21982 Vol. 2 No.4 -iF.iNANCI.AL,':i F ..FLows5. ANDTHE, DEVELOPING- COUNTRIES-:-i IL A WORLD BANK QUARTERLY -mi:t' r y CONTENTS AND SUMMARY INTERNATIONAL LENDING Korea, and the Philippines, while Moody's AND CAPITAL MARKETS placed Argentina, Colombia, and the Czech Republic on review for possible upgrade. U DEVELOPING-COUNTRY BORROWING PAGE 4 Developing countries raised $17.0 billion in EQuITY PORTFOLIO AND bonds and loans in the first quarter of 1995, FOR EI G N DIRECT INVESTMENT down from the fourth quarter of 1994 and much less than in the first quarter a year ago. * EMERGING STOCK MARKETS PAGE 9 Bank credit volume increased over the pre- In the second quarter emerging markets re- ceding quarter, while bond volume fell covered from the effects of the Mexican de- sharply in both absolute and percentage valuation, and the IFC's dollar-based terms. The second quarter saw the return of composite index rose 5%. Latin American Latin American and European issuers. markets were up 18%, while Asian markets were a mere 1% higher. Markets in Indone- * GLOBAL BORROWING PAGE 5 sia and Thailand rose 15% for the second According to the OECD, $258 billion was straight quarter, and the Turkish market raised in international capital markets in the continued its upward trend. first quarter of 1995, down 2% on the last quarter. Bond offerings began the year U NEW EQUITIES AND strongly but faltered toward the quarter's end. DERIVATIVES PAGE 11 Banks dominated bond issues, and the In the first quarter net sales of developing- deutsche mark was a favored currency. New country equities by US investors were $332 syndicated lending remained strong at $69 bil- million, compared with $2 billion in the pre- lion. For the first four months of 1995 spreads ceding quarter. Virtually all of the net sales for OECD borrowers were much lower than were Latin American stocks, half of them a year earlier, but spreads for developing- Mexican shares. International equity issues country borrowers rose to 127 basis points. by emerging-market firms amounted to $3.8 billion, half coming from Asia. I COMMERCIAL BANK CLAIMS PAGE 7 In the fourth quarter of 1994 net interna- I FOREIGN DIRECT INVESTMENT tional bank credit rose by $25 billion, while AND PRIVATIZATION PAGE 13 cross-border claims of BIS-reporting banks US firms increased their investment in Latin were $195 billion higher, up $263 billion for America to $1.9 billion in the first quarter, ac- the year. Claims on developing countries cording to KPMG Peat Marwick. In privatiza- rose by $15 billion. Developing-country de- tion financing in the second quarter, more posits continued their strong growth, in- use was made of depository receipts, designed creasing by $24 billion. to attract international investors. Chinese cor- porations were the first to issue such securi- * MARKET CREDITWORTHINESS PAGE 8 ties, withJilin Chemical raising $1.9 billion. Among second-quarter upgrades for devel- oping countries, Moody's assigned Poland a Baa3 rating, the first investment grade given SECONDARY MARKETS a country that has undertaken Brady-style FOR DEVELOPING- debt reduction. Slovakia was also assigned a COUNTRY DEBT PAGE 15 Baa3 rating, and its Standard & Poors rating was upgraded to BB+. Upgraded as well were In the second quarter markets in developing- Brazil, Chile, Indonesia, the Republic of country debt shrugged off the effects of the 2 FINANCIAL FLOWS AND THE DEVELOPING COUNTRIES CONTENTS AND SUMMARY Mexican devaluation, helped by falling US COMMERCIAL BANK Treasury yields. Vneshekonombank debt PROVISIONING AND prices rose sharply, anticipating Russia's CAPITAL ADEQUACY PAGE 18 i rescheduling agreement at the Paris Club. Debt trading volume in 1994 reached a Capital adequacy ratios declined slightly - i f record $2.8 trillion, up 40% on 1993. for Japanese banks at the end of the first quarter. ,i I' OFFICIAL FLOWS: MULTILATERAL AND BILATERAL FINANCIAL BRIEF: EAST ASIA'S BOND MARKETS SET * MULTILATERAL FLOWS PAGE 15 TO EXPLODE PAGE 18 In the second quarter the IDB approved a $1.25 billion loan package for Mexico, and East Asian growth has averaged 7.8% over the World Bank a $1.5 billion package. Both the past 15 years. Provided reform measures are aimed at strengthening the banking sys- stay on track, says a recent World Bank tem and financing social programs. MIGA is- study, rapid expansion of bond markets is sued its first guarantee contract in Viet Nam, likely. covering an investment by Citibank. - BILATERAL ODA AND STATISTICAL APPENDIX EXPORT CREDITS PAGE 16 Worldwide aid to GNP ratios dropped to * BANK AND TRADE-RELATED 0.29%, the lowest level in more than 20 years. NONBANK CLAIMS PAGE 21 In absolute terms,Japan led with $13.4 in aid * COMMERCIAL BANK CLAIMS X,, tS disbursements. The EXIM Bank ofJapan an- ON DEVELOPING COUNTRIES PAGE22 nounced that it will resume direct export and overseas investment loans to Brazil, sus- * COMMERCIAL BANK CLAIMS pended since September 1992. ON DEVELOPING COUNTRIES, BY COUNTRY OF ORIGIN PAGE23 DEBT RELIEF UPDATE * MATURITIES OF BANK CLAIMS ON DEVELOPING COUNTRIES PAGE 27 * OFFICIAL CREDITORS PAGE 17 * FUNDS RAISED ON In the second quarter the Paris Club con- INTERNATIONAL CAPITAL MARKETS PAGE 28 cluded three agreements on Naples terms (Haiti, Mauritania, and Senegal). Russia * SECONDARY MARKET DEBT reached its third rescheduling agreement (BID) PRICES PAGE 29 with the Paris Club, covering $6.4 billion of debt with a 12-month consolidation period. * FDI FLOWS PAGE 31 * COMMERCIAL CREDITORS PAGE 17 In May 1995 Albania and Panama reached * COUNTRY GROUPS PAGE 32 agreements in principle with their commer- cial bank creditors on Brady-style debt re- duction packages. Sierra Leone completed Tables on external debt and aggregate long-term the first phase of its buyback of commercial resource flows are published only as data are bank debt, financed through IDA. updated, usually once a year in February. AUGUST 1 995 3 INTERNATIONAL LENDING AND CAPITAL MARKETS DEVELOPING-COUNTRY TABLE 2 BORROWING BOND ISSUES BY TYPE OF BORROWER U DEVELOPING COUNTRIES RAISE LESS IN US$ millions MEDIUM- AND LONG-TERM DEBT 1993 /994 Qi Q2 According to the Organization for Eco- Al developing countries 55,201 50,129 5,565 1 1,318 nomic Cooperation and Development Pnvcte 18,304 21,010 2,125 4,247 Sub-Saharan Africa 0 75 0 0 (OECD), developing countries raised $17 East Asia and Pacific 4,547 8,604 1,617 2,148 billion on international loan and bond mar- South Asia 556 636 0 0 Europe and Central Asia 354 1,598 471 54 kets in the first quarter of 1995, down 15% Latin Amercaand Caribbean 13,845 10,097 37 2,045 on the previous quarter (table A5). Bank Middle East and North Afrca 0 0 0 0 credit volume increased, accounting for Sovereign 19,904 17,156 1,447 5,049 Su b-Saharan Africa 0 1,520 0 346 68% of the $17 billion. Bond volume fell East Asia and Pacfic 907 2,399 0 0 sharply (table 1). With the exception of the South Asa 0 150 0 0 Europe and Central As a 15,115 9,115 973 2,608 Republic of Korea, which raised 71% of its Latin America and Caribbean 3,882 3,572 223 1,922 total debt in the bond market, many East Middle East and North Africa 0 400 251 174 and South Asian borrowers relied on loan Other public 5,994 11,963 1,992 2,022 Sub-Saharan Afr ca 0 0 0 0 financing and raised $8.7 billion through EastAsia and Pacific 8,1 56 6,599 1,273 ,414 debt. The same was true for Latin American South Asia 0 300 0 0 where total debt financing ~~~~Europe and Central Asia 928 1,062 582 countries, where total debt financing Lat n America and Caribbean 6,9 0 4,003 137 608 dropped by 8.6% to $1.0 billion in the first Middie East and North Africa 0 0 0 0 quarter. Source: Eurorroney Bondware and World Bank * BOND ISSUES UP 2), although that was still 15% down on the Market conditions improved for developing- fourth quarter of 1994. The increase re- country borrowers in the second quarter, flects largely the return of Latin American and bond volume doubled from a de- and European issuers to the market. Bor- pressed first quarter to $11.3 billion (table rowers that had postponed bond issues finally entered the market. Sovereign bor- rowers raised $5.1 billion, more than a TABLE