Privatization Emerging Europe Trust (28.98%) and proceeds drop"). South African firms raised Turkey Trust PLC (28.7%). In March, how- $142 million in the international equity mar- ever, the top-five funds (by growth in net ket. BMCE, the first Moroccan bank to issues asset value) traded at an average discount of GDRs, raised $52 million. 6.67%, with the lowest being Turkey Trust, trading at a 19.61% discount to net asset m NEW FUNDS TO INVEST IN THE value. MIDDLE EAST Mexican funds gained significantly dur- Foreign investors will be able to invest in ing March and at 8.02% as a group, they were Lebanese shares despite the lack of a func- the top-performing equity funds based on tioning stock exchange in Beirut. The net asset value (table 6). Overall, the top-per- Lebanon Country Fund was launched to in- forming individual equity fund was also Mex- vest $100 million, and the Lebanon Fund to ican (Mexico Fund Inc., up 10.36%), invest $50 million, in Lebanese projects. It is influenced significantly by the performance unclear how plans for these funds will be af- of US stock and bond markets, resource flows MAY 1 996 13 EQUiTY PORTFOLIO AND FOREIGN DIRECT INVESTMENT to the Bolsa, and the revaluation of the Mex- Caribbean was the second largest recipient, ican peso relative to the US dollar. at about $18 billion. Eastern Europe and Emerging-market bond funds were also Central Asia received $13 billion in FDI, with up for the quarter, reporting gains in their Hungary leading the region. FDI flows to net asset values of 5.21% and share price South Asia reached $2 billion in 1995, two- gains of 12.03%. thirds of it to India. At $2.2 billion to Sub-Sa- haran Africa and $2.1 billion to North Africa * INTEREST IN LATIN AMERICAN and the Middle East, FDI flows were much DERIVATIVE MARKETS REVIVES lower than the previous year. The Chicago Board of Trade (CBOT) and As in the past a few countries received the the Chicago Mercantile Exchange (CME) bulk of FDI flows. Twelve countries, includ- launched futures and options contracts on ing China, accounted for about three-quar- the Brady bonds of Argentina, Brazil, and ters of 1995 FDI flows. China, the largest Mexico in March. The limited information recipient in the developing world, received on volumes to date suggests that the CME $38 billion, or about 42% of such flows. The products are more popular than rival Chinese government has successfully redi- CBOT's index-based contracts. After three rected investment to favor infrastructure (en- days of trading from March 26 to 28, futures ergy, transportation) and to increase the on the CME's Brady bonds had traded a total investment stake of multinational corpora- of 7,219 lots, including 5,709 lots of Brazilian tions in each project. Average investment in C bond futures. Futures on the CBOT's Mex- each project rose to $2.45 million, up from ico Brady index had traded only 63 lots since $1.77 million in 1994. On April 1, 1996 their March 1 launch and a total of 230 op- China's preferential tax treatment on capital tions. CBOT also agreed to develop a finan- equipment imports for foreign-funded en- cial futures and options exchange in terprises was to end. However, that change is Argentina, in conjunction with the Buenos not expected to affect future FDI flows to the Aires stock market Merval and the Bolsa de country. Comercio de Buenos Aires. Thejointventure Elsewhere, the government of the Philip- initially envisages creation of short-term in- pines plans to speed up legislation to attract terest rate, currency, and stock index con- foreign investment by protecting intellectual tracts. As in the fourth quarter of 1995 Brazil property rights, opening the retail sector to issued the largest volume of new interna- foreign competition, permitting foreign in- tional bonds with put and call options ($575 vestment houses to own local mutual funds million). companies, and providing tax incentives for multinational investment. The government also beefed up an already generous incentive FOREIGN DIRECT INVESTMENT package in an attempt to persuade General AND PRIVATIZATION Motors (GM) to choose the Philippines over Thailand for a $1 billion plant. The govern- * FDI IN DEVELOPING COUNTRIES HITS NEW ment offered to pay for a $20 million per- HIGH IN 1995 sonnel and research and development FDI flows into developing countries reached institute connected to thle plant, provide free a new high of $90 billion in 1995-up 13% land for up to five years, exempt capital im- from 1994-and accounted for 38% of all ports from duty payments, and upgrade in- FDI flows. East Asia and the Pacific contin- frastructure facilities at ports adjacent to the ued to be the largest recipient, with an esti- site. GM will build a $340 million car plant in mated $54 billion, a 25% increase over the southern Poland, which is becoming an im- previous year. Latin America and the portant center for the auto industry. The 14 FINANCIAL FLOWS AND THE DEVELOPING COUNTRIES EQUITY PORTFOLIO AND FOREIGN DIRECT INVESTMENT plant will receive all the financial incentives investors, and the government plans to issue of a special economic zone under Polish law, an additional 2% of equity in the near future. including a tax holiday of up to 15 years and Thailand raised $239 million from the sale of duty-free imports of machinery, equipment, Electricity Generating Public Company, and and components. India sold 15% of the Steel Authority of India The outlook for FDI flows to developing for $125 million. The deal was placed in Asia countries continues to be bright. According (40%), Europe (40%), and the US (20%). to a survey by the consulting firm Arthur An- In Eastern Europe Hungary and Poland derson, managers and business experts in the are moving along with their privatization US, Europe, andAsia expectFDI flows to grow programs. The Dutch banking group ING strongly up to the year 2000, more to improve acquired the Hungarian state-owned bank access to foreign markets than to reduce pro- Dunabank for an undisclosed amount. The duction costs. Asia (excluding Japan), Latin government sold 50% plus one share of its America, and Eastern and Central Europe regional gas distribution companies for were named as the top destinations for in- about $460 million: DEGAZ and EGAZ were vestment. Manufacturing industries, led by sold to Gaz De France, DDGAZ to a German telecommunications and information tech- consortium, KOGAZ to a Austrian and Ger- nology, were expected to be the leading over- man consortium, and TIGAZ to an Italian seas investors, while investment by property consortium. The government also privatized and financial services companies would be part of its pharmaceutical firm, Borsod- lower than in previous years. Chem, for $58 million. The Polish govern- ment recently sold 33% of ZPT Krakow to Q PRIVATIZATION PROCEEDS DROP Philip Morris for $227 million and an in- Privatization proceeds from international vestment commitment of $145 million. public offerings fell to $4.6 billion in 1995 Once completed, this investment will in- after peaking at $6.8 billion in 1994. The crease Philip Morris's stake in the company decline was attributed to the Mexican peso to 65%. The government plans to sell 90 en- crisis, which put a damper on issues- tities by the end of the year, including the particularly from Latin America. For the first airline LOT, the mining concern KGHM, quarter of 1996 developing countries raised and the engineering group Polimex-Cekop, $1 billion from international public offers for and to put most of its electricity generating privatization. The Ghanaian government and distribution sector into private hands sold 6.2% of Ashanti Goldfields and raised within seven years. The government is in the $112 million through an international public final stage of choosing an adviser for the pri- offering. Croatia made its debut in the inter- vatization of the Patnow-Adamow-Konin national equity market, raising $140 million complex, which provides 10% of the coun- through the issuance of GDRs and interna- try's power. Two regional distributors, ZE tional private placement for 30% of its phar- Gliwice and ZE Poznan are also to be sold maceutical firm Pilva. Russia raised $131 this year. The country's privatization scheme million through ADRs for LUKoil, its giant for the power sector is modeled after that of gas and oil company. The issue was classified the UK. Poland also plans to restructure and as unrestricted level one by the US Securities privatize the oil industry. Foreign investors and Exchange Commission, which will allow will initially be able to purchase 30% of an all investment institutions to purchase the entity. If they are willing to invest to mod- issue. Greece sold 6% of the long-awaited ernize the facilities, their stake in the entity shares in OTE, the telecommunications com- could increase. pany, and raised $167 million. The deal was The Romanian government is relaunch- oversubscribed by domestic and foreign ing its privatization program after a year and MAY 1996 15 EQUITY PORTFOLIO AND FLOREIGN DIRECT INVESTMENT a half delay. Some 3,900 medium-size and country, for an undisclosed amount. Last large companies will be put on the block in year the group bought a controlling stake in the agricultural, trade, and tourism sectors, Sepap AS, the largest Czech paper company, using a combination of vouchers and direct in hopes of building a powerful Eastern Eu- sales. Up to 60% of each company's shares ropean paper group. will be eligible for coupon exchanges and the Elsewhere, Bolivia sold 50% of ENFE remaining 40% will be available for cash sale (the state railroad) to Chile's Cruz Blanca to Romanians and foreign investors. In addi- for $39 million. The government has again tion, the State Ownership Fund must sell 200 postponed the sale of Yacimientos Petrolif- or so large problem firms whose arrears of eros Fiscales Bolivianos (YPFB) and delayed unpaid bills and nonperforming bank loans the presentation of bids to the end of May. are estimated at 17% of GDP. Daewoo, the The capitalization program will involve the Korean industrial group and by far the largest sale of 50% of the company to a foreign op- foreign investor in Romania, plans to acquire erator, with the rest to be distributed to the 51% of a shipbuilding yard on the Black Sea population. Public polls show considerable in ajointventure with the government. Slove- opposition to the sale, which is subject to nia has put in place a voucher privatization passage of a new hydrocarbons law by program, that gives each citizen vouchers congress. Brazil sold part of its rail network worth $787 or more (depending on age) to under a 30-year concession to Noel Group be used to purchase shares in companies or of the US for $63.4 million. PTT Telecom in investment funds. So far about 412 com- of the Netherlands will purchase a 17.28% panies have been sold and 1000 are in the stake in the Indonesian GSM mobile phone process of being sold. Excluded from the service for $340 million, while a local group program are a number of strategic compa- will take a 5% stake in the company for $88 nies such as utilities, telecommunications million. The government of Kenya plans to providers, and two major banks. The US- sell 48% of Kenya Airlines through a do- based Stratton Group acquired a controlling mestic and international public offer. The stake in Russia's paper sack and kraft paper offeriilg follows the purchase of a 26% manufacturer Segezhabumprom, the small- stake in the airline by the Dutch carrier est of the seven such manufacturers in the KLM. SECONDARY MARKETS FOR DEVELOPING-COUNTRY DEBT * WIDE SWINGS IN SECONDARY MARKET 3 cents drop in the US Treasury bond mar- PRICES DURING FIRST QUARTER OF 1996 ket and concern about the soundness of the banking system in Brazil and the govern- Prices of secondary-marketinstruments gained ment's commitment to reform. Almost all strongly in January but then fell, followed by major instruments suffered losses, some as wide swings at the end of February and into much as 4 cents in a week, with most of the March (figure 7). Overall, prices were down selling by dealers themselves. The problems for the quarter. The major cause was activity in of Brazil's Banco Nacional led to sell-offs of the US Treasury market, particularly the rise in emerging-market debt, particularly Latin interest rates in the second half of the quarter. benchmarks. While there was some recovery Investors appeared nervous even though fun- toward the end of March, Argentine pars damentals are strong in most countries. ended the quarter down at 52 cents and Prices were volatile and low for several Venezuelan pars at 56 cents. Mexican pars weeks in March. Prices plunged following a were less volatile and ended the quarter at 16 FNANCIAL FLOWS ANED THE DEVELOPING COUsNTRIEs SECONDARY MARKETS FOR DEVELOPING-COUNTRY DEBT 64 cents, about the same price as in early tives were in Buenos Aires for the annual January. meetings of the Inter-American Develop- Prices were relatively quiet at the end of ment Bank. Traders hope that the market the quarter when many traders and execu- has now stabilized. OFFICIAL FLOWS: MULTILATERAL AND BILATERAL MULTILATERAL FLOWS to greater involvement of domestic financial * WORLD BANK COMMITMENTS UP IN FIRST institutions and capital markets in the infras- QUARTER tructure sector. The project also aims to de- velop prototype contractual arrangements World Bank commitments for the first quar- for private investment in bridges, water sup- ter of 1996 amounted to $4.4 billion, up ply and sewerage, effluent treatment, and slightly from $4.1 billion in the fourth quar- other municipal infrastructure-areas domi- ter of 1995. China, India, Indonesia, Roma- nated by the public sector. While the Bank nia, Russia, and Vietnam accounted for about has made other loans to private sector enti- 70% of total commitments. First quarter com- ties, it does so infrequently-the last loan of mitments from the International Develop- this type was in 1991. ment Association (IDA) were $1.8 billion, up from $1.1 billion in the fourth quarter. * IDB PLEDGES $1 BILLION TO PRIVATE SECTOR IN LATIN AMERICA X CHINA RECEIVES $440 MILLION TO The Inter-American Development Bank will BOOST POWER SECTOR provide more than $1 billion in loans and At the end of February the World Bank ap- grants to Latin America's private sector this proved a $440 million loan to help ease year, with initial lending in infrastructure, power shortages in China. The loan is part power, road, and water projects. This greater of a $1.2 billion project to build two power emphasis on private investment reinforces generators, erect transmission lines, and provide technical and other services. Inter- FIGURE 7 national commercial banks will contribute SECONDARY MARKET PRICE INDEX, APRIL 1993- $55 million to the project, and China will MARCH 1996 provide the rest. Apnl 1990=100 * WORLD BANK APPROVES $200 MILLION 220 -------- ----------- ------- - ------- -- --------- LOAN FOR PRIVATE FINANCE COMPANY IN INDIA 200 --------- - -.------- ------- - --------- ------ The World Bank approved a $200 million i loan (backed by an Indian government guar- 180 - - - antee) to Infrastructure Leasing and Finan- cial Services, Ltd.(IL&FS), a 51 % privately 160 - ----*--- owned financing company and a leading player in infrastructure financing. The loan 140 Brady par bond is intended to fill India's infrastructure finance gap and will assist IL&FS in financing 120 infrastructure projects on a build-operate- transfer basis. The project, designed to provide institution building and technical assistance support, can be seen as a precursor S MAY 1996 17 OFFICIAL FLOWS: MULTILATERAL AND BILATERAL TABLE 8 SUMMARY MEASURE the shift in many developing countries away Centroamericano de Integracion Econom- OF TERMS OF COVER from heavy state involvement. ica for an untied loan of 26.5 billion yen BY MAJOR EXPORT CREDIT AGENCIES (approximately $250 million). EXIMJapan U IMF AWARDS RUSSIA $ 1 0 BILLION LOAN will provide 70%, and a syndicate of private Score Score FOR ECONOMIC REFORMS financial institutions will provide the rest. Chile 93 97 The IMF approved an Extended Fund Fa- The loan will support tourism, power, re- China 88 71 Colombia 90 76 cility (EFF) credit for Russia at the end of gional highway development, harbors and Czech Republc 80 65 March totaling SDR 6.91 billion (equivalent airports, and telecommunications plants in Indonesia 83 75 Romania 88 73 to about $10 billion). The loan will be used Costa Rica, El Salvador, Guatemala, Hon- South Africa 83 81 Tunisia 88 81 to support the government's medium-term duras, and Nicaragua. The Commercial Turkey 88 75 stabilization and structural reform program Bank of Greece received an untied loan of Ghana 73 57 Hungary 71 75 and will be disbursed over three years. The 30 billion yen from EXIM to improve the Mexco 78 70 Morocco 77 68 credit is equivalent to 160% of Russia's IMF competitiveness of Greek exports such as Paklastdn 78 82 quota. The 1996 macroeconomic program processed foods, textiles, and cement, and Russia 71 54 aims primarily to bring annual inflation to promote the tourism industry. The loan Zimbabwe 79 72 down to single digits and to achieve sustain- will further the country's preparation for Argentina 61 74 Brazil 68 61 ability in the balance of payments over the integration with the EU. Also, in mid- Egypt 60 60 Philippines 65 83 next few years. Structural reforms seek to March EXIM Japan offered Brazil untied Venezuela 63 67 complete trade liberalization, strengthen yen loans equivalent to $1.1 million and a 3 Bulgaria 42 33 Ecuador 41 48 the banking system, speed privatization, billion yen overseas loan to promote in- India 57 72 and create a legal framework for full private vestment in Japanese-run businesses. This Iran 45 54 Peru 55 73 ownership of land. The success of the EFF marked the first involvement with Brazil Algeria 27 55 program will depend on the commitment of after several years of inactivity. EXIMJapan Angola 3 3 C6te d'lvoire 12 43 the Russian government. It is expected that noted that the Cardoso administration has Iraq 0 0 Kenya 32 39 the agreement will be followed by compre- managed to stabilize the economy and that Nigeria 0 29 hensive external debt rescheduling in order repayment of foreign debt is going accord- Note: As of end-September 1995. a Medium- to long-term. to avoid liquidity problems over the next ing to plan. S. Short-terml five years. The World Bank is also support- Union data. ing Russia's reform efforts and so far has a US Ex-Im BANKEXTENDS LOANS TO committed over $4.6 billion in projects in TRINIDAD AND TOBAGO AND UKRAINE such areas as the social sectors, infrastruc- The Export-Import Bank of the US ap- ture, and financial sector development. proved a $240 million project financing loan for an ammonia plant in Trinidad and To- Note: The last issue contained an error. The bago. This deal marks the bank's first lim- grant by the Global Environment Facility to ited-recourse project finance transaction in Russia should have been given as $3.2 mil- that country and its first loan for an anhy- lion, rather than the $3.2 billion reported. drous ammonia plant project. The project is sponsored by a US company that will build, own, and operate the plant. The govern- BILATERAL ODA AND EXPORT ment-owned gas company will supply natural CREDITS gas. During the pre-completion phase com- mercial financing will be backed by a politi- * EXIM JAPAN LOANS SUPPORT ECONOMIC cal risk guarantee. Upon completion the US DEVELOPMENT IN CENTRAL AMERICA, Ex-Im Bank will replace this financing with a BRAZIL, AND GREECE $240 million direct loan. Also, Ex-Im issued On April 1 the Export-Import Bank of a guarantee to support $187 million worth of Japan signed an agreement with Banco exports of agricultural combine harvesters 18 FINANCIAL FLOWS AND THE DEVELOPING COUNTRIES OFFICIAL FLOWS: MULTILATERAL AND BILATERAL and related equipment to Ukraine. The TABLE 9 equipment will be used to boost grain pro- PARIS CLUB RESCHEDULING AGREEMENTS, duction for domestic and export sales. The JANUARY-MARCH 1996 us$ milions commercial loan is also backed by a repay- Date of Consolidated Cutoff Consolidation ment guarantee by the Ukraine government. Country agreement amount date period through Terms This is the first guarantee for Ukraine since Zambia 27 Feb 96 JI an 83 31 Dec 98 Naples Honduras 19 Feb 96 IJun 90 31 Jan 97 Nap esa Ex-Im restored its programs there almost a Sierra Leone 28 Mar 96 I Jul 83 31 Dec 97 Naples year ago. . Not ava lable. a. 50% reduction on maturit es, Source: World Bank. DEBT RELIEF UPDATE OFFICIAL