I INTERNATIONAL BORROWING BY SELECTED DEVELOPING twofold increase on the previous quarter. COUNTRIES Private issues, at $4.3 billion, almost dou- 1U5$ millions 1993 1994 1994Q4 1995Q1 bled, while other public borrowings re- Totol Bonds Toto/ Bonds Totos Bonds Totol Bonds mained at about $2 billion. Led by Brazil Argentina 6,473.2 6,097.2 5,715.8 4,587.9 2,572.3 1,937.8 405.D 0 ($1.4 billion), private issues from Latin Brazi 6,449.4 6,120.4 4,01 1.4 3,960.0 2,128.1 2,128.1 158.D 158.0 America rebounded sharply (to $2.1 bil- Chile 774.6 432.6 80.0 0 0 0 245.9 75.0 China 6,756.0 2,956.8 8,157.2 3,802.5 1,378.2 665.6 1,581.6 173.6 lion), comparedwith $37 millionin the pre- Czech Republic' 902.6 702.6 637.9 400.0 325.0 150.0 250.9 0 vious quarter. Latin American sovereign Hungary 5,070.7 4,808.5 2,541. I 1,721.0 1,099.4 804.4 252.3 252.3 India 475.0 445.0 1,461.4 863.4 168.0 0 644.9 0 and other public bond volume increased Indonesia 3,726.0 1,725.9 6,223.7 2,194.0 1,126.0 250.0 1,439.5 40.0 substantially, but again from a low level. Korea, Rep. of 7,7 8.8 5,646.2 7,908.4 3,424.0 1,413.2 1,120.3 3,231.3 2,312.2 . . , Malaysia 1,61 1.1 0 4, 26.0 1,615.0 400.0 400.0 D 0 Brazil tapped the market for $1.1 bllion, Mexico 9,751.5 9,351.4 8,525.5 6,515.6 1,345.5 1,345.6 137.0 137.0 Argentina for $1.6 billion, and Mexico for Pakistan 92.3 92.3 195.0 195.0 150.0 150.0 409.2 0 . . Poland 0 0 2.8 0 2.8 0 0 0 $484 mllion. Asian bond volume was up Thailand 5,550.4 2,166.5 8,060.2 3,327.7 1,897.2 5 5.9 1,781.0 00.0 23%. The biggest borrower was the Repub- Turkey 5,762.7 3,858.8 960.9 719.8 0 0 0 0 lco oe $. ilo) olwdb hi Venezuela 2,93 1.3 2,1429 400.0 0 400.0 0 0 0 licofKorea ($2.7billion),followedbyThai- Zimbabwe 90.0 0 0 0 0 0 0 0 land ($620 million). Elsewhere, sovereign Note: Bonds include both intemational issues (euromarkets) and traditional foreign issues. borrowing by Hungary reached $ 1.1 billion, a. Data before April 1 993 refer to Czechoslovakia. Source: OECD, Fincncial Statistics (month y), May 1995. and by South Africa $346 million. 4 FINANCIAL FLOWS AND THE DEVELOPING COUNTRIES INTERNATIONAL LENDING AND CAPITAL MARKETS * BOND ISSUERS OFFER SHORTER MATURITIES AND HIGHER SPREADS FIGURE I BOND ISSUES FROM DEVELOPING Investors remained cautious in the second COUNTRIES, BY MATURITY quarter of 1995, and the primary issues saw US$ bilions shorter maturities and generous spreads, 50.1 particularly for Latin American borrowers. U Over 15 years Average spreads on Brazilian issues - 11-5 years reached 429 basis points on US dollar- L 6-10 years denominated bonds. Investors favored _ 1-5 years short-dated securities: 69% of second-quar- ter issues had maturities of five years or less (figure 1). Average size (at $140 million) 11.3 was higher than in the previous quarter, with 25 percent of bond issues exceeding $150 million. 1994 1995Q1 1995Q2 As expectations of lower US interest rates Source: Euromoney Bondware and Word Bank. surfaced, investors leaned toward fixed-rate issues. These instruments gained in market FIGURE 2 share, accounting for 66% of all bonds, com- BOND ISSUES FROM DEVELOPING pared with 58% in the first quarter (figure 2). COUNTRIES, BY TYPE US5$ billions Floating-rate notes lost market share-down from 38% in the first quarter to 30% in the 50 I second quarter. Convertible bond issues lost .. market share, accounting for just 3% of all U Floting-rate bond issues. llZ Convertible _ Fixed-rate GLOBAL BORROWING 113 5.5 * LOWER BOND BORROWING IN CAPITAL MARKETS 1994 1995Q I 1995Q2 According to the OECD, $257.8 billion was Suroe. EuromoneyBondwareandWorldBank, raised on world capital markets in the first quarter of 1995, down 2% on the fourth TABLE 3 quarter of 1994 (table 3) but up 15% over a INTERNATIONAL CAPITAL MARKET year ago. Bond issues fell 6% over the previ- FLOWS ous quarter, to $103.5 billion. Offerings of U5$ bllions Instrument 1993 1994 1994Q4 1995QI bonds began the year on a positive note, with --- Bonds 481,0 426.9 1 10.3 103.5 almost half of the issues coming in January. Equity 40.7 44.9 9.7 4.7 The market lost momentum in March and Syndicated loans 136.7 202.7 56.4 68.7 NlIF' and other April, however, as institutional investors bark-up facilities 8.2 4.9 1.2 0.7 shied away from dollar eurobonds (as the ECPI and other non- dollar weakened) and borrowers found underwritten facilities 152.0 274.0 96.0 80.2 more favorable pricing in the syndicated- Total 818.6 953.4 273.6 257.8 loan market. Flows to developing countriesc (percent) 9.2 9.4 Bank issues remained strong (figure 3). --- a. Note issuance facilities. Banks will likely continue to be an important b. Eurocommercial paper. c. Including Eastern European countries. source of new issues, since they still face Source OECD, Frnncial Market Trends. AUGUST 1995 5 INTERNATIONAL LENDING AND CAPITAL MARKETS market volatility, shorter-term securities also FIGURE 3 SECTORAL BREAKDOWN OF gained i popularity. Issues of medium-term DEVELOPING-COUNTRY BOND ISSUES, euronotes increased by almost 50% over the 1 995Q2 first quarter a year ago. Other 7% Goverrment 42M'0_ anufctunng 9% * NEW SYNDICATED LENDING REMAINS ininggOil 2% STRONG In the first quarter of 1995 gross new syndi- cated loans were $68.7 billion, the same as in Banking/Finance 41% the previous quarter but more than double the first three months of 1994. The share of Note: 'Otne ,nc udes tiIties agcricirre, construction. transpoation. syndicated loans in total financing was 66%, and other ser ces. Source: Euromoney Bondware wid Word Bank. more than double the share in the preceding quarter. Intense competition among lenders regulatory and other pressures to raise long- and falling spreads attracted many large bor- term capital. Offerings by nonbank financial rowers (sovereign borrowers in particular) institutions, especially US mortgage credit who had tended to use the international agencies, also increased, but offerings by pri- bond market. Banks' willingness to provide vate nonfinancial corporations fell. So did is- such favorable terms reflects their desire to FIGURE 4 sues by central and regional governments. have a presence in high-profile sovereign CURRENCY rgoa aehg-rfl og COMPOSITION OF Latin American borrowers were almost ab- loans. Another push to the syndicated loan BOND ISSUES, sent from the international bond markets as market came from the increase in mergers 1 995Q2 the Mexican currency crisis put a damper on and acquisitions, which generally require im- East and South Asia emerging markets' borrowing. Meanwhile, mediate financing. ($3.6 billion) Asian borrowers switched to syndicated US borrowers maintained their large 2% Others 5% loans. presence in the market, followed by UK bor- The currency composition of interna- rowers. Latin American and Asian borrow- / 7>0 0 t0Sr tional and foreign bond offerings changed ers were also apparent but with a high Yen during the second quarter (figure 4). Offer- degree of concentration. Argentina and the (15 f% - \/ ings in deutsche marks increased sharply, Republic of Korea accounted for most of stimulated by the strength of the currency the loans. Latin America ($4.6 billion) and lower rates. US dollar-denominated Competition among lenders and the re- Lir/e bonds fell because of the weakness of the dol- turn of blue chip brought about a sharp de- 2% Yen lar. Issues of international bonds denomi- cline in average spreads. OECD data show 2l% nated in yen also fell, while foreign bonds average spreads for the first four months of issued in Tokyo increased. 1995 at 44 basis points, compared with 81 USdoikjrsfa000X) Straight bond issues have now reestab- basis pointsa year ago. The benefits of lower lished their market share to 80% of all exter- spreads went mainly to OECD borrowers. Europe and Central nal bond offerings. As floating-rate issues Spreads on loans to developing-country bor- Asia ($2.7 billion) DM declined, fixed-rate notes gained in market rowers increased to 127 basis points, com- share. This shift reflects greater investor con- pared with 96 basis points the year before. Frnrcs Yen tl;fidence that interest rates had all but peaked Spreads on loans to Central and Eastern Eu- 4596:<< ;0:[\ 20o6% with growth slowing in the US. Moreover, in ropean countries stayed below those on both Germany andJapan the strength of the loans to other middle- and low-income coun- Others 6% US doiars currency reduced inflation worries and in- tries. Average maturities were a bit higher at cd% creased pressure for cuts in short-term inter- 5 years and 10 months from 5 years and 9 'ou,ce: Euromoney Bandware and Wore Bank. est rates. Partly because of recent bond months. 