CREDITORS 1986 Paris Club agreement. Debt service S PARIS CLUB CREDITORS REACH THREE falling due on the 1992 and 1994 agreements AGREEMENTS IN FIRST QUARTER was rescheduled on nonconcessional terms. The Paris Club also accorded Honduras a Zambia signed a Naples terms agreementwith 50% reduction in the present value of debt the Paris Club providing for a 67% reduction service due on debt contracted prior to the in the present value of debt service on debt cut-off date and not previously rescheduled. contracted prior to the cut-off date and not The agreement did not provide for any in- previously rescheduled (table 9). Zambia's crease in concessionality for the debt covered agreement also provided for topping up debt- under the most recent Paris Club reschedul- service forgiveness on previously rescheduled ing on Toronto terms (1992). debt, including the most recent Paris Club agreement (1992), to a 67% reduction in pre- sent value terms. Sierra Leone's creditors COMMERCIAL CREDITORS agreed to a 67% present value reduction of debt service on pre-cut-off nonconcessional No agreements were reached with commer- debt and debt service due on the country's cial bank creditors during the quarter. COMMERCIAL BANK PROVISIONING AND CAPITAL ADEQUACY CAPITAL RATIOS SHOW MIXED TABLE 10 RESULTS RISK-WEIGHTED CAPITAL RATIOS Percent, March 1996 Major British banks, with the exception of Tier I Totol Tier I Total Ter I Total Lloyds, saw increased tier 1 and total capital UK (f)" France (F) United States (US$) ratios (table 10). The decline in capital for Barclays 7.7 10.9 BNP 5.8 10.2 BankersTrust 8.0 13.1 Lloyds TSB 5.9 9.6 Credit Lyonnais 4.5 8.5 Citicorp 8.4 12.3 Lloyds is attributed in part to its recent Nat West 6.7 10.7 Soci6t6 Gen6rale 5.7 9.2 J. P Morgan 8.2 12.1 merger with Trustee Savings Bank. Capital ra- HSBC 9.5 14.7 Paribas 7.9 8.8 tios for Canadian banks in January remained Canada (C$)0 Germony (DM)a largely unchanged from the month before. Bank of Montreal 7.1 9.8 Dresdner 5.6 9.5 Results were mixed for European banks. De- BankofNovaScotia 6.7 9.4 Commerzbank 5.4 9.0 Canadian Imperal 6.8 9.3 Deutsche 5.7 9.5 spite some improvement in profitability of a. As of December 1995. money center banks in the first quarter of b. As ofjanuary 1996. Souirce: Sal omon Brothers, IBCA. 1996, capital ratios for major US banks were lower than in the previous quarter. MAY 1996 19 FINANCIAL BRIEF WHAT DETERMINES FOREIGN TABLE 11 INVESTMENT? WHICH COUNTRIES ATTRACT MOST FDI, SELECTED YEARS, 1990-95 US$ billions Foreign direct investment (FDI) has be- /990 / 993 /994 9950 come an important source of capital for de- - - -- By country of destination veloping countries. In 1995 developing China 3.5 27.5 33.8 38.0 countries attracted $90 billion in FDI, or Mexico 2.5 4.4 8.0 4.1 39% of total capital inflows compared with Argeaytia 2.3 6.0 4.32 5. 25% in 1990. FDI can contribute to devel- Indonesia .1 2.0 2.1 4.5 Brazil 1.0 1.3 3.1 3.1 opment in many ways-through risk sharing Thai and 2.4 1.7 0.6 2.3 and market discipline, tlhrouglh its export Hungary 0.0 2.3 1.1 4.2 orientation and relative stability, and Chile 0.6 0.8 1.8 2.3 Poaand 0.1 1.7 1.9 1.8 through the technology and management Nigeria 0.6 1.3 2.0 0.7 expertise it brings to the host country. Greece 1.0 1.0 .0 0.8 expertise country. ~~~~~ ~ ~~~~~~~~Other 8.0 2.8 19.2 18.8 There are, however, big differences in the Percentage share of top pattern ofFDI across regions and countries. 12ccuntres 68.0 81.2 76.0 79.2 In 1995 almost 80% of FDI to developing Note: The country ranking is based on cumulative 1990-95 FDI countries went to just 12 countries, with received. a. Pre m nary. China alone taking 45% of the $90 billion Source: World Bank staff estimates based on balance of payments data reported by the IMF and data on net fore gn nvestment inflows (table 11). By r-egioni East Asia and reported by the OECD. the Pacific took the lion's share at an esti- mated $54 billion, while Sub-Saharan Africa itative arguments often made in the litera- received only $2 billion (figure 8). ture, a recent study set out to answer three Many studies have examined the determi- questions: How does sociopolitical stability nants of FDI, but their methodology and con- (or instability) affect FDI? Does the percep- clusions have varied enormously. To address tion of favorable business conditions in- issues that have not been adequately ex- crease flows? Do export-oriented economies plored in earlier studies, and to provide attract FDI, or does FDI encourage exports- quantitative evidence in support of the qual- and does most investment go into exports of primary goods, manufacturing, or services?i - IInstability. It is hard to measure the im- FIGURE 8 pact of sociopolitical instability on FDI be- REGIONS THAT BENEFIT THE MOST cause of the difficulty in finding reliable US5$ billions903dfiut fnig US$billios903 quantitative estimates of what is essentially a 80. I qualitative phenomenon. Past studies do not 683 even agree that political risk has any affect 1. 111 11 11 on FDI. The problem is that most proxies 46.7 capture only some aspect of this determi- 35.0 nant of FDI. Not surprisingly, then, conclu- 25.1 sioIIs vary enormously depending on the proxy used. This study investigates the sepa- rate impact on FDI of a political risk index 1990 1991 1992 1993 1994 / 995' and a measure of economic impact of insta- * East Asia and Pacific U South Asia bility (working days lost). Note that the sec- f Sub-Saharan Africa Latin America and Caribbean ond index represents a subset of the , Europe and Central Asia U Middle East and North Africa concerns reflected in the first one. Though a Prelminary. still imperfect this approach provides a Source World Bank saffestimates based on baance of payments data reported by the IMF and data on net foreign investment reported by the OECD, fuller measure of the effect of sociopolitical 20 FINANCIAL FLOWS AND THE DEVELOPING COUNTRIES FINANCIAL BRIEF events on FDI than have other proxies. The relative size of exports is introduced as a con- FIGURE 9 EXPORT AND GDP GROWTH IN DEVELOPING trol variable in both equations. COUNTRIES ATTRACTS FDI Business Environment Risk Intelligence US$ biirons Percent has developed an index for rating all countries * FDI 90.3 14 according to the degree of political risk. The -Real export growth 80 1 12 index takes into account both internal divi- Real GDP growth 68.3 10 sions in the society and any dependence on (or importance to) a hostile power. It also con- 8 siders two symptoms of political risk-mass 46.6 6 demonstrations and politically motivated /0 4 street violence. Broadly, and not surprisingly, 25.0 2 the index rating is more significant for coun- tries with high net ratios of FDI to GNP. 0 The International Labor Organization 2990 1991 /992 1993 /994 l995 - publishes aggregate country data on the Note Data Include the former So, et Un on and Eastern Europe. number of work days lost because of indus- a. Prem,nmarya trial disputes or civil strife. This variable is more significant for countries with low net ra- tios of FDI to GNP. The results should be business conditions index significantly af- viewed with caution, however, because of fects FDI flows, particularly for countries missing data for most countries and because with high levels of FDI. The relationship be- some governments might not report data tween taxes on trade and FDI (as a ratio of even when there are major interruptions in GDP in constant dollars) is small and nega- production. tive for both high-FDI and low-FDI coun- When the ratio of exports to GDP is in- tries. However, once controls are introduced troduced as a control variable, the influence for market size (per capita GDP) and for ex- of the other proxies is substantially weak- ports (as a ratio of GDP), the relationship ened. The change is not unexpected, given between trade taxes and FDI becomes nega- that exports show the strongest correlation tive and insignificant for low-FDI countries with FDI, especially in countries with high and positive and significant for high-FDI levels of FDI inflows. countries-a sign of tariff-hopping as multi- Business climate. Specific investment in- national corporations seek to avoid import centives by governments seem to have only a tariffs on their goods or services by investing limited influence on FDI decisions, but it is in the host country. generally believed that a hospitable business Exports. The study shows clearly that man- environment is necessary to attract FDI. One ufacturing exports in particular are an im- goal of the study was to provide a quantita- portant determinate of flows to high-FDI tive test of this view. It used two proxies to do countries but not to low-FDI countries. And, so. One is an operations risk index, devel- although the dynamic relationship between oped by Business Environment Risk Intelli- exports and FDI is likely to be simultaneous gence, which rates countries according to to some extent, there is stronger feedback the preferential treatment (if any) given na- from exports to FDI-that is, export-ori- tive businesses and the general quality of the ented economies attract and encourage FDI. business climate. The second proxy is the The only exception is Singapore, where the share of revenues from taxes on interna- reverse appears to be true. The World Bank's tional trade, reported in the IMF's Govern- World Debt Tables 1996 also reports that sus- ment Finance Statistics. Not surprisingly, the tained real growth of exports as well as GDP MAY 1996 21 FINANCIAL BRIEF in developing countries tends to attract higher share of revenues from international greater FDI flows (figure 9). trade may have a positive impact on flows for Policy conclusions. For all countries a per- high-FDI countries. That does not mean, ception of sociopolitical stability is an impor- however, that taxing international trade is tant determinant of FDI. And for low-FDI advisable, since other costs (such as effi- countries instability, as manifested in work ciency distortions and the opportunity cost days lost, is a significant deterrent to FDI. of higher trade forgone) are likely to rise. Since foreign investment in these countries The relative size of exports is another is likely to be in primary, labor-intensive in- strong determinant of FDI flows. Manufac- dustries, a high premium is placed on good turing exports, especially, play a critical role, labor relations. For countries that already at- although their importance may subside tract high levels of FDI relative to GNP, direct somewhat with rising FDI flows in services sec- investments are likely to be capital intensive, tors in many countries. The study also shows which usually means a sizable investment and that export growth encourages FDI; there is a long-term commitment. Clearly, political little evidence of high feedback from FDI to stability is essential if investors are to make exports. The lesson? Even fairly well-estab- that kind of commitment. lished developing countries should promote The proxy for favorable business condi- a vibrant export sector under a liberalized tions seems to be a more significant determi- trade regime to encourage FDI flows. nant of the level of direct investment in the high-FDI group than in the low-FDI group. 1. "Some New Evidence on Determinants of This is consistent with the general notion Foreign Direct Investment in Developing that a minimally acceptable business climate Countries," by Harinder Singh and Kwang W. is essential before developing countries are Jun, World Bank, International Economics seriously considered as candidates for FDI. A Department, Washington, D.C. 22 FINANCIAL FLOWS AND THE DEVELOPING COUNTRIES STATISTICAL APPENDIX TABLE A.1 BANK AND TRADE-RELATED NONBANK CLAIMS US$ millions 1995Q2 Trode-related Bank Guaranteed nonbank Country group or cointry 1990 1991 1992 1993 1994Q4 Total cicims claims claims AlI developing countries 749,424 788.765 826,525 839,916 913,770 1,002,102 308,634 127,990 193,468 EastAsiaand Pacific 148,577 173,722 198,924 218,659 272,152 320,285 279,308 27,306 40,977 Europe and Central Asia 184,089 139,401 189,423 193,113 198,648 223,760 181,936 34,523 41,824 Latin America and the Caribbean 238,974 244,805 257,599 258,058 264,789 268,469 229,348 30,264 39,121 Middle East and North Afrnca 94,922 100,018 95,751 92,040 95,363 100,703 62,599 21,345 38,104 South Asia 22,489 21,566 25,383 23,265 26,376 28,885 23,434 6,516 5,451 Sub-Saharan Africa 60,373 59,253 59,745 54,781 56,442 60,000 32,009 8,036 27,991 Severely indebted middle-income 293,609 301,776 304,386 301,757 306,722 313,652 245,870 37,517 67,782 Algeria 21,0 4 21.805 18,661 18,208 20,833 22,840 14,935 9,931 7,905 Angola 2,370 2,680 3,453 3,167 2,904 2,841 1,558 532 1,283 Argentina 34,475 36,356 39,640 35,671 39,300 41,159 34,288 3,380 6,871 Bolivia 463 534 S04 691 681 725 400 48 325 Brazl 76,167 71,931 74,069 76,872 70,978 75.058 65,128 3,624 9,930 Gabon 2,161 2,051 1,952 1,828 1,867 1,757 665 138 1,092 Bulgar a 9,348 8,909 8,367 7,140 3,888 4,080 3,175 462 905 Ecuador 4,773 4,553 4.198 3,661 3,926 3,556 2,864 370 692 Jamaica 975 737 753 717 865 866 602 144 264 Jordan 3,657 3,297 2,369 2,700 2,655 2,728 1.451 668 1,277 Mexico 62,684 72,485 75,687 78,819 85,992 82,181 73,203 13,839 8,978 Panama 22,855 22,926 22,725 23,955 26,235 26,859 26,476 158 383 Peru 6,179 6,143 6,423 5,972 6,357 7,312 4,192 207 3,120 Poland 26,301 27,099 25,569 23,734 20,929 21,167 7,855 2,255 13,312 SyrianArabRepublic 1,219 1,107 1,334 1,229 1,269 1,358 599 62 759 Severely indebted low-income 54,788 54,188 54,634 53,048 52,688 56,342 31,175 4,582 25,167 Moderately indebted low-income 38,617 37,266 39,.03 35,387 37,584 40,046 26.987 8,039 13,059 Moderately indebted middle-income 210,629 216,913 228,335 225,201 234,471 256,247 210,819 46,675 45,428 Selected countries' 347,822 38 1,356 410,694 430,990 493,271 545,526 458,768 74,704 86,758 Chile 9,823 9,149 11,188 11,293 13,666 13,804 12,475 775 1,329 China 34,430 41,381 48,566 56,299 66,697 72,286 60,905 11,303 11,381 Colomba 8,889 8,479 8,795 9,244 0,352 1 I',1 1 9,788 1,408 1,323 C6te d'lvoire 4,379 4,042 3,986 3,625 3,566 3,676 2,092 268 1,584 Egypt 14,224 13,569 1 1386 10,448 10,054 10,383 3,185 1,399 7,198 Hungary 12,359 1,151 9,289 8,00' 8,761 9,508 8,660 848 848 India 5,640 15,383 18,601 16,460 18,489 19,375 16,373 3,892 3,002 Indoriesia 34,850 39,773 46,967 44,730 50,251 56,831 46,559 6,750 10,272 Korea, Rep. of 36,216 41,820 44,598 47,078 63.454 79,029 75,493 2,048 3,536 Malaysia 9,252 10,062 12,386 17,937 17,012 18,837 16,751 1,895 2,086 Morocco 8,002 8,053 7,994 7,410 7,747 8,265 5,555 2,664 2,710 Ngeria 12,796 12,896 13.386 12,348 12,462 13,934 3,893 1,743 10,041 Phil ppines 11,969 1 ,839 .D63 10,715 11,370 12,499 7,581 2,408 4,918 Thailand 18,035 24,953 30,552 37,872 59,581 76,729 70,333 2,712 6,396 Turkey 22,230 23,094 24,425 29,238 24,564 26,534 22,432 8,363 4,102 Uruguay 2,226 1,991 2,581 2,776 2,483 2,436 2,329 162 107 Venezuela 19,032 9,475 20,158 18,672 16,167 5,969 14,1 10 5,122 1,859 Offshore banking centers 14,937 119,142 135,967 147,872 154,538 178,309 169,755 4,468 8,554 Oil exporters 176,696 1 85,856 187,950 1 33,775 134,928 141,947 91,988 28,345 49,959 DRS reporters 132,264 139,563 142.242 87,385 83,086 86,542 54,129 24,988 32,413 DRS reporters 636,246 673, 82 708,S89 781,915 853,755 935,873 771,474 118,721 164,399 Note: See country classifcations at the end of statistica appendix a. Most of these countries are a so inc uded n the ndebted country groups. Source: OECD; Bank for Internationa Settlements, Statistics on External Indebtedness. MAY 1996 23 ST4A`)1STiCAL. APPENDIX TABLE A.2 COMMERCIAL BANK CLAIMS ON DEVELOPING COUNTRIES USS millions Claims Linbilities Country group or country 1994 1995QI 1995Q2 1995Q3 1994 1995QI 1995Q2 1 995Q3 All developing countries 752,893 792,626 821,698 842,453 626,057 665,774 688,7 8 711,029 East Asia and Pacific 236,176 257,187 277,813 297,282 117,183 1 17,037 120.356 125,828 Europe and CentralAsia 156,330 172,806 177,692 178,390 121,972 137,911 138,356 150,478 LatinAmericaandtheCaribbean 231,051 229,957 233,861 235,556 160,895 163,098 176,608 191,758 Middle Eastand NorthAfrica 73,837 75,003 73,961 71,923 139,970 152,368 156,6 0 149.486 South Asia 23,852 24,599 25,862 26,732 52,958 59,184 60,068 57,515 Sub-Saharan Africa 31,647 33,074 32,509 32,570 33,079 36,1 76 36,720 35,964 Severely indebted middle-income 249,582 250,623 252,137 251,897 162,1 13 1 65,665 8 1 ,67 1 196, 1 07 Algeria 14,278 14,416 13,820 13,053 3,866 3,780 3,485 3,319 Angola 1,599 1,481 475 1,497 522 555 731 61 1 Argentina 32,552 33,259 34,212 34,076 19,181 19,864 20,986 21,656 Bolivia 414 408 400 399 960 939 865 911 Brazil 61,794 62,673 64,719 68,297 35,840 37,535 47,727 58,557 Gabon 763 716 663 596 646 733 757 731 Bulgaria 3,153 3,275 3,144 2,956 1,596 1,650 1,671 816 Ecuador 3,253 2,801 2,842 2,9 8 3,495 3,236 3,487 3,261 Jamaica 604 590 599 602 816 853 988 1,096 Jordan 1,352 1,376 1,277 1,272 6,334 6,320 6,584 6,700 Mexico 76,833 74,336 73,161 70,773 25,876 24,181 25,641 27,531 Panama 33,264 34,872 35,371 34,443 40,348 41,941 42,306 42,474 Peru 3,320 3,492 4,172 4,133 5,251 4,775 4,792 4,313 Poland 7,489 7,390 7,216 8,020 8,900 10,267 12,050 13,181 Syrian Arab Republic 575 603 594 586 6,050 6,374 6,756 7,046 Severely indebted low-income 30,097 30,537 30,854 29,5 7 35,262 37,419 36,643 35,41 1 Moderately indebted low-income 24,453 25,417 26,578 27,160 49,065 53,447 53,653 52,923 Moderately indebted middle-income 188,C02 199,756 205,417 206,533 124,1 16 130,081 1 29,749 134,291 Selected countries' 409,438 430,639 450,466 467,495 251,601 257,572 260,491 269,160 Chile 12,284 11,983 12,389 12,795 11,402 12,138 1 2,303 1 1,455 China 56,464 58,292 60.162 61,572 59,952 59,492 57,288 57,799 Colombia 9,005 9,399 9,733 10,263 8,547 7,639 7,568 7,551 C6ted'lvoire 2,C40 2,031 2,037 1,994 2,226 2,784 2,111 2,149 Egypt 3,C74 3,169 3,152 3,014 27,970 29,049 29,395 29,305 Hungary 7,928 8,838 8,569 8,173 1,967 2,122 2,137 1,846 India 15,488 15,790 16,306 16,648 10,382 13.707 12,912 12,751 Indonesia 41,621 44,307 46,381 48,462 10,388 10,555 12,323 1 1,387 Korea, Rep.of 60,974 69,176 75,615 79,309 20,542 21,196 20,226 24,181 Malaysia 14,477 16,215 16,747 16,725 10,324 8,620 11,581 1 1,853 Morocco 5,C50 5,214 5,554 5,481 6,703 6,765 6,784 6,509 Nigeria 3,642 3,594 3,651 3,216 4,594 4,586 4,615 3,711 Philippines 6,543 6,624 7,333 7,370 6,749 6,676 7,232 6,507 Thailand 54,442 60,848 69,906 82,185 7,041 8,383 9,366 1 1,547 Turkey 16,569 18,361 18,803 19,882 18,91 1 21,797 22,045 24,560 Uruguay 2,380 2,213 2,31 0 2,363 5,507 5,678 5,837 5,572 Venezuela 13,376 13,260 12,701 12,061 20,864 20,867 20,263 21,708 Offshore banking centers 1,164,365 1,238,082 1,3 16,780 1,276,875 1,052,276 1,075,658 1,102,709 1,073,92 1 Oil exporters 103,349 105,895 106,272 101,792 162,51 1 174,22 179,771 169,753 DRS reporters 50,544 51,832 5 ,242 49,168 43,672 44,686 44,521 45, 20 DRS reporters 709,691 747,134 776,666 795,994 533,388 556,906 576,523 S02,814 Note: See country cassifications at the end of statistica appendix, a, Most ofthese countries are also included in the indebted country groups. Source: Bank for International Settlements, Intemational Bonring and Financial Market Developments. 24 FINANCIAL FLOWS AND THE DEVELOPING COUNTRIES S ATiSTICA,L APPENDIX TABLE A.3 COMMERCIAL BANK CLAIMS ON DEVELOPING COUNTRIES, BY COUNTRY OF ORIGIN US$ millions Canodo Fronce Country group or country 1993 1994Q4 1995QI 1995Q2 1991 1 992Q3 1992Q4 1993QI All developing countries 17,430 5,821 16,860 17,770 78,712 85,008 77,821 77,192 East Asia and Pacific 1,969 2,364 2,317 2,341 14,303 17,026 15,0 12 16,979 EuropeandCentralAsia 490 302 304 287 16,932 18,917 18,251 16,736 Latin America and the Caribbean 14,128 12,220 13,061 13,817 17,399 18,292 17,184 16,592 Middle Eastand NorthAfrica 295 342 313 465 17,371 17,467 15,524 15,269 South Asia 438 433 570 564 1,939 2,523 2,169 2,142 Sub-Saharan Africa 110 1 60 294 296 10,769 10,782 9,681 9,474 Severely indebted middle-income 6,295 6,533 6,741 6,558 28,541 29, 91 26,850 26,115 Ageria 2 34 24 17 5,775 5,287 4,613 4,656 Angola .. .. .. 730 744 745 628 Argentna 680 709 793 917 2,335 2,298 2,350 2,099 Bolivia .. 3 18 18 19 18 Brazil 2,736 2,383 2,422 2,388 7,885 8,292 7,693 7,447 Gabon .. .. .. 825 884 751 744 Bulgaria .. 654 664 621 542 Ecuador 1. 64 152 167 125 Jamaica .. 4 12 10 7 Jordan 1,020 1,095 746 740 Mexico 2,312 2,926 3,004 2,714 2,357 2,849 2,610 2,669 Panama 234 225 240 276 2,530 2,596 2,623 2,627 Peru 73 87 87 90 640 629 571 508 Poland 259 171 172 154 1,321 1,425 1,308 1,288 Syrian Arab Republic .. 271 285 271 241 Severely indebted low-income .. .. .. 