6 FINANCIAL FLOWS AND THE DEVELOPING COUNTRIES INTERNATIONAL LENDING AND CAPITAL MARKETS COMMERCIAL BANK CLAIMS Eastern Europe and the former Soviet Union) increased by $15.4 billion in the U BIS BANKS' CROSS-BORDER CLAIMS AND fourth quarter of 1994, following a (revised) NET CREDIT CONTINUE TO CLIMB $3.8 billion increase in the third quarter. Cross-border and local foreign currency Lending to Asia's (mainly high-growth) de- claims of BIS reporting banks rose by $194.7 veloping countries surged by $18.6 billion billion in the fourth quarter of 1994 and by despite measures by some governments to $263.2 billion for the year. This was due curb inflows. Credits to the Republic of mainly to the increase in interbank activity in Korea rose by $6.1 billion, while claims on Europe, which was primarily dollar-denomi- Thailand continued upward, increasing by nated, and was probably connected with end- $5.7 billion, following an increase of $4.4 bil- of-year window-dressing operations of banks lion in the third quarter. The upsurge in in European financial centers. New deposits cross-border interbank credit to Thailand is from private nonbank and official customers due mainly to the success of the Bangkok In- fell, reflecting some shift of investment flows ternational Banking Facility, established in back to securities. This contributed to a weak- 1993. Lending to Indonesia increased by ening of net international banking interme- $2.5 billion, and claims on China increased diation, with the disappearance of reporting by $2.3 billion. BIS banks' claims on the banks' absorption of international funds for Philippines increased by $283 million, after domestic onlending. Net international bank falling in the previous two quarters. Credits credit (or new lending) increased, albeit at a to Malaysia continued to fall (down by $825 lower level, by $25 billion in the fourth quar- million) because of measures taken by local ter following a $75 billion increase in the authorities to stem inflows. third quarter. New lending by banks in Ger- The increase in claims on Latin America many,Japan, and the United States, however, ($3.8 billion) masks wide country-to-country declined. The dominant factor for Germany variations. Claims on Brazil fell by $1.8 bil- was Euromarket arbitrage between short- lion in the last quarter of 1994, probably due term DM funding and purchases of long- to the implementation of its debt reduction term securities issued by German banks, and package, coupled with new measures to stem for the US, the turnaround of foreign official inflows. The drop in claims on Venezuela deposits. ($936 million lower) is likely due to the International claims of German banks in- domestic banking crisis. Reported medium- creased by $28.2 billion, reflecting the use of and long-term claims on Argentina and Mex- financial centers to channel funds to and ico increased, but the reports do not fully re- from Germany. Claims on Italian and Span- flect changes in the quarter, particularly the ish banks increased by $9.5 billion and $7 bil- nonrenewal of some short-term interbank lion, respectively, after declining in the claims toward year-end. Reporting banks' previous three quarters. In the United States claims on Mexico increased by $3.1 billion, banks saw a small decline (of $300 million) on Argentina by $1.5 billion, and on Chile by in claims. Claims for Japanese banks rose $1.4 billion. $10.5 billion, compared with $10.3 billion in BIS banks' claims on Eastern Europe and the previous quarter. the former Soviet Union continued to con- tract. They fell $6.4 billion, mainly attributed * BIS BANKS' EXPOSURE IN DEVELOPING to the transfers of guaranteed loans to offi- COUNTRIES UP SHARPLY cial agencies (the former Soviet Union) and BIS banks' outstanding claims (not adjusted to the implementation of the debt reduction for exchange rate changes and including agreements (Poland, for example). Claims AUGUST 1995 7 INTERNATIONAL LENDING AND CAPITAL MARKETS on Poland fell by $4 billion and on Russia by countries (table 4). Another 17% went to Eu- $2 billion. Lending to the Middle East recov- rope and Central Asia, while Latin American ered somewhat: a $500 million increase re- countries accounted for only 7%. Roughly flected mainly new debt for Saudi Arabia and 64% of the funds went to infrastructure pro- United Arab Emirates. jects, with power projects taking more than Deposits increased $23.5 billion. Deposits half of all commitments. by Latin American residents rose a record The biggest syndicated loan (almost $1.9 $10.7 billion, with Brazil accounting for $5 billion) went to PT Paiton Energy Corpora- billion, and Mexico for $1.7 billion, indicat- tion of Indonesia. The project company ing some resumption of private capital out- sponsors include US-based Mission Energy, flows. From Chile and Argentina, deposits GE Capital Corporation,Japan's Mutsui, and increased $1.4 billion and $1.2 billion, re- PT Batu Hitam Perkasa. The syndication was spectively. Deposits from Asian countries well received, and margins varied from 175 rose $9 billion-mainly deposits of official basis points to 238 basis points over LIBOR. foreign exchange reserves by some govern- China's Nanhai Power Plant One Company ments and nonbank placements of savings also received a loan commitment. Elsewhere, outside their home country. Deposits of Chi- Poland obtained a loan commitment for the nese residents climbed $4.6 billion, while Torrow power plant, and a few projects in those of residents of the Republic of Korea Russia were announced. increased $3.2 billion. OPEC residents also deposited more (up $3.3 billion), as did res- idents of African countries (a $600 million MARKET CREDITWORTHINESS increase). Deposits from the former Soviet Union increased $715 million and from the U MORE UPGRADINGS FOR MORE Slovak Republic $397 million. COUNTRIES In the second quarter two Eastern European * HIGHER VOLUMES AND LONGER countries were assigned a sovereign credit MATURITIES FOR PROJECT FINANCE rating by Moody's: Poland and Slovakia both In the second quarter project finance on a received an investment grade credit rating of commitment basis increased 22% on the first Baa3 (table 5). This was Poland's first-ever quarter, to $4.9 billion. Asian economies, credit rating. Poland also was the first Brady- with high creditworthiness, accounted for bond country to receive an investment grade 67% of total commitments to developing rating. Poland's upcoming Eurobond issue was also assigned the Baa3 rating. Moody's TABLE 4 decision was based on the success of the sta- PROJECT FINANCE bilization program underway since 1990 and US$ millions the country's dynamic local market. Poland's 1994 1995Q2 debt servicing requirements have also be- Region 22,654 4,916 come more manageable. Standard & Poor's EastAsia and Pacific 13,132 2,920 ' Europe and Central Asia 4,211 811 however, awarded Poland only a BB rating, Latin America and the Caribbean 2,259 320 two notches below Moody's, although the South Asia 1,274 394 Sub-SaharanAfrica 938 0 outlookwas positive. Mostmarketanalystsex- North Africa and the Middle East 840 471 pressed surprise at the Moody's rating, saying Sector 22,654 4,916 that the S&P rating was more in line with Power 5,820 2,735 Telecommunications 1,468 405 their expectations. Transportation 577 25 Slovakia's Baa3 rating was based on its low Other Infrastructure 328 0 Noninfrastructure 14,462 1,751 hard currency debt, both in absolute terms Source: Euromoney Loanware and World Bank. and as a ratio of GDP and exports. In the past 8 FINANCIAL FLOWS AND THE DEVELOPING COUNTRIES INTERNATIONAL LENDING AND CAPITAL MARKETS two years the private sector has expanded policies and performance, its high per capita TABLE 5 dramatically, contributing more than 55% of income, and its low debt burden. S&P also SOVEREIGN FOREIGN CURRENCY DEBT GDP. Export growth has also been strong, raised Indonesia's rating from BBB- to BBB Long-term toting, as of june 30, with a shift from markets in the former Soviet and the outlook from positive to stable, thanks 1995 Union to those in the EU. S&P also upgraded to the government's prudent fiscal policies Moody's S&P Slovakia's foreign currency debt two notches, and its deepening of microeconomic reforms. Investment grade from BB- to BB+. The country's prudent eco- The country has also become less dependent Chile Baal** BBB+/ nomic management and the strengthened on oil exports. While the yen's appreciation China A3 BBB2 domestic economy weighed heavily in its de- has increased Indonesia's overall debtburden, Crombia na AA-' cision, says S&P. analysts believe that the level of debt should Czech Republic Baa2 BBB+2 Greece Baa3 BBS- A few other countries, including two in decline in the medium to long term, provided India Baa3 BB+' Latin America, were recently upgraded. that strong export growth continues and cur- Indonesia Baa3 BBB Korea, Rep. of Al AA- Moody's raised Chile's foreign currency debt rent account deficits remain moderate. Malaysia Al A±/ rating from Baa2 to Baal. Chile does not In May Moody's upgraded the foreign MaIt A2 A have any foreign currency bonds outstand- currency debt rating of the Philippines from Poland Baa3 BB ing, but the rating serves as a ceiling for do- Ba3 to Ba2 and its foreign currency bonds Portugal A-AA mestic issuers of debt. S&P's upgrade onJuly from Ba3 to Ba2. These upgrades come two Slovakia Baa3 BB+' 11 was from BBB+ to A-. Underlying the up- years after the Philippines received its first Th Ailan A2 A' grades are Chile's strong economic perfor- credit rating and are due to the economic im- Tunisia Baa3 n.a. mance in the past decade and its reformed provement in that time. Prospects for future Below investment grade institutional and political framework, which growth look promising, export and invest- rgi BB-/ will allow progress to continue. Other factors ment performance is strong, and there is po- Barbados Ba2 n.a. Brazil BVI* B-- were high domestic savings, the emphasis on litical support for reforms. Hungary Bal BB+' encouraging foreign direct investment over The effects of the Mexican peso crisis do Mexico Ba2/ BB! Seaa3 555+*5 short-term flows, and less dependence on not appear to have had any lasting impact on Pakistan Ba3 B+2 copper exports. In July S&P upgraded Brazil the creditworthiness of some Latin American Phil ppnes Ba2 BB/ BBB *2 from B to B+ based on the success of fiscal re- countries. Colombia and Argentina were Trndad forms launched last year. The agency also re- placed on review for a possible upgrade by and Tobago Ba2 n.a. Turkey BaJ 5-- vised its outlook from positive to stable. Moody's. The Czech Republic is also on review Uruguay Bal BB+' In East Asia, the Republic of Korea, In- for a possible upgrade because of its contin- Venezuea Ba2 B+3 * The first rat ng applies to foreign donesia, and the Philippines all received up- ued success with macroeconomic adjustment currency debt and she second to domestic currency deot. grades. S&P raised the long-term foreign policies, current and capital account sur- drAstofury IS. 1995. currency rating of the Republic of Korea from pluses, prudent fiscal policy, and widespread na. Not applicable. I. Stable outlaak. A+ to AA- and revised the outlook from posi- support for the coalition government. 2. Positive outlook tive to stable. Simultaneously, the long-term Portugal's AA- rating by S&P was affirmed foreign currency ratings of Korea Develop- in June. This rating is the result of steady ment Bank, Export-Import Bank of Korea, progress in macroeconomic reforms and the Korea Electric Power, and Korea Telecom expectation that there will be no major pol- were also raised to AA-. South Korea's rating icy changes after the parliamentary elections is supported by its consistent macroeconomic later this year. EQUITY PORTFOLIO AND FOREIGN DIRECT INVESTMENT EMERGING STOCK MARKETS helped by a more stable economic outlook for Mexico and lower US interest rates (figure 5). IFC's Global Composite Index increased by The upturn in emerging equity markets that 4.5%, reflecting mainly the ground lost by began in mid-March continued throughJune, Latin American markets. Those markets were AUGUST 1995 9 EQUITY PORTFOLIO AND FOREIGN DIRECT INVESTMENT - i ' | the latter part of the second quarter, but for FIGUREL E U the whole quarter prices were up 15%. With SELECTED EMERGING STOCK MARKETS, 1 995Q2 Since one Since last a still-favorable economic outlook, Peruvian IFCG ptyce index, percentage change in S$ year a_o quarter equities continued their upward path, in- creasing by 36%. Prices also received a boost after the government began negotiations -17.3 +4.3 +24.0 +14.8 +42.5 x +24.6 with commercial creditor banks on restruc- Li turing Peru's external debt under a Brady- style restructuring agreement. Many of the emerging markets in Asia _3*_ . *. . a - -(India, Pakistan, and Sri Lanka, for example) have been as weak as Latin American markets -25.7 -3.8 +11.4r +20.7 +0.7 -0.2 in 1995. Only Indonesia, Malaysia, and Thai- land have shown increases. Although the In- dian government's budget was probusiness and intended to provide a boost to a number of industries, political uncertainties com- bined with more scandals at the Bombay stock exchange have kept investors away. For + 7.4m w+79 +3.8 + 15.9 +62.8 +8.0 the second quarter, the IFC's India compos- ite fell by 3.8% on the previous quarter and 21.7% from a year ago. In an effort to attract foreign investors, the Indian government Sou,re: Intmatoa rlnace CorordSm data. may extend the tax holiday on foreigners' capital gains for another three years. The 2nd 18% higher, while the emerging markets of Karachi stock market fell, wiping $2.42 bil- Quarter Asia increased by a meager 1%. Investors may lion from the market's capitalization. The 1995 W_ have shifted funds from Asia to Latin Ameri- Karachi exchange is also facing competition IFCG price index, percentoge can and European markets in search of better from the growing Lahore stock exchange, chonge in US$ buying opportunities. which is moving toward computerization to Since one Since last In Latin America the Mexican market attract foreign investors. year ago quarter -47.9 +26.2 gained 26% in the second quarter but was Elsewhere in the region, Thailand's stock still 28% lower for the first half than a year market increased by 15%. The Thai govern- ago. The market appears to be gaining mo- ment has taken several steps to improve the mentum, however, as investors' confidence image of the market. Bangkok's Securities increases and some stocks look cheap. Also and Exchange Commission, formed three helping is progress with privatization. Ar- years ago, has issued new rules on stock mar- gentina's market increased by 4%, even ket liquidity and transparency, mergers and though the economy minister announced acquisitions, and foreign listings. It may also that the country is in a recession. Liquidity change the structure of brokers commissions fell in June, with an estimated average daily to make it more flexible and increase the ex- value traded of $19 billion, down 26% from change's competitiveness in Asia. The Thai May. In an effort to limit speculative trading Association of Securities Companies has set stemming from the different settlement pe- up a fund to help the market in times of liq- riods, starting in August all share transac- uidity squeezes. tions must be settled within 72 hours. Indonesia's stock market was 21% higher The devaluation of the Brazilian real de- in the quarter, mainly because of a heavy in- pressed equity prices in the stock market in flow of foreign institutional money, attracted 10 FINANCIAL FLOWS AND THE DEVELOPING COUNTRIES EQUITY PORTFOLIO AND FOREIGN DIRECT INVESTMENT by the country's favorable economic outlook sultants expect that US tax-exempt funds will 2nd and possible lower interest rates in the US. increase