16 8,380 8,795 7,832 7,446 Moderately indebted low-income 224 264 335 250 4,895 5,437 4,577 4,536 Moderately indebted middle-income 1,441 1,522 1,635 1,484 18,763 19,436 19,016 17,022 Selected countries 5.671 6,803 6,985 6,579 33,827 36,943 33,002 34,1 63 Chile 476 540 598 607 437 539 543 513 China 255 473 410 491 3,769 4,645 4,512 5,716 Colombia .. .. .. .. 512 575 589 624 C6te d'lvoire .. .. .. .. 1,936 2,065 1,793 1,412 Egypt .. 2,437 2,364 1,972 1,851 Hungary .. .. .. .. 217 175 153 144 India 224 264 335 250 1,362 1,783 1,451 I,328 Indonesia .. .. .. .. 2,537 2,692 2,431 2,541 Korea, Rep. of 843 885 969 940 4,573 5,904 4,664 5,205 Maaysia 381 297 234 248 455 712 659 694 Morocco .. .. .. .. 2,199 2,296 2,157 1,986 Nigeria .. .. .. 1,500 1,295 1,129 1,008 Philippnes 266 297 322 223 1,389 894 811 731 Thai and 224 412 382 440 1,276 1,701 1,668 1,850 Turkey .. 1,928 2,077 2,093 2,072 Uruguay .. .. 130 186 162 190 Venezuela 688 675 709 649 1,367 1,386 1,309 1,150 Offshore banking centers 10.602 1 1,610 12,046 13,486 35,166 42,766 40,286 38,450 Oil exporters 1,088 1,383 1,420 1,432 21,848 22,671 21,364 19,901 DRS reporters 1,037 1,247 1,297 ,272 17,1 14 17,633 16,221 14,136 DRS reporters 12,255 1 1,908 12,802 13,226 68,657 74,763 68,084 68,609 (toble contmues on next poge) MAY 1 99 25 STATIST!CAL APPENDIX TABLE A.3 COMMERCIAL BANK CLAIMS ON DEVELOPING COUNTRIES, BY COUNTRY OF ORIGIN (CONTINUED) US$ millions Germony Itcly Country group or country 1994 1995Q2 1995Q3 1995Q4 1994 1995Ql 1995Q2 1995Q3 All developing countries 156,689 180,461 182,051 189,294 27,346 27,781 28,391 27,491 East Asia and Pacific 24,152 27,700 28,502 32,765 52 SI 46 43 Europe and Central Asia 64,400 73,243 72,597 72,533 7,954 8,465 8,689 7,956 LabnAmencaandtheCadbbean 33,128 32,933 34,597 34,766 9,234 9,602 9,451 9,274 Middle East and North Africa 16,799 17,337 17,070 16,985 619 669 631 597 South Asia 9,267 11,145 10,439 11,102 3,067 3,212 3,349 3,367 Sub-Saharan Africa 7,401 7,816 7,861 8,063 1,136 1,132 1,038 1,000 Severely indebted middle-income 37,253 38,053 39,297 39,696 8,184 8,541 8,400 8,003 Algena 1,653 1,410 1,387 1,437 .. Angola .. .. .. .. .. Argentina 7,768 7,782 8,495 7,897 3,469 3,926 3,912 3,174 Bolivia 390 445 433 431 8 8 4 2 Brazil 9,028 10,171 11,070 10,934 1,675 1,800 1,757 2,130 Gabon 67 59 56 58 .. Bulgaria 1,212 1,219 1,200 1,150 341 363 373 346 Ecuador 617 270 246 207 164 107 107 154 Jamaica .. .. .. .. Jordan 480 537 530 534 .. Mexico 5,179 5,009 4,815 5,369 1,622 1,529 1,462 1,490 Panama 2,372 2,251 2,426 2,908 Peru 1,015 1,057 982 975 161 166 187 212 Poland 2,202 2,093 2,019 2,041 744 642 598 495 Syrian Arab Republic 589 655 645 645 Severely indebted low-income 6,757 6,459 5,330 6,429 722 673 644 598 Moderately indebted low-income 11,544 13,666 13,270 13,587 102 110 59 74 Moderately indebted middle-income 61,782 66,548 66,414 65,766 8,051 8,498 8,627 8,240 Selected countries 57,035 61,719 63,338 68,194 4,085 3,846 3,766 3,830 Chile 1,854 1,422 1,752 1,910 355 355 338 349 China 4,762 5,947 6,261 7,021 . Colombia 1,604 1,577 1,716 1,902 412 385 368 388 Cote d'lvoire 358 365 358 379 12 12 13 17 Egypt 2,635 2,966 2,876 2,902 Hungary 4,036 4,329 4,224 4,340 213 224 281 256 India 6,592 8,174 7,892 8,139 .. Indonesia 5,981 6,824 7,058 7,497 .. Korea, Rep. of 5,402 7,278 7,717 8,732 .. Malaysia 1,929 1,448 1,233 1,326 .. Morocco 1,147 1,306 ,276 1,257 298 279 272 269 Nigeria 670 687 569 553 710 661 631 581 Philippines 900 697 760 805 52 51 46 43 Thailand 4,042 4,414 5,222 6,318 .. Turkey 7,284 7,937 8,245 8,277 Unuguay 158 263 301 288 274 Venezuela 2,154 1,234 ,252 1,286 709 629 627 706 Offshorebankingcenters 93,730 101,783 106,260 122,347 21,483 20,321 19,565 20,869 Oil exporters 16,189 15,885 15,987 16,840 12,716 5,939 6,443 6,541 DRS reporters 10,716 8,836 8,656 8,499 7,431 1,290 1,258 1,287 DRS reporters 139,560 152,041 154,452 158,778 11,734 18,673 18,565 17,746 26 FINANCIAL FLOWS AND THE DEVELOPING COUNTRIES STATISTICAL APPENDIX Netherlonds Svvitzerlond Country group or country 1992 1993 1994Q4 1995Q2 1991 1992 1993 1994 All developing countries 21,291 22,902 26,533 29,655 23,632 23,769 25,453 28,698 EastAsia and Pacific 3,326 4,197 6,023 7,552 2,246 2,604 3,593 3,951 Europe and Central Asia 4,417 4,372 4,347 5,410 7,283 5,569 5,549 5,1 45 LatinAmericaandtheCaribbean 9,512 10,334 11,536 12,108 8,273 9,498 10,231 12,817 Middle Eastand NorthAfrica 1,782 2,027 1,841 1,976 2,836 3,164 3.136 3,293 SouthAsa 905 486 1,353 1,000 527 718 975 1,019 Sub-Saharan Africa 819 1,106 1,213 1,322 2,468 2,215 1,969 2,474 Severely indebted middle-income 7,312 7,872 9,264 9,867 11,933 11,897 12,144 14,406 Ageria 688 742 567 450 307 298 289 287 Angola ., ,. .. . 63 106 76 48 Argentina 1,439 1,425 1,622 1,732 1,471 1,604 1,365 1,821 Bolivia . . 12 16 25 43 Brazil 2,003 2,772 3,139 3,376 2,812 2,821 3,023 2,232 Gabon .. .. .. .. 14 8 7 10 Bulgaria . ., .. .. 445 248 264 75 Ecuador 257 360 391 264 125 132 145 163 Jamaica .. .. . . 18 8 2 2 Jordan . . . 93 106 82 96 Mexico 2,168 1,704 2,058 2,584 1,864 2,369 2,860 5,21N Panama 403 465 779 909 3,782 3,295 3,222 3,749 Peru .. 220 . 142 172 151 203 Poland 353 404 488 551 479 443 390 188 Syrian Arab Republic . . . .. 15 19 21 33 Severely indebted low-income 130 .. . .. 1,996 1,870 1,651 1,687 Moderately indebted low-income , .. 1,270 907 1,138 1,305 1,492 1,436 Moderately indebted middle-income 6,707 7,419 8,126 9,898 6,524 5,663 6,041 6,390 Selectedcountries 8,837 10,019 13,195 15,139 8,402 9,692 11,323 14,088 Chile 668 625 667 653 376 624 690 1,066 China 435 582 1,221 1,147 438 495 537 680 Colombia 537 613 749 765 168 291 374 561 C6te d'lvoire , , I III 100 99 115 Egypt 41. . 416 383 339 287 Hungary . 354 118 63 77 88 India 971 472 275 417 631 538 Indonesia 1,659 1,768 2,353 3,265 193 317 593 742 Korea, Rep. of 775 670 863 1,229 712 775 662 904 Malaysia . 282 475 474 172 150 509 295 Morocco . . .. ., 162 131 117 141 Nigeria .. ,. .. . 311 200 109 68 Philippines .. 315 439 532 144 121 165 158 Thailand 458 580 671 907 552 633 1,010 1,164 Turkey 731 1,308 1,373 1,537 1,579 1,617 1,534 1,295 Uruguay 546 659 757 697 79 106 218 242 Venezuela 719 831 787 771 665 839 844 629 Offshore banking centers 12,305 11,289 14,706 17,017 20,194 18,826 21,244 21,138 Oil exporters 3,984 3,237 2,357 2,282 6,1 55 5,291 4,398 4,586 DRS reporters 3,281 2,834 2,052 1,997 4,131 2,942 2,157 1,970 DRSreporters 14,723 16,605 21,204 23,456 22,127 23,264 26,189 29,295 (tsbise continues on next page) MAY 1996 27 S -15C,A APPE:NDX TABLE A.3 COMMERCIAL BANK CLAIMS ON DEVELOPING COUNTRIES, BY COUNTRY OF ORIGIN (CONTINUED) US$ millions United Kingdom United Stotes Country group or country 1991 1992 1993Q4 1994Q4 1994 i995Q2 1995Q3 1995Q4 All developing countries 46,495 45,689 53,300 58,214 46,669 91,972 96,548 98,479 EastAsiaand Pacific 5,956 6,066 10,100 13,075 2,541 18,343 19,583 21,627 Europe and Central Asia 9,736 9,355 10,043 10,845 6,387 8,418 8,552 8,615 LatinAmericaandtheCaribbean 17,527 18,061 21,365 21,302 34,661 58,271 61,145 60,920 Middle East and North Africa 4,203 3,425 4,205 5,209 1,775 3,004 3,450 2,782 South Asia 1,698 1,814 1,775 2,297 1,725 1,978 2,277 Sub-Saharan Africa 6,766 6,832 5,766 5,486 1,305 2,21 1 1,840 2,258 Severely indebted middle-income 17,764 17,487 20,168 20,487 23,498 46,254 48,345 48,311 Algeria 921 685 412 430 499 574 662 732 Angola 22 30 64 6/1 Argentna 2,738 2,797 3,088 3,883 9,970 10,884 11,101 1 1,311 Bolivia 6 17 49 59 91 117 121 140 Brazil 4,104 4,274 5,572 5,100 11,683 1,467 14,278 14,802 Gabon 71 47 30 .. 7 6 6 6 Bulgaria 233 191 231 89 103 47 27 73 Ecuador 514 471 474 483 593 638 767 770 Jamaica 71 76 68 95 176 158 139 137 Jordan 357 270 302 282 58 62 60 Mexico 5,6/ 1 5,943 7,012 6,895 20,099 19,076 18,374 Panama 1,D61 1,148 1,419 1,671 948 737 573 Peru 342 226 302 277 556 605 604 Poland 1,188 1,000 879 973 342 654 716 681 Syrian Arab Republic 58 42 31 I I Severely indebted low-income 2,909 2,417 2,296 2,405 299 981 889 950 Moderately indebted low-income 2,770 2,592 2,652 3,136 1,582 1,869 2,095 Moderately indebted middle-income 12,517 12,870 14,548 14,833 17,830 21,143 22,195 22,781 Selected countries 19,988 19,877 25,679 28,072 15,953 52,793 53,885 55,297 Chile 704 582 729 920 3,843 3,924 3,831 4,307 China 1,331 942 2,369 3,223 1,199 1,475 1,732 Colombia 613 647 810 1,028 2,760 2,845 3,087 3,173 C6te d'lvoire 155 162 123 172 27 31 29 Egypt 594 430 726 796 109 110 117 Hungary 299 268 226 365 321 347 381 411 India 1,164 1,207 1,162 1,507 1,243 1,467 1,615 Indonesia 1,231 1,253 2,031 2,467 2,541 2,464 2,887 2,909 Korea, Rep. of 1,842 1,827 2,281 3,357 7,538 7,554 8,120 Malaysia 605 689 1,094 1,11 1,103 1,196 1,536 Morocco 351 368 263 272 490 469 471 Nigeria 702 477 375 239 182 222 212 287 Philippines 717 761 885 702 2,703 2,787 3,018 Thailand 424 485 1,310 2,014 3,336 3,684 4,312 Turkey 1,134 1,053 1,658 1,100 1,216 1,363 1,817 1,504 Uruguay 185 227 251 333 1,322 1,315 1,21 1 Venezuela 2,241 2,466 2,476 1,746 4,586 3,697 3,628 3,121 Offshore banking centers 25,943 24,063 47,343 51,506 26,99 1 27,736 31,485 Oilexporters 10,096 9,793 10,161 9,563 7,261 7,159 7,545 6,719 DRS reporters 7,861 7,705 6,919 4,902 5,595 4,657 4,656 4,416 DRSreporters 36,183 35,850 43,765 48,532 40,463 84,738 88,556 90,659 . Not available. Note; See country c asSifications at the end of statistical appcndix. 