their holdings in international eq- Quarter 1995 Continuing its climb, the Turkish market uities, lifting foreign equities from the cur- _ was up 8% on the first quarter, with daily rent 11% to 15% of their portfolios by 1997. IFCG pnce index, percentage trading volume hitting a new high ($300 mil- Asia is expected to be the prime beneficiary. change in US$ lion). Lower interest rates, a positive outlook According to Citibank, fewer depository Since one Since last year ago quarter for inflation, and higher corporate earnings receipts issueswere launched in the first half + 16.6 + 14.6 all helped. But rumors that a large financial of this year compared with the first six institution that operates in the stock market months of 1994. Trading volumes for Amer- was experiencing difficulties sent prices tum- ican depository receipts (ADRs), however, bling toward the end ofJune. hit record highs in the first half of 1995. Russia's long-awaited securities law has US investors prefer listed ADRs issued been delayed, with more than 500 parlia- by developing-country corporations rather mentary amendments filed. Trading in Rus- than unlisted ADRs traded over the counter. sian shares, however, is being oiled by the Deals in listed depository receipts are more introduction of Russian Depository Certifi- transparent and liquid, with market making cates by ING Bank. These certificates enable by major investment banks. Companies that foreign investors to trade in six blue chip issue such securities also tend to be better Russian companies, including Rostelekom researched. and Red October, by calling ING offices in New York, London, and Moscow. The instru- * NEW EQUITY ISSUES FROM LATIN ment is a temporary device to attract foreign AMERICA REAPPEAR investors and will be in effect until Russia's International equity issues by emerging- securities markets mature. market companies increased to $3.8 billion in the second quarter, up on the previous quarter but below the levels seen in 1994 (fig- NEW EQUITIES AND ure 6). Asian firms continued to dominate, DERIVATIVES accounting for 47% of all issues. Philippine companies raised $547 million (or 31% of all * SLOWDOWN IN US SELL-OFF OF issues from Asia). The Philipino Telephone EMERGING-MARKET EQUITIES Worldwide net purchases of developing- country equities fell for the second consecu- FIGURE 6 INTERNATIONAL EQUITY ISSUES, tive quarter, but at a much lower rate. BY REGION According to US Treasury data, US investors' us$ billions net sales of emerging-market stocks totaled 19.6 $332 million in the first quarter, compared A Other with net sales of $2 billion in the previous EastD Latin America I I *~~~ East and South Asia quarter. For the whole of 1994, US residents purchased $4.5 billion of developing-country stocks ($13.6 billion in 1993). Net purchases of Latin American stocks were down by $397 million, with Mexican shares accounting for 37 50% of that. Despite the Mexican crisis, the trend continues toward international diversi- fication by institutional investors-one rea- /994 /995Q I 1995Q2 son for the steady growth of net purchases of Note. Equ,ty figures Inciude domest c tranches. Source: Euromorey Bondware and Word Bank developing-country stocks. US market con- AUGUST 1 995 11 EQLITY PCORTFOLIO AND FOREIGN DIRECT INVESTMENT TABLE 6 Corporation's issue was well received by in- in the republic to raise funds through a $32 DEVELOPING vestors, even though it was launched at the million issue of GDRs. Hungary privatized a COUNTRIES' BEST- PERFORMING top end of the pricing range. The strongest share of a state-owned bank through an in- CLOSED-END demand was from Asian, followed by Euro- ternational equity offer. EQUITY FUNDS pean and US, investors. Chinese issues of Averoge ADRs and H-shares reached $517 million. * EMERGING-MARKET MUTUAL FUNDS returnREO R June 995 The well-received offering for Yltheng Chem- RECOVER Market (percent) ical Fibre was the first international sale of Emerging-market stock mutual funds con- Russia (4) 22.37 Chinese stock in 1995. Republic of Korea tinued their hesitant recovery in the second Mexico (3) 7.23 Turkey (3) 4.35 firms continue to be active, raising $270 mil- quarter of 1995 (tables 6 and 7). Some in- South Korea (17) 2.05 lion. With the maximum foreign investment vestor confidence returned to Latin Ameri- Indonesia (I 0) 2.02 Emerging Europe (7) 1.26 in a company's stock now raised from 12% to can funds, which showed the highest Chile (5) 1.17 15% of outstanding shares, Korean firms are percentage returns, albeit from low levels. Phi:ippines (4) 1.17 Viet Nam (4) 0.55 expected to step up issuance of international Some Asian funds, however, were dull, re- Malaysia (4) 0.25 equities. Prime Textile Spinning Mills in flecting the weak performance of underlying Africa (6) 0.09 Emerging global (26) -0.12 Bangladesh raised $7.2 million, the country's markets. Exceptions were funds from the Re- Latin America (I17) -0.12 first international equity issue since 1993. public of Korea, Indonesia, and the Philip- Portugal (4) -0.5634 Portugal Telecom raised $970 million pines, which all did well. There was some China (5) -0.97 through a mix of domestic offerings, ADRs interest, too, in funds from Viet Nam. Turk- Brazil (2) -2.67 India (I 6) -3.06 ($371 million), and cross-border equity issues ish funds were in demand thanks to a strong Note; As of June 30, 1995. Figures for privatization. The government had ear- stock market. The best performers, however, in category. marked for sale up to 28% of its stake in Por- were Russian funds. Source: Lipper International Cosed- tugal Telecom. DuringJune it also sold 40% End Fines Service. 0NWFNSTRE MLE MRIG of its stake in Portugal Portucel Industrial to U NEW FUNDS TARGET SMALLER EMERGING- domestic and international private investors. MARKET COMPANIES Only a handful of Latin American com- During the quarter Barings and nine US in- panies issued equity on international mar- stitutional investors formed a private equity kets in the wake of the Mexican crisis. A fund (Latin America Enterprise Fund), with TABLE 7 Panamanian hotel was the first to enter the $140 million in capital. This will be invested DEVELOPING- market, raising $371 million. The Brazilian in nonlisted companies with good growth po- COUNTRY FUNDS: firm Makro Atacadista raised $110 million tential in Argentina, Brazil, Mexico, Peru, TOP FIVE DISCOUNTS AND PREMIUMS through global depository receipts (GDRs). and other Latin American countries. Percentage difference between net Potential issuers may be waiting on the side- Deutsche Bank is expected to launch, easer value end shore pnce lines until market conditions improve fur- through its subsidiary in Argentina, three Percentage difference ther and more favorable prices can be sought open-ended funds that will invest in Argen- Lorgest discounts for new issues. One feature of recent issues tine and in international securities: a stock, a Genes s Chile Fund Ltd. -4i 99 (especially Latin American) has been the fixed income, and a global fund. Santander CH China Investments Ltd. -4 .29 more active use of the private placement Investment will launch Santander Accion, a First Russian Frontiers market. $50 million closed-ended fund that will be Thai PrimeFund Ltd, -34.31 Elsewhere, there were a number of equity listed on the Santiago exchange. Its invest- Five Arrows Chile issues by financial institutions. Turkey's ments will be in firms capitalized at less than Investment Trust Ltd. -33.56 largest stockbroker, Global Securities, $300 million. Scudder, Stevens & Clark Indonesia Fund Inc. 20.14 launched an initial public offering that launched another fund (Peru Fund), raising Emerging Mexico Fund Inc. 16.57 raised $26.3 million, and Nedcor, a private $65 million. It will be the first single-country India Growth Fund Inc, 5.48 bank in South Africa received a warm wel- Peruvian fund to be listed on the NYSE. Herzfeld Caribbean Basin 8.70 b Schroder Indian Community 6.63 come for its $125 million issue. The fourth- Baltic countries continue to spark the cre- Note. As ofJune 30, 1995. largest commercial bank in the Czech ation of new funds. A New York fund man- Source: Lipper Internat onal Closed- End Funds Service. Republic, Komercni Banka, was the first firm agement company launched Baltic Fund 1, a 12 FINANCIAL FLOWS AND THE DEVELOPING COUNTRIES EQUITY PORTFOLIO AND FOREIGN DIRECT INVESTMENT private equity fund, and is expected to raise being actively courted, and the laws on intel- $60 million. Estonia's Hansabank has a fund lectual property rights are being tightened. in the making, Baltic Basin Fund, and is ex- Many US companies plan further expan- pected to begin marketing itto foreign fund sion in emerging markets in the next few managers soon. years, and Latin America will likely continue Elsewhere in Eastern Europe, EBRD es- to receive a large slice of that investment. For tablished a $50 million private equity fund, many reasons, including geopolitical ones, Post Privatization Fund, that will invest in the US will probably remain the major source Romania's private sector. Templeton plans country for FDI in Latin America, still con- to launch Templeton Russia Fund, Inc., the sidered to be the second-fastest-growing first fund to be registered in the US that will region in the world. Medium-term annual invest primarily in Russian equity. growth for the region is forecast to be at least Lloyd-George is expected to launch Asia twice that of industrial countries. Healthcare Trust soon. The fund will invest in the healthcare sector in Asian countries and * PRIVATIZATIONS PICK UP SLOWLY will be listed on the London Stock Exchange. The pace of privatizations in developing Hong Kong's Asian Capital Growth Fund, a countries picked up in the second quarter of balanced open-ended fund that will invest in 1995 but remained below the peaks of recent bonds, convertible securities, and equity, will years. Some programs were derailed while target US and European investors. Tunisia's others advanced. Slovakia's parliament International Maghreb Merchant Bank is ex- passed a law putting an end to the second pected to launch a regional fund that will in- mass voucher privatization program, creat- vest in unlisted and prelisted firms in Algeria, ing doubts about the privatization program. Jordan, Morocco, and Tunisia. The closed- Some 3.5 million Slovaks who registered for ended fund is expected to raise $30 million. the second wave of coupons each will be com- pensated with five-year bonds worth $340. State companies are now to be sold directly FOREIGN DIRECT INVESTMENT to investors. Investmentfunds created for the AND PRIVATIZATION intended voucher privatization will close. In an effort to speed up its privatization * FDI IN LATIN AMERICA IS UP program, Hungary passed a new privatiza- Despite its dramatic effect on Latin American tion law that merged the State Property currency markets, the Mexican peso crisis Agency and the State Holding Company. does not appear to have had much effect on This action paved the way for a utilities sell- foreign direct investment (FDI) in the region. off and emphasized cash sales and public of- Although Mexico witnessed a sharp drop in ferings. The government has indicated its capital inflows of all types, a study by KPMG desire to sell a small stake in Matav, the Peat Marwick indicates that direct investment telecommunications company, this year and in Latin America by US companies in the first a major holding next year through an inter- quarter of this year was $1.9 billion, almost national placement. Privatizations will raise 50% up on the first quarter of 1994. Unlike $1.27 billion in 1995. Meanwhile, the Czech their response in previous crises, Latin Amer- Republic sold 27% of SPT Telecom to for- ican countries have responded this time by eign concerns, despite domestic opposition. opening their markets to try to lure more for- The consortium TelSource, led by a Dutch eign direct investment. In Brazil, for exam- telecoms group, won the tender for $1.45 bil- ple, barriers to investment in electricity, lion. Although it was the second-highest bid, energy, and telecommunications are being TelSource was picked because it plans to pulled down rapidly. Foreign investors are modernize the system. AUGUST 1995 13 EQU:TY PORTFOLIO AND FOREIGN DIRECT INVESTMENT In Latin America some countries moved itory receipts for privatization. China was the their privatization programs forward first country to issue such securities in 1995. through liberalization of investment It raised $182 million forJilin Chemical In- regimes. Foreign investors in Bolivia can now dustrial Co. and $127 million for Yizheng acquire a 50% stake in a state-owned com- Chemical Fibre Co. Ltd. The second, and by pany (and inject new capital into the firm). far the largest, issue was for Portugal Tele- The other 50% will be distributed to Boli- com SA, which raised nearly $371 million vians 18 years and older through pension through ADRs listed on the NYSE. Portugal funds. The government generates no rev- also raised $142 million for Portucel Indus- enue from the program. Companies ex- trial. Hungary privatized part of its OTP pected to be capitalized include Entel, the Bank-National Savings & Commercial Bank telecommunications firm, YPFB, the oil and Ltd. through GDR issues. Activity is expected gas company, and ENFE railways. Brazil sold to pick up as developing countries proceed 50% plus one share of Escelsa, an electrical with their privatization programs. utility, to a Brazilian consortium of pension Since 1990-when the US Securities and funds and investment banks for $387 million. Exchange Commission (SEC) adopted Rule Mexico is expected to privatize more in 1995. 144A and Regulation S, which facilitate the Sales are to include airports, railroads, com- use of ADRs and GDRs-capital raised munications, petrochemicals, and oil refin- through ADRs and GDRs has increased sub- ing, and to net $14 billion. The first auction stantially. Also, the success of large Euro- is for nine concessions to run nine major pean privatization programs has provided a ports, which carry 70% of Mexico's ocean- solid foundation for the growth of this is- going cargo. That will be followed by rail- suance vehicle. ADRs and GDRs have been roads, petrochemicals, and toll highways. increasingly used by private entities and gov- Only Pemex will be left untouched. ernments (which privatized state-owned en- Turkey's revenue from privatization so far terprises) in developing countries to raise is less than expected (only $69 million) be- funds in international capital markets. cause it has been selling small companies. Developing countries raised $2.4 billion But some large companies may be coming through ADRs and GDRs in 1991 and $5 bil- under the gavel, including 49% of Turk Tele- lion by 1994, accounting for an estimated com, through a domestic and international 28% of all privatization proceeds. Argentina public offer to raise $2 billion. Twenty-two and Mexico were the first developing coun- percent of Eregli, a steel company, may also tries to use ADRs and GDRs for privatization. be sold. Morocco, too, is continuing with its Mexico raised $2.2 billion in 1991 and $1.2 privatization program. The government sold billion in 1992 for the sale of Telefonos de 18% of its stake in Eqdom, the country's first Mexico SA de CV. Argentina raised $360 mil- consumer credit company, through the local lion for Telefonica de Argentina SA in 1991 bourse. It also plans to sell hotels, sugar and $2.3 billion for YPF SA in 1993. plants, and two oil refineries by 1996. In 1994 nearly a dozen developing coun- The slow pace of privatization in 1995 has tries used ADRs and GDRs for their privatiza- also been reflected in the issuance of ADRs tion programs. Leading the pack was and GDRs for privatization. During the first Indonesia, which raised $904 million for In- half of 1995 depository receipt issues came to dosat-PT Indonesian Satellite Corp., followed a halt because of the repercussions in devel- by Pakistan, which raised $898 million for Pak- oping-country markets arising from the Mex- istan Telecommunications through a GDR ican peso crisis. But in the second quarter issue. Otherfirst-time issuers in 1994 included investors regained confidence in emerging Brazil, which raised funds for Compania En- markets, and several countries issued depos- ergetica de Sao Paulo, Unisas Siberurgicas de 14 FINANCIAL FLOWS AND THE DEVELOPING COUNTRIES EQUITY PORTFOLIO AND FOREIGN DIRECT INVESTMENT Minas Gerais SA, and Compania Energetica tion, though the majority were concentrated de Minas Gerais, and Ghana, which raised in Latin America and Asia. At first issues were $398 million for Ashanti Goldfields Co. Ltd. concentrated in the telecommunications and By 1994 more and more developing countries utilities sectors, but by 1994 the sector base were issuing depository receipts for privatiza- had become more diverse. SECONDARY MARKETS FOR DEVELOPING-COUNTRY DEBT * SUBSTANTIAL RECOVERY FROM THE anticipated in part Russia's rescheduling MEXICAN CRISIS agreement at the Paris Club and the initial In the second quarter emerging-market debt talks with commercial bank creditors on a instruments shrugged off the Mexican deval- multiyear rescheduling. Expectations of a uation crisis, helped by falling US Treasury Brady debt reduction deal likewise pushed yields. While Mexican debt prices remained Peruvian prices steadily higher, and C6te depressed, most others rose, although mar- d'Ivoire debt prices rose in advance of dis- kets continued to be a little nervous. Toward cussions with its bank advisory committee. the end of the second quarter, Argentine According to the Emerging-Markets Brady par bonds were trading at a higher Traders Association, debt trading volume in level than before the crisis (December 1994), 1994 reached a record $2.8 trillion, up 40% as were Peruvian loans and Venezuelan Brady on 1993. (Unchanged or declining volumes discount bonds. Bid-offer spreads were also are expected for 1995.) Behind the 1994 in- narrower. And non-Latin American Brady crease were the completion of debt reduc- bonds, such as Philippine par bonds, were tion deals for Brazil, Bulgaria, Poland, and also up. the Dominican Republic, and increased liq- Investment flows from emerging-market uidity in bond markets. Greater participation funds turned positive and continued so in options trading and domestic securities throughout the second quarter. Flows to were secondary factors. Trading in Mexican emerging markets from global funds, how- instruments amounted to $601 billion, the ever, were more mixed, with both inflows and largest individual country volume. Trading outflows reported, and continued price in East European debt doubled to $172 bil- volatility. lion, with Poland the most popular country. Vneshekonombank debt prices rose African debt accounted for $111 billion in sharply in the second quarter, from 22 cents trades, with Nigerian and Moroccan instru- or so on the dollar to around 29. The increase ments the most active. OFFICIAL FLOWS: MULTILATERAL AND BILATERAL MULTILATERAL FLOWS Mexico, which will also be used to strengthen the financial sector, particularly the banking * BIG LOANS FOR MEXICO system, and to easc the burden on the poor In June the Inter-American Development as a result of postdevaluation problems. Bank (IDB) approved a loan for Mexico to- taling $1.25 billion, the biggest in the bank's * NEW WORLD BANK LOAN TO CHINA history. About $750 million is to be used to The World Bank has pledged to lend China boost Mexico's banking system and to im- roughly $3 billion a year over the next three prove the regulatory framework. The rest years to assist with infrastructure improve- will be used to finance social programs. The ments, poverty reduction, education, and World Bank approved a $1.5 billion loan for environmental protection. The loan should AUGUST 1995 15 OFFICIAL FLOWS: MULTILATERAL AND BILATERAL TABLE 8 allow China to achieve high rates of growth * EXIM JAPAN TO RESUME DIRECT SUMMARY MEASURE while maintaining macroeconomic stability. FINANCING TO BRAZIL OF TERMS OF COVER BY MAJOR EXPORT The Bank remains the largest single source The Export-Import Bank of Japan an- CREDIT AGENCIES of foreign capital for China. nounced recently that it has decided to re- Score Score sume direct export and overseas investment MLTre SThr Chi.e ML 76h * MIGA PROVIDES COVERAGE IN VIET NAM loans to Brazil, folloving the Cardoso ad- Chile ~ 81 76 China 86 78 The Multilateral Investment Guarantee ministration's success in economic reform. Colombia 74 70 Agency (MIGA) awarded the first guarantee These loans had been suspended since Czech Republic 92 83 Ghana 72 62 contract in Viet Nam to a branch bank of September 1992, because of Brazil's inability Hungary 86 79 Citibank in Hanoi. The contract guarantees to comply with IMF requirements. As a first Indonesia 80 70 Romania 85 88 US$13.5 million of Citibank's US$15 million step, EXIMJapan and the Brazilian develop- Tunisia 73 83 investment, providing coverage against the ment bank, Banco Nacional de Desenvolvi- risks of expropriation, transfer restriction, mento Economico e Social, have signed a Brazil 67 75 Egypt 60 66 war, and civil disturbance. The Hanoi branch Y10 billion loan agreement. The money will Poland 64 83 will focus on trade financing, foreign ex- be used by Brazilian companies for pur- Russia 62 70 South Africa 67 70 change services, consulting, and cash man- chases ofJapanese goods and services. Bulgaria 52 54 agement. MIGA is also considering a number A Brazilian pulp and paper producer, Mexico 34 78 of other investments in Viet Nam for similar Celulose Nipo-Brasileira, is also expected to Pakistan 54 83 Philippines 56 73 coverage. receive a loan of $200 million from EXIM Venezuela 53 63 Japan to expand production capacity. Zimbabwe 57 66 * MULTILATERAL FUNDS APPROVED FOR Argentina 48 69 KAZAKHSTAN * EXIM JAPAN AGREEMENT WITH IDB FOR Ecuador 24 57 ACCELERATED COFINANCING FACILITY India 49 75 Kazakhstan has received a 12-month standby Iran 40 53 credit from the International MonetaryFund EXIMJapan and the Inter-American Devel- Morocco 46 60 Peru 21 78 (IMF) of about $290 million, or 75% of its opment Bank have agreed to set up an ac- Algeria 15 79 IMF quota. The facility is to be used to celerated cofinancing facility, designed to Angola 4 4 strengthen reform efforts, particularly enter- simplify and standardize procedures be- C6te d'lvoire 12 60 Iraq 0 0 prise restructuring and privatization. The tween the two banks and allow faster pro- Kenya 17 38 World Bank also approved a credit of $180 cessing of loans. More specifically, the Nigeria 0 36 million for the country's privatization pro- agreement seeks to expand cofinancing of Note: As of end-Mac 1995. a. Medbum- t long-term, gram and unemployment system. IDB project loans with EXIMJapan's untied b. Snort-term. Source: World Bank and Berne loans, particularly those under Y5 billion Union oats, equivalent. EXIM Japan will make maxi- BILATERAL ODA AND EXPORT mum use of the IDB's experience and ex- CREDITS pertise in identification, coordination, and appraisal of projects in Latin American and * OECD REPORTS DROP IN REAL Caribbean countries. The IDB will also as- DEVELOPMENT AID sume primary responsibility for implemen- The OECD reports that the overall aid to tation and supervision of disbursements. GNP ratio among donor countries in 1994 The facility will enhance a memo of under- dropped to 0.29%, the lowest in more than 20 standing signed by the two banks in 1987 for years. Japan remained the top world donor cofinancing of large-scale projects and other ($13.35 billion disbursed). The US was high broader uses. EXIMJapan has been actively in absolute terms, but its contribution was supporting the economic growth of devel- down 5% on 1993. Nominal aid flows through oping countries through cofinancing with multilateral institutions increased in 1994 to multilateral institutions. It signed a similar almost $60 billion, but adjusted for inflation cofinancing agreement with the World Bank and currency movements, real aid fell 1.8%. in August 1994. 16 FINANCIAL FLOWS AND THE DEVELOPING COUNTRIES OFFICIAL FLOWS~ MULTILATERAL AND BILATERAL * EXIM JAPAN GIVES EMERGENCY HELP math of Mexico's currency crisis. EXIM TO ARGENTINA Japan's loan is in response to a direct re- Parallel to and in cooperation with the quest by Argentina's minister of economy, IMF's extended fund facility of $2.4 billion, Domingo Cavallo, made during a recent the Export-Import Bank of Japan granted visit toJapan. The loan follows a similar yen- Argentina an untied loan of Y80 billion to denominated loan to Argentina in early support the financial sector in the after- 1993. LC) a'T' R ELLEF P ATE OFFICIAL CR EDITORS For a 12-month consolidation period, Mau- ritania obtained a 67% reduction on current M PARIS CLUB CREDITORS CONCLUDE maturities. But on the previously rescheduled THREE MORE NAPLES TERMS DEALS debtcoveredbytheJune 19,1989, agreement, The Paris Club concluded 11 agreements it obtained a 25% to 50% forgiveness based on from January through June 1995, nine of the creditor country. The remaining amounts them under the newest Naples Terms, in- will be paid over nine years with two years' tended for the poorest and most indebted grace. The agreement with Haiti (its first Paris countries (table 9). Three agreements-for Club agreement) provided for a 67% reduc- Mauritania, Haiti, and Senegal-were in the tion in eligible debt over a 36-month consoli- second quarter. In early June the Russian dation period. These agreements provide for Federation also reached the third reschedu- Paris Club consideration of the outstanding ling agreement with Paris Club creditors. stock of debt after three years. The Russian Federation agreement cov- ers $6.4 billion, with a consolidation period of 12 months. The structure of the deal is COMMERCIAL CREDITORS similar to those negotiated in 1993 and 1994. Pre-cutoff-date debt (contracted before U ALBANIA AND PANAMA REACH 1991) will be paid in graduated installments AGREEMENTS IN PRINCIPLE; SIERRA LEONE twice a year, starting with less than 1% on USES IDA FACILITY October 31, 1998, going through to April30, In May 1995 Albania and Panama reached 2011, with a payment of 8.1%. Debt con- agreements in principle with their respective tracted during 1991 with a maturity of more commercial bank creditors on Brady-style than one year will also be paid in graduated installments from October 1998 to April TABLE 9 PARIS CLUB RESCHEDULING AGREEMENTS, 2006. The principal amount due on the 1993 JANUARY-JUNE 1995 rescheduling debt will be paid in 10 equal in- US$ millions stallments from October 1997 to April 2002 Country Date amount date pend through Type orin graduatedinstallmentsfromApril 1997 Guinea 1/25/95 156 1/1/86 12/31/95 Naples to April 2005. Depending on the type of debt Uganda 2/20/95 110 PRD Stock Naples Guinea-Bissau 2/23/95 195 12/31/86 12/31/97 Naples involved, 40% of the interest due on the Togo 2/23/95 239 PRD 9/30/97 Naples 1993 agreement, and 33% of that due on the Croata 3/20/95 861 12/2/82 12/31/95 Speciala Nicaragua 3/21/95 848 11/1/88 6/30/97 Naples 1994 agreement, will be deferred and paid Bolivia 3/24/95 482 12/31/85 12/31/97 Naples in 10 equal semiannual installments from Senegal 4/20/95 169 111/83 8/31/97 Naples October 1998 to April 2003. The remaining Haiti 5/30/95 117 10/l/93 3/31/96 Naples Russian Federation 6/3/95 6,400 1/1/91 12/31/95 Speciala interest will be paid on due dates, as well as Mauritania 6/28/95 - 12/31/84 12/31/97 Naples the amount due on the June 4, 1994, - Not available; PRD is previously rescheduled debt a. With graduated paymnents. rescheduling. Source: World Bank. AUGUST 1 995 17 DEBT RELIEF UPDATE debt reduction packages. Albania's agree- reschedule obligations falling due through ment covers $385 million of debt, with a buy- 1997, including service payments that had back or par bond exchange. Panama's been previously rescheduled. At the end of agreement covers $2 billion of debt and offers June, Slovenia reached agreement in princi- discount and par bonds. Sierra Leone com- ple with the commercial bank advisory com- pleted the first phase of its buyback of com- mittee of the former Yugoslavia to assume mercial bank debt, financed under the IDA responsibility for 18% of unallocated debt. debt reduction facility; $148 million of debt Negotiations continue between Peru was extinguished at a cost of $22 million. and its bank advisory committee (led by In the same month Algeria reached agree- Citibank) and between Viet Nam and its ment with commercial bank creditors to creditors. COMMERCIAL BANK PROVISIONING AND CAPITAL ADEQUACY * JAPANESE BANKS' PROFITABILITY TABLE 10 RISK-WEIGHTED CAPITAL RATIOS DECLINES Percent, March 1995 Tirceer Morch 1 Total TierITotalTirTota Capital adequacy ratios for major interna- 7ier I Total Tier I Total Tier I Total B -itain (~ Germany (DM' -- - tional banks were for the most part little Britain (£)' Cennany (DM)' United States (US$) Bardays 7.0 10.4 Commerz 5.3 9.2 BankersTrust 8.9 14.4 changed at the end of the first quarter Lloyds 7.8 12.8 Deutsche 5.6 10.4 Citicorp 8.0 12.0 (table 10). However, Japanese banks suf- Nat West 6.4 11.0 Dresdner 6.0 10.0 J. P. Morgan 8.8 13.1 fered a small decline in tier 2 (total) capi- France (F)' Japan (M) tal adequacy ratios, although tier I BNP 5.6 9.7 Dai-Ichi Kangyo 5.0 8.7 Credit Lyonnais 4.4 8.3 Sakura 4.8 8.7 (primary) capital ratios were virtually un- Paribas 7.6 9.0 Sumitomo 4.9 8.5 changed. The principal reason was contin- Societ6 Generale 5.5 9.3 -od& -~ni 5.5 9.3uing low profitability, due in part to a As of December31, 1994. Source: The Banker; Salomon Brothers; and IBCk revaluation losses. FINANCIAL BRIEF EAST ASIA'S BOND MARKETS SET TO EXPLODE If reforms in East Asian countries stay on requirements but generate little cash flow in track, economic growth and investments will their early years (figure 7). As populations remain high and will likely lead to a rapid ex- move to urban areas, the need (and financ- pansion of Asian bond markets to meet fi- ing) for housing is also expected to grow nancing needs. That is the picture according rapidly. to a recent World Bank study.1 While much of the debt financing in the Between 1980 and 1994, East Asian eco- past came from commercial banks, it is doubt- nomic growth was the highest of any region, ful that they will be able to meet future needs averaging 7.8% a year. At the same time, in- in full. The long-term maturities required cre- vestment ratios averaged 37% of GDP. There ate a mismatch between assets and liabilities was also a change in the structure of East that commercial banks cannot easily accom- Asian economies from labor-intensive to modate. Moreover, since banks must meet capital-intensive manufacturing, which in- the Basle requirements for risk-adjusted cap- evitably means a growing emphasis on long- ital adequacy ratios, the cost of their inter- term debt financing. A bigger share of mediation is raised and the effect is investment will be directed toward infra- proportionally greater for the highest-quality structure projects, which have huge capital debtors, including some East Asian countries. 18 FINANCIAL FLOWS AND THE DEVELOPING COUNTRIES FINANCIAL BRIEF Bond markets emerge as natural candidates FIGURE 7 for long-term financing to fill the gap. EAST ASIAN INVESTMENT REQUIREMENTS IN EastAsian domestic institutional investors INFRASTRUCTURE, 1995-2004 US$ billions (mainly central provident funds, social secu- rity organizations, and mutual funds) in the 700 countries of the study had assets worth $103 600 Lowt billion (8% of GDP) at the end of 1994 (fig- 500 ure 8). These are expected to grow quickly in the coming years, but not fast enough to meet East Asia's long-term financing needs. 300 Contractual sa-vings institutions, such as prov- 200 ident funds and pension plans, are becoming _yj more autonomous in investment strategies 0 and investment mix. Their increasing auton- port r Telecom Water and Sanitation omy encourages them to seek long-term Source The ErergengAs;nn bond Market (Wodd Bank, June 995). fixed-income instruments. Mutual funds, which had roughly $20 billion in assets at the FIGURE 8 end of 1994, are also developing rapidly. At ASSET SIZE OF EAST ASIAN INSTITUTIONAL INVESTORS, the same time international investors are be- 1994 coming active in East Asian markets. In 1991-93 East Asian issuers raised $32.7 bil- Contractual savings lion internationally through fixed-incomed securities, including convertible bonds. Moreover, deregulation of domestic