28 F!NANC: jAt FLOWS A/ND THE DEVELOPMN;: CGOUNTRIES S "-A- IS-TFCAL A PPEN DIX TABLE A.4 MATURITIES OF BANK CLAIMS ON DEVELOPING COUNTRIES US$ millions 1995Q2 More thon Less than I yeor and less More thon Esibmoted Short-term Country group or country 1994 Totol I year thon 2 yeors 2 yeors Uncllocated short-term (% of totol) All developing countries 643,351 1,107,388 393,94 46,088 230,440 436,919 351,600 32 EastAsiaandPacific 196,488 618,547 143,959 13,541 58,850 402,197 131,627 21 Europe and Central Asia 145f746 175,228 83,051 14,737 64,211 13,229 69,946 40 LatirnAmericaandtheCaribbean 198,267 205,949 109,264 9a098 70,102 17,485 101,387 49 Middle East and North Africa 54,021 54,887 27,319 5,023 21,665 880 22,287 41 South Asia i 8,994 21,1 37 11,094 1,680 7,153 1,2 1 0 9,607 45 Sub-Saharan Africa 29,835 31,640 19,254 2,009 8,459 1,918 16,746 53 Severely indebted middle-income 213,455 222,718 1 12,743 11,033 80,683 18,259 102,998 46 Algeria 14,364 14,314 5,826 1,759 6,476 253 3,896 27 Angola 1,568 1,488 819 144 376 149 660 44 Argentina 34,343 37,639 21,509 2,160 10,651 3,319 19,822 53 Bolivia 356 405 319 2 29 55 318 79 Brazil 47,588 52,485 28,609 1,908 15,762 6,206 27,187 52 Gabon 733 644 276 80 277 11 197 31 Bulgaria 3,010 3,341 790 338 1,661 552 567 17 Ecuador 3,050 2,406 1,174 56 1,038 138 983 41 Jamaica 657 601 316 26 188 71 286 48 Jordan 1,081 1,106 666 61 277 102 601 54 Mexco 61,731 59,239 29,274 2,487 22,621 4,857 27,188 46 Panama 26,051 28,383 13,534 1,459 12,488 902 12,234 43 Peru 3,064 4,610 3,6 18 71 894 27 3,569 77 Poland 6,546 7,064 1,971 353 3,240 1,500 1,651 23 Syrian Arab Republic 467 535 354 5 171 5 346 65 Severely indebted low-income 25,125 26,369 12,369 2,048 10,652 1,300 9,671 37 Moderately indebted low-income 22,605 24,960 13,695 2,079 8,066 1,120 11,810 47 Moderately indebted middle-income 179,452 203,388 97,870 17,748 76,904 10,866 81,633 40 Selected countries5 353,271 774,874 216,268 24,428 120,703 413,475 193,417 25 Chile 1 2,2 9 11,723 6,083 887 4,575 178 5,298 45 China 4 005 429,355 17,291 3,133 17,782 391,149 14,437 3 Colombia 9,980 10,071 5,453 650 3,708 260 4,689 47 C6te d'lvo re 2,034 2,033 1,776 58 189 10 1,715 84 Egypt 3,194 3,515 2,253 347 776 139 1,906 54 Hungary 8,693 9,461 3,034 958 3,938 .531 2,062 22 India 14,202 14,766 6,955 1,31 5,616 884 5,683 38 Indonesia 34,198 40,41 1 25,269 3,082 11K013 1,047 21,929 54 Korea, Rep. of 56,459 71,403 51,439 2,719 10,801 6,444 48,549 68 Malaysia 13,460 14,721 7,275 1,360 4,710 1,376 6,436 44 Morocco 4,725 5,018 1,953 380 2,672 13 1,592 32 Nigera 3.276 3,184 1,366 363 392 63 992 31 Philipp nes 6,498 7,359 3,407 239 3,269 444 3. 168 43 Thailand 43,386 53,604 38,155 2,924 10,807 1,7 8 36,107 67 Turkey 15,472 17,519 8,320 1,665 6,136 1,398 6,695 38 Uruguay 3,491 3,853 2,607 66 1,154 26 2,555 66 Venezuela 13,100 12,196 3.092 486 6,894 1.724 2,667 22 Offshore banking centers 599,962 669,432 565,275 14,888 81,715 7,554 550,743 82 Oil exporters 125,383 134,824 62,459 12,589 56,130 3.646 51,124 38 DRS reporters 97,124 106,729 42,968 12,020 48,336 3,405 32,524 30 DRS reporters 563,091 1,013,610 357,650 37,428 200, 82 418,350 322,747 32 Note: See country classifications at the end of stat stica append x. a. Most of these countries are also included in the indebted country groups, Source: Bank for Intemational Settlements, The Motunty and Sectorai Distribubton or Intemational Bonk Lending. MAY 1 icci 29 I-STATISTICAL APPENDIX TABLE A.5 FUNDS RAISED ON INTERNATIONAL CAPITAL MARKETS UJS$ mnilhons Countrygroup or countoy i992 1993 1994 1995 1994Q3 1994Q4 1995Ql 1995Q2 1995Q3 1995Q4 All developing countries 41,562 78,257 76,144 92,458 19,614 20,072 16,920 22,900 29,048 23,589 Bonds 22,335 57,020 49,210 50,048 11,041 14,361 5,461 12,989 17,547 14,051 International 14,362 40,265 37,068 34.89 I 7,031 I 1,271 3,797 9,25!1 11,773 10,070 Foreign 7,974 16,756 12,142 15,157 4,010 3,090 1,664 3,738 5,774 3,981 Loans 19,226 21,237 26,935 42,410 8,574 5,711 11,459 9,911 11,502 9,538 International 18,981 21,040 26,840 42,326 8,479 5,711 11,459 9,911 11,417 9,538 Foreign 245 197 95 85 95 85 East Asia and Pacific 15,897 26,612 35,098 39,261 10,812 6,597 8,153 7,548 13,348 10,212 Europe ano CentralAsia 9,642 20,264 13,632 18,621 3,609 4,081 4,718 6,097 3,830 3,977 Latin America and the Caribbean 9,518 27,338 20,438 22,411 3,329 7,196 995 6,) 49 7,684 7,583 Midole East and North Africa 3,070 337 1,102 1,511 1 8 272 284 268 202 758 South Asia 201 567 1,656 2,722 594 318 053 488 98 1 200 Sub-Saharan Afr ca 1,273 102 1,864 3,674 300 1007 906 948 1,214 606 Severely indebted middle-income 8,247 22,686 18,366 19,521 3,054 6,049 700 5,96 1 6,907 5,953 Algeria Angola 325 1 2 .. 124 . .... 124 Argentina 1,529 6,473 5,7 16 6,687 819 2,572 405 1,472 2,070 2,740 Bolivia I. . 0...... Brazil 3,0OrO 6,449 4,01 1 6,235 425 2,128 158 3,1 14 1,186 1,777 Bulgaria Ecuador ... .10 ... .. .10 Gabon Jamaica Jordan ... . 50 ......50 Mexico 3,374 9,75 1 8,526 6,117 1,790 1,346 137 1,077 3,477 1,426 Panamna Peru... . 100 .. 20 Poland 9 ,. 3 299 ..3 .. 299 Syrian Arab Republic. . . ... Severely indebted low-income 116 72 557 339 ... 10 235 34 60 Moderately indebted low-income 316 657 1,674 2,780 612 3 1 8 1,053 488 981 258 Moderately indebted middle-income 13,106 24,942 18,835 24,579 5,703 6,171 3,483 7,1 33 6,599 7,364 Selected countriesa 26,863 SI 999 49,9 17 57,277 14,305 10,257 9,482 12,006 21,091 14,699 Chile 350 775 80 1,203 ... 245 377 281 300 China 4,043 6,756 8,097 6,167 2,603 1,378 1,582 501 2,266 1,8 18 Colombia .. 621 1,172 1,537 125 647 50 H0 393 984 C6te dilvoire . .. .. .. Egypt -. - 18 58 18 .... 58 Hungary 1,446 5,071 2,541 3,741 967 1,099 252 1,788 1,036 665 India 201 475 1,461 2Jr 3 594 168 644 303 966 200 Indonesia 2,641 3,726 6,, 99 7,573 2,183 j,44 1,440 2,1 35 1,895 2,104 Korea, Rep. of 5,204 7,719 7,972 14,323 2,856 1,41 3 3,296 3,068 4,402 3,557 Malaysia 1,271I 1,61 1 3,526 3,028 903 400 ,, 250 2,252 526 Morocco 60 . . 25 ... 25 Nigeria Philippines 1, I250 1,164 I1,272 342 364 .. 340 333 599 Thailano 2,718 5,550 7,910 6,504 1,925 1,897 1,836 1,254 2,166 1,248 Turkey 4,580 5,763 85! 3,296 .... 805 1,623 868 Uruguay 120 140 203 206 .. 103 ... 206 Venezuela 1,035 2,931 400 346 .. 400 ,.. . 346 Offshore banking centers 2,058 9,476 8,574 4,790 2,614 2,852 851 1,432 1,154 1,354 Oil exporters 4,445 3,503 2,8 17 3,949 190 788 168 715 1,420 1,646 DRS reporters 1,460 3,157 1,498 1,566 190 516 ,. 140 1,080 346 OECD countries 392,920 510,550 498,2 I 688,573 131,452 139,944 153,078 171,309 176,679 187,507 Multilateral nstitutcions 20.874 20,71 1 1 2,373 17,661 2,743 4,569 2,257 5,29! 5,870 4,244 Other 1,961 3,037 2,353 4,257 953 601 812 1,403 1,790 253 Total 458,275 619,986 598,005 805,718 157,429 167,961 173,124 201,356 212,881 Not available, Note: See couintry class fiations at the end of statistica appendix. a. Most of these countres are also included in tne indebted country groups. Source. OECD, Finconciol Statistics Monthly, Part 1. 30 FINANCIAL FLOWS AND THE DEVELOPING COUNTRIES STATISTICAL APPENDIX TABLE A.6 SECONDARY MARKET DEBT (BID) PRICES Percentage of face value Country group or country 1993Q3 i993Q4 1994Q1 I 994Q2 1994Q3 i 994Q4 1995Ql I1995Q2 1995Q3 1995Q4 f996Ql Severely indebted middle-income Angola 1 8 1 8 20 20 1 8 1 5 ....7 1 6 1 9 Argentina 6 1 69 52 50 SI1 4 1 40 48 47 56 52 Brazil 46 53 . 4 1 44 40 36 45 48 52 5 1 Bulgaria 26 4 1 35 25 45 45 42 50 5 1 53 50 Cameroon 1 3 1 5 23 1 6 1 7 IC . 1 3 1 4 1 6 Congo 9 9 1 3 1 3 1 3 II . 1 3 1 2 IS5 Ecuador 34 52 40 40 33 29 27 48 49 50 54 Jamaica 76 76 85 83 83 83 82 . . 76 Jordan 44 52 48 47 48 42 35 39 44 47 54 Morocco 72 8 1 64 72 72 66 58 58 63 67 69 Panama 38 6 1 54 49 59 53 .. 53 59 45 Peru 43 68 46 48 60 56 5 1 6 1 68 7 1 Poland 35 50 32 35 37 33 3 1 43 43 47 49 Uruguay 80 Other selected countries Albania 5 5 1 0 1 2 1 6 1 6 1 6 1 8 2 1 22 1 4 Algeria .. 64 48 43 46 30 28 28 .. 46 Chile 94 95 94 95 95 95 .. Costa Rica 75 82 69 66 66 66 .. S 52 54 60 C6te dlvoire 13 18 20 18 19 18 IS IS 16 16 20 Egypt 46 46 46 46 47 48 48 48 48 48 49 Honduras 31 31 34 39 36 36 .. 27 . Mexico 76 84 69 63 66 53 47 60 60 64 64 N rcaragua 10 10 9 8 8 6 ..S5 8 9 Nigeria 53 60 42 40 39 39 37 43 44 48 52 Philippines 77 82 66 63 65 59 59 73 74 74 79 Russian Feoerat.on .. 39 28 22 32 33 34 34 Senegal 32 38 34 31 36 36 .. 35 1..6 Venezuela 70 74 49 49 49 45 43 50 SI 59 56 Not ava lable, Surce: Salomon Brotners, Euroweek, Emerging Market Debt Report, Istemational Fnanoncig Review, and World Bank data. MAY 1 996 31 .^ 7 b- Tu . A P E N C X TABLE A.7 EMERGING STOCK MARKETS Market copitalization Value of stock troded Price-earnings ratio (US$ millions) (US$ millions) (percent) Economy 1995Q3 1995Q4 1996Q I 1995Q3 1995Q4 1996Q I 1995Q3 1995Q4 1996QI Argentina 32,834 37,783 37,480 1,016 813 1,158 12.3 15 16.7 Brazil 165,287 147,636 161,506 21,799 17,141 2,100 12.2 36.3 21.4 Chile 74,517 72,928 69,129 3,089 3,184 2,685 17.6 17.1 15.9 China 49,165 42,055 43,402 19,488 10,619 4,777 12.5 -18.8 0 Colombia 15,893 17,893 14,579 533 299 272 12.3 11.3 1 1.7 Greece 17,269 17,060 18,154 1,449 2,618 2,065 10.9 10.5 10.8 Hungary 1,685 2,399 3,556 136 82 309 12.6 12 28.1 India 156,468 183,329 154,392 4,363 3,538 4,309 17.7 14.2 14.7 Indonesia 53,343 66,585 74,953 3,959 4,264 6,386 20 19.8 26.7 Jamaica 1,517 22 18 .. 7.6 .. 0 Jordan 4,519 4,670 4,295 97 84 63 17.6 18.2 14.6 Korea, Rep. of 198,922 181,955 178,695 63,040 42,1 10 35,475 21.6 19.8 20.7 Malaysiaa 221,430 222,729 259,292 22,609 16,462 43,387 26.2 25.1 28.9 Mexico 101,507 90,694 102,735 9,849 8,483 1 2,811 27.7 28.4 16.8 Nigeria 1,864 2,033 2,240 3 5 6 12.1 12.5 0 Pakistan 9,798 9,286 9,792 760 765 1,813 16.5 15 14.2 Peru 10,800 1 1,795 12,385 848 1,665 1,240 17 14.5 15.6 Philippines 58,241 58,859 67,270 4,714 3,861 5,282 19.4 19 20.4 Poland 4,314 4,564 6,723 747 595 1,627 8.6 7 8.5 Portugal 16,140 18,362 18,842 1,300 911 1,584 15.8 14.8 15.1 South Africa 250,394 280,526 278,448 4,337 5,208 7,121 18.9 18.8 18.7 Sri Lanka 1,973 I,998 2,106 52 37 51 7.8 8.1 13.3 Taiwan (China) 171,181 187,206 185,541 93,830 78,909 58,704 23.4 21.4 21.6 Turkey 25,51 1 20,772 31,225 13,283 1 1,920 1 1,565 9.5 8.4 12 Venezuela 5,038 3,655 3,771 47 177 203 7.5 12 28.9 Zimoabwe 1,992 2,038 2,361 52 27 44 7.2 7.3 11.6 .. Not available, a. Data for Malays an-incorporated companies only. Source: International Finance Corporation, Emerging Stock Morkets Factbook. 32 FiNANClAL FLOWS AND THE DEVELOP NG COUONTRIES ST A rtu--F T: L ri EN I X TABLE A.8 FOREIGN DIRECT INVESTMENT FLOWS US$ millions 1986 1987 1988 1989 1990 1991 1992 1993 1994 All developing countries 9,899.3 14,107.7 20,253.4 23,933.8 25,009.0 34,978.0 46,610.0 68,261.0 80,120.0 EastAsia and Pac[fic 3,550.4 4,508.8 7.610.9 9,095.5 10,968.0 13,890.0 21,668.0 37,872.0 43,037.0 Europe and Central Asia 605.9 836.4 1,338.8 1,744.0 2,102.0 4,390.0 6,270.0 8,337.0 8,362.0 Latin America and the Caribbean 3,556.4 5,788.4 7,948.5 8,137.7 7,842.0 12,602.0 14,469.0 15,701.0 20,811.0 Middle East and North Africa 1,241.6 1,160.0 1,882.8 1,965.7 2,757.0 1,825.0 2,081.0 3,757.0 3,681.0 SouthAsia 261.7 409.6 326.3 486.9 464.0 456.0 624.0 841.0 1,242.0 Sub-Saharan Afr ca 683.3 1,404.5 1,146.1 2,504.0 876.0 1,815.0 1,498.0 1,753.0 2,987.0 Severely indebted middle incomea 2,907.6 4,991.3 7,178.4 5,808.6 5,485.0 9,759.0 12,565.0 14,285.0 18,122.0 Aiger.a 5.3 3.7 13.0 12.1 0.3 12.0 12.0 15.0 18.0 Angola 234.0 119.0 131.0 200.0 -335.0 665.0 288.0 302.0 350.0 Argentina 574.0 -19.0 1,147.0 1,028.0 1,836.0 2,439.0 4,179.0 6,305.0 1,200.0 Boivia 10.0 38.1 -10.1 -24.4 11.0 25.0 35.0 25.0 20.0 Brazil 320.0 1,225.0 2,969.0 1,267.0 989.0 1,103.0 2,061.0 1,292.0 3,072.0 Bulgaria 0.0 0.0 0.0 0.0 4.0 56.0 42.0 55.0 105.0 Ecuador 70.0 75.0 80.0 80.0 126.0 160.0 178.0 469.0 531.0 Gabon 1 10.3 89.8 132.5 -30.5 74.0 -55.0 127.0 -1 14.0 -103.0 Jamaica -4.6 53.4 -12.0 57.1 138.0 133.0 142.0 78.0 117.0 Jordan 22.8 39.5 23.7 -1.3 38.0 -12.0 41.0 -34.0 3.0 Mexico 1,523.0 3,246.0 2,594.0 3,037.0 2,549.0 4,742.0 4,393.0 4,389.0 7,978.0 Panama -62.2 56.8 -51.7 36.6 -147.0 138.0 173.0 -658.0 549.0 Peru 22.0 32.0 26.0 59.0 41.0 -7.0 145.0 371.0 2,326.0 Poland 16.0 12.0 15.0 1 1.0 89.0 291.0 678.0 1,715.0 1,875.0 Syrian Arab Republic 65.0 7.0 121.0 74.0 71.0 62.0 67.0 70.0 76.0 Severely indebted low-income 275.7 1,106.3 658.1 2,172.8 840.0 1,604.0 1,713.0 2,718.0 2,883.0 Moderately indebted low-income 1,477.1 1,280.3 1,484.1 1,754.0 1,151.0 709.0 1,021.0 1,324.0 2,499.0 Moderately indebted middle-income 2,028.3 2,447.4 3,657.9 5,296.9 5,389.0 9,124.0 9,566.0 10,512.0 11,543.0 Other selected countriesb 7,478.6 10,166.2 12,505.4 18,032.5 17,049.9 24,649.4 30,726.0 49,223.4 62,539.0 Chile 116.0 230.0 141.0 1,289.0 590.0 523.0 699.0 841.0 1,795.0 China 1,875.0 2,314.0 3,194.0 3,393.0 3,487.0 4,366.0 1 1,156.0 27,515.0 33,787.0 Colombia 674.0 319.0 203.0 576.0 500.0 457.0 790.0 850.0 950.0 C6te d'Iv&ore 70.7 87.5 51.7 18.5 48.0 16.0 -231.0 40.0 17.0 Egypt 1,217.4 947.7 1,190.0 1,250.2 734.0 253.0 459.0 493.0 1,256.0 Hungary 0.0 0.0 0.0 0.0 0.0 1,462.0 1,479.0 2,349.0 1,144.0 India 1 18.0 212.0 91.0 252.0 162.0 141.0 151.0 273.0 620.0 Indonesia 258.0 385.0 576.0 682.0 1,093.0 1,482.0 1,777.0 2,004.0 2,109.0 Korea 435.0 60 .0 871.0 758.0 788.0 1,180.0 727.0 588.0 809.0 Malaysia 488.9 422.7 719.4 1,667.9 2,333.0 3,998.0 5,183.0 5.006.0 4,348.0 Morocco 0.5 59.6 84.5 167.1 165.0 317.0 422.0 491.0 601.0 Nigeria 166.8 602.7 376.9 1,882.3 588.0 712.0 897.0 1,345.0 1,959.0 Philippines 127.0 307.0 936.0 563.0 530.0 544.0 228.0 763.0 1,000.0 Thailand 262.5 351.9 1,105.4 1,775.5 2,444.0 2,014.0 2,116.0 1,726.0 640.0 Turkey 125.0 1 15.0 354.0 663.0 684.0 810.0 844.0 636.0 608.0 Venezuela 16.0 21.0 89.0 213.0 451.0 1,916.0 629.0 372.0 764.0 Not available. Note: Table nclunes data for 154 developing countries of wh ch 137 report to the World Bank Debtor Reporting System. a. Aggregate total includes non-DRS economies. b. These countres are also included in the indebted country groups. Source: Wor d Bank Debtor Report ng System; IMF datas MAr 4 9 ' .:y. 33 -Af -Bi5TICAL A FPENDIX TABLE A.9 TOTAL EXTERNAL DEBT US$ millions Country group or country 1989 1990 1991 1992 1993 1994 1995 All developing countries 1,403,017 1,510,010 1,594,229 1,666,837 1,775,644 1,921,450 2,067,722 Long-Term 1,133,938 1,206,119 1,265,151 1,305,097 1,391,083 1,522,570 1,622,129 Official 544,097 607,202 653,905 673,754 725,568 790,751 836,537 Private 589,841 598,917 61 1,246 631,343 665,515 731,819 785,592 Short-term 237,003 269,239 290,949 323,476 344,664 354,729 384,676 IMF credit 32,076 34,652 38,129 38,264 39,897 44,151 60,917 Sub-Saharan Africa 171,236 190,260 194,779 192,781 197,886 212,416 223,298 East Asaa and the Pacific 240,329 271,651 305,233 337,122 369,205 421,329 472,837 Europe and Central Asia 236,156 262,107 283,304 302,155 335,852 356,090 379,798 Latin America and the Caribbean 454,374 476,739 490,850 505,096 531,396 562,818 607,194 Middle East and North Africa 185,951 180,812 185,469 187,694 193,672 207,669 216,971 South Asia 1 14,973 128,441 1 34,595 141,990 1 47,633 61,128 167,623 Severely indebted middle incomeb 485,039 513,662 535,627 538,759 560,108 587,376 637,588 Algeria 27,087 27,893 28,214 27,083 26,054 29,898 Angola 7,205 8,449 8,887 9,926 10,026 10,609 Argentina 65,257 62,233 65,397 68,339 70,566 77,388 Bolivia 4,136 4,278 4,076 4,223 4,220 4,749 Brazl 115,905 121,465 122,445 130,547 145,438 151,104 Bulgaria 10,137 10,890 12,055 12,231 12,325 10,468 Ecuador 1 1,318 12,109 12,468 12,280 14,110 14,955 Gabon 3,336 3,967 4,177 3,803 3,818 3,967 Jamaica 4,560 4,671 4,410 4,264 4,112 4,318 Jordan 6,503 7,297 7,792 7,179 6,905 7,051 Mexico 93,838 104,449 114,065 112,227 118,469 128,302 Panama 6,318 6,679 6,733 6,486 6,958 7,107 Peru 18,583 20,069 20,719 20,339 20,449 22,624 Poland 43,077 49,162 53,585 48,649 45,327 42,160 SyrianArabRepublic 17,389 17,068 18,942 19,017 19,976 20,557 Severelyindebted low-income 179,607 201,331 206,617 206,320 212,200 223,636 226,154 Moderately indebted low-income 160,190 163,744 169,911 176,9 12 182,526 197,636 204,043 Moderately indebted middle-income 349,351 386,764 41 ,197 448,441 476,502 506,720 537,899 Other selected countries' 481,901 520,710 558,726 597,549 648,219 716,024 776,937 Chile 18,032 19,227 17,947 19,134 20,637 22,939 China 44,933 52,751 59,779 69,509 84,178 100,536 Colombia 16,878 17,232 17,334 17,197 17,177 19,416 Egypt 43,681 32,551 33,026 31,573 31,109 33,358 Hungary 20,397 21,277 22,624 21,975 24,232 28,016 India 73,389 81,983 83,947 89,822 92, 04 98,990 Indonesa 59,394 69,955 79,778 88,296 89,477 96,500 Korea, Rep. of 32,799 34,987 39,734 44, 57 47,203 54,542 Malaysia 16,278 16,080 7,811 19,959 23,301 24,767 Nigeria 30,122 33,440 33,527 29,019 30,699 33,485 Philippines 28,722 30,615 32,456 32,997 35,927 39,302 Thailand 23,452 28,204 35,894 39,6 2 45,836 60,991 Turkey 41,447 49,238 50,747 56,451 68,800 66,332 Venezuela 32,377 33,170 34,122 37,848 37,539 36,850 Not available. Note; Table includes data for 1 51 developing countries, of which 136 report to the World Bank Debtor Reporting System. See country c assi'ications at the end of statistical appendix. a. Aggregate tota includes non-DRS econom es. b. Most of these countries are a/so included in the indebted country groups. Source: World Bank Debtor Reporting System. 34 FINANCIAL FLOWS AND THE DEVELOPING COUNTRIES FAT ' SST1CAL APPgNDIy TABLE A. IO AGGREGATE NET LONG-TERM RESOURCE FLOWS US$ millions Type offinonce 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 19951 Official development finance 36,660.7 42,651.2 43,333.1 40,022.0 40,448.3 57,898.8 65,528.6 55.007.6 53,033.5 48,613.0 64,273.7 Offcial Developmentassistance 25,515.3 29,171.6 33,378.1 34,000.9 34,671.5 46,111.2 53,700.3 45,268.9 42,395.2 47,415.1 46,992.7 Official Grants' 13,647.1 15,982.4 16,935.1 18,412.7 19,502. 29,376.6 37,538.7 31,917.5 29.389.7 32,469.4 32,856.7 Off/cial Concess. Loans 11,868.2 3,189.2 16,443.0 15,588.2 15,169.4 16,734.6 16,161.6 13,351.4 13,005.5 14,945.7 14,136.0 Bilatera 7,891.0 8,535.2 10,847.3 10.2 7.4 10,01 1.1 10,604.9 9,468.5 6,369.7 5,974.9 6,107.7 Multilateral 3,977.2 4,654.0 5,595.7 5,370.8 5,158.3 6,129.7 6,693.1 6,981.7 7,030.6 8,838.0 Offical Nonconssional Loans 11,145.4 3,479.6 9,955.0 6,021.1 5,776.8 11,787.6 11,828.3 9,738.7 10,638.3 1,197.9 17,281.0 Biateral 2,413.1 3,180.1 893.9 247.5 -357.3 2,892.7 3,687.6 4,432.2 3,404.1 -49.8 - Multilateral 8,732.3 10,299.5 9,061.1 5,773.6 6,134.1 8,894.9 8,140.7 5,306.5 7,234.2 1,247.7 Private debt flows 2 248.7 11,716.6 10,972.3 3,848.6 12,786.3 15.265.7 18,984.2 39,608.0 40,409.6 43,774.7 54,816.5 Bonds 5,380.9 607.3 279.4 2,084.7 4,464.3 2,960.0 12.832.9 13.177.4 38,341.3 32,163.6 Commercial Banks 8,261.7 3,880.5 3,964.0 8,855.4 697.9 1,721.0 2,474.5 13.757.4 -4.865.5 9,166.9 Other private 7,606.1 7,228.8 6,728.9 2,908.5 7,624.1 10,584.7 3,676.8 12,673.2 6,933.8 2,444.2 Foreign DirectInvestment 11,337.4 9,899.3 14,107.7 20,253.4 23,933.8 25,009.0 34,978.0 46,610.0 68,261.0 80,120.0 90,346.0 Portfolio equity flows 138.0 606.0 682.0 1,061.0 3,372.3 3,742.6 7,552.2 4,056.8 45,615.6 34,894.2 22,000.5 Aggregate netresourceflow 69,384.8 64,873.1 69,095.1 75,185.0 80,540.7 101,916.1 127,043.0 155,282.4 207,319.7 207,401.9 231,436.7 Aggregate nettransfers 27.8 -2,052.3 742.4 -1,476.1 4,834.7 26,581.4 51,022.1 78,91 1.3 130,140.2 120,792.4 126,323.6 Memo Item: Private grants 2,900.0 3,300.0 4,000.0 4,300.0 4,000.0 5,100.0 5,400.0 5,900.0 6,300.1 7,000.1 6,600.0 Net use of lMF creditc -155.0 -3,271.5 -6.041.2 4,990.4 -2,329.5 55.3 3,150.4 1,151.8 1,639.8 1,573.3 15,569.0 Real aggregate netresourcefows 90,699.1 82,014.0 80,063.8 82,079.7 86,789.5 104,102.2 129,900.8 56,377.1 216,635.0 207,401.9 0.0 Import price index 76.5 79.1 86.3 91.6 92.8 97.9 97.8 99.3 95.7 100.0 0.0 ,. Not available. a. Preliminary. b Excludes technical cooperation. c. Includes IMF Trust Fund and Enhanced Structural Adjustment Facility. Source. World Bank Debtor Reporting System; OECD; data on foreign d rect investment are from the IMF and World Bank staff. MAY 1996 35 COUNTRY GROUPS East Asia and Pacific Former Yugoslavia* Colombia* Iraqc- Ethiopia* American Samoa Georgia* Costa Rica* Jordan* Gabon* Cambodia* Gibraltar** Cuba** Libya** Gamb a, The* China* Greece** Dominica* Morocco* Ghana* Fiji* Hungary* Dominican Republic* Oman* Guinea* Guam Isle of Man Ecuador* Saudi Arabia** Guinea-Bissau* Indonesia* Kazakstan* El Salvador* Syrian Arab Republic* Kenya* Kiribati** Kyrgyz Republic* French Guiana Tunisia* Lesotho* Korea, D.P.R. of** Latvia* Grenada* Yemen* Madagascar* Korea, Rep, of. Lithuania* Guadeloupe Malawi* Lao P.D.R.* Macedonia FYR* Guatemala* South Asia Mal* Malaysia' Malta* Guyana* Afghanistan** Mauritania* Marshall Islands Moldova' Haiti* Bangladesh* Mauritius* Micronesia Poland* Honduras* Bhutan* Mayotte Mongolia' Portugal* Jamaica* India* Mozambique* Myanmar* Romania* Martinique Maldives* Namibia** New Caledonia** Russian Federation* Mexico* Nepal* Niger* Papua New Guinea* Slovak Republic* Nicaragua* Pakistan* Nigeria* Philippines* Slovenia* Paraguay* SriLanka* Reunion Solomon Islands* Tajikistan* Peru* Sub-Saharan Africa Rwanda* Thailand* Turkey* Puerto Rico Angola* Sao Tome and Principe* Tonga* Turkmenistan* St. Kitts and Nevis* Benin' Senegal* Vietnam* Ukraine* St. Lucia* Botswana* Seychelles* Western Samoa* Uzbekistan* St. Vincent* Burkina Faso* Sierra Leone* Europe and Latin America and Trinidad and Tobago Cameroon * Soma ia* Central Asia the Caribbean Uruguiaay* Camerde* Sudan* Albania* Antigua and Barbuda Venezuela* Cape Verde* Sudan' Azerbaijan' Argentina* Central Ar can Republic' Swaziand* Belarus* Aruba Middle East Chad* Tanzania Bulgaria* Belize* and North Africa Comoros* Togo* Croatia* Bolivia* Algeria* Congo* Uganda* Czech Republic* Brazil* Egypt, Arab Rep. of* C6te dIvoire* Zaire* Estonia* Chile* Iran, Islamic Rep. of' t Zambia* Equatorial Guinea* Zimbabwe* Severely indebted Syrian Arab Republic L beria Zambia Moderately indebted middle-income Madagascar middle-income countries',b Severely indebted low- Mali Moderately indebted countries' Algeria income countries5 Mauritania low-income countriesa Cape Verde Angola Afghanistan** Mozambique Albania Chile Argentina Burundi Myanmar Bangladesh Colombia Bolivia Cambodia Nicaragua Benin Dominican Republic Brazil Cameroon Niger Chad Greece** Bulgana Central African Republic Nigeria Comoros Hungary Cuba** Congo Rwanda Egypt, Arab Rep. of Indonesia Ecuador C6te d'lvoire Sdo Tome and Principe Gambia, The Morocco Gabon Equatorial Guinea Sierra Leone Haiti Papua New Guinea Iraq.* Ethiopia Somalia India Philippines Jamaica Ghana Sudan Lao P.D.R. Russian Federation jordan Guinea Tanzania Malawi Tunisia Mexico Guinea-Bissau Uganda Nepal Turkey Panama Guyana Vietnam Pakistan Venezuela Peru Honduras Yemen Senegal Western Samoa Poland Kenya Zaire Zimbabwe Offshore banking Cayman Islands Singapore Brunei Nigeria* centers' Hong Kong Vanuatu* Congo* Oman* Bahamas Lebanon* Former Soviet Union* Qatar Bahrain** Liberia* Oil exporters Gabon* Saudi Arabia** Barbados* Macao Algeria* Iran, Islamic Rep. of* Trinidad and Tobago* Bermuda Netherlands Antilles Angola* Iraq** Un ted Arab Emirates Panama* Bahrain** Libya** Venezuela* * DRS reporter. ** Non-DRS economy. The remaining countries include selected high-income and non-OECD m dd e-income countries. The Debtor Reporting System (DRS), set up in 1951 to monitor statistics on the external debt of developing countries, is maintained by the staff of the Intemational F nance D vision of the World Bank's Intemational Economics Department. The World Bank is the sole repository for these statistics on a loan-by-loan basis. Notes Country group composition has been modified to refect the annual updating of GNP per capita and related debt indicators. a. All countr es in the group are DRS reporters, except those for which it is otherwise indicated. b. Indebtedness criteria are consistent with those appearing in the World Debt Tobles 1996. c. Offshore banking centers are not included in any other country group except for oil exporters. 36 FjNAN'GAj FioŽws AND TFIE DEvELLPlNc. CGOUNTRiES New reports from the World Bank World Debt Tables 1996: External | 1 ns Finance for Developing Countries I ________ World Debt Tables 1996, Vol 1, Analysis and Summary Tables. This new edition of the World Bank's invaluable reference US24.9510rder No. 13300 guide provides complete and up-to-date information on the exter- W D nal debt of and financial flows to developing countries. 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An important message I I of this annual edition of Global Economic Prospects is that there is Charge my: hope for those lagging behind-country experiences worldwide l show that there are numerous policy actions that governments can l__ VISA MasterCard American Express adopt to overcome obstacles to liberalization, and that the road to liberalization, though arduous, is well trodden. I Credit CardAccount Number Expiration Date The pace of global economic integration has accelerated over the past decade. During 1985-94 the ratio of world trade to GDP l_l rose three times faster than in the preceding 10 years and nearly Signature twice as fast as in the 1960s. Over the same period foreign direct Name: investment (FDI) doubled as a share of global GDP. The share of l FDI going to developing countries rose to more than one-third, l Company: but the ratio of trade to GDP fell in nearly half the developing I Address:__ countries over those 10 years. The distribution of FDI was also skewed: just eight developing countries garnered two-thirds of FDI in 1990-93, while half of all developing countries received i City/State/Postal Code:__ little or no inflows. I Country: i The causes and implications of lagging integration and the policies that countries can adopt to become fuller participants in , B l u Bill my organization. Institutional customers in the US only. PleaseI the world economy are examined in this year's report: l include a purchase order. * A review of prospects for the world economy suggests that the next 10 years are likely to see an acceleration of interna- N i tional integration * Disparities in the speed of integration, as measured by indi- l Company: cators such as changes in the trade and FDI to GDP ratios, have been closely associated with differences in growth idl rates. The report also address two questions often asked by policy- City/State/Zip Code: _ makers in countries trying to promote integration: Will trade lib- 1215 l eralization work? Can commodity-reliant countries integrate, and L----------------- …---------------------… if so, how? Global Economic Prospects 1996 shows that developing coun- tries that are integrating quickly offer many practical lessons on Cut out fonn above and mail to: how countries can expand their engagement with the world econ- P0 Box 7247-8619 omy to enhance growth. Countries that are lagging behind face a Philadelphia, PA 19170-8619 favorable external environment for reforms, which will play a USA large role in furthering integration. Managing the transition toward increased integration will be a difficult but critical To have your order shipped faster, call 202-473-1155 to charge by credit challenge. card, or send this completed order coupon by facsimile to 202-522-2627. Note: If you are paying by check or credit card, shipping and handling charges are US$5.00 per order. For air mail delivery outside North America Stock No. 13285 US$12.95 add US$8.00 for one item plus US$6.00 for each additional item. Prices may vary by country and are subject to change without notice. IfT TV M,: I lSII I' . I World Bank quarterlies Commodity Markets and ther J Yes, please enter mny subscription for the Developing Countries . .. D World Bank quarterlies, as indicated Not just the facts, unbiased analyses. The World Bank isn't in the business of selling commodities. As an international lender putting l Commodity Markets and the Developing Countries millions of dollars at risk every day, we demand objectivity regard- US$1501year ing the commodities markets that play such an important role in I Financial Flows and the Developing Countries developing countries. That is why you get unbiased forecasts that US$150/year are based on our own research. Four times a year World Bank commodity experts examine pro- " Enclosed is my check for US$ drawn on a US bank and duction, consumption, and factors from climate to exchange rates payable to the World Bank in US dollars. For payment in local currency, to give you the intelligence you need to make better decisions. please ask for the distributor in your area. Only Commodity Markets covers such a wide range of the i world's commodities-28 in all-with substantive yet succinct re- Charge my: ports on: I VISA MasterCard American Express * Foods: bananas, beef, citrus, shrimp, sugar; cocoa, coffee, tea; coconut oil, palm oil, soybean oil; maize, rice, wheat i * Agricultural raw materials: cotton, jute, rubber, timber l Credit Card Account Number Expiration Date * Metals and minerals: aluminum, copper, gold, iron ore and i steel, steel~ Signaturei * Energy resources: coal, petroleum Snu * Fertilizers: potassium chloride, TSP, urea Name: l Issued February, May, August, and November. Approximately 40 pages/lISSN 1020-0967 i C Address:__ Financial Flows and the D City/State/Postal Code:__ l)eveloping Countries i The most comprehensive source on the subject is also the only Country: _ source that brings you the dependable data and authoritative anal- i yses used by senior executives at the World Bank. B Bill my organization. Institutional customers in the US only. Please I Four times a year World Bank experts analyze the data from over include a purchase order. 140 developing countries, including exclusive information reported by members under our Debtor Reporting System. Name: l Only Financial Flows covers the entire developing world, not just the top emerging markets. It's organized in seven sections for Company: easy reference: i Address:__ X International lending and capital markets i Equity portfolio and foreign direct investment -i _Secondary mparkets for developing-country debt City/State/Zip Code: i * Bilateral and multilateral official capital flows Country i * Debt relief update lul * Commercial bank provisioning and capital adequacy , FQ56 • Special financial brief Financial Flows gives you a wealth of statistical information as well. A statistical appendix includes tables with invaluable time- Cut out form above and mail to: series data on external debt, foreign direct investment, commercial The World Bank bank claims on developing countries, secondary market price of de- PO Box 7247-7956 veloping-country debt, funds and loans raised on international cap- USA ital markets, and more. Issued February, May, August, and November. To have your order shipped faster, call 201-476-2192 to charge by credit 36 pages/lISSN 1020-0975 card, or send this completed order coupon by facsimile to 201-476-2197. ==s~~~~~~~~~~ __aei a .. FINANCIAL FLOWS AND THE DEVELOPING COUNTRIES A WORLD BANK QUARTERLY Financial Flows and the Developing Countries is produced by the International Finance Division of the International Economics Department of the World Bank. For information about the contents, call Sheilah King-Watson, 202473-3730, or fax 202-522-3277. The opinions expressed are those of the authors and should not be attributed in any manner to the World Bank, to its Board of Executive Directors, or to the countries they represent. It is published quarterly in February, May, August, and November. The annual subscription rate is $150.00. Send subscription orders to World Bank Publications, Box 7247-7956, Philadelphia, PA 19170- 7956, USA, telephone 201-476-2192. i) 1996 The International Bank for Reconstruction and Development/The World Bank 1818 H Street, NW, Washington, DC 20433, USA All rights reserved Manufactured in the United States of America Vol. 3, no. 3 Sectoral Library, ISSN 1020-0975 N 145 ISBN 0-8213-3640-1 W Printed on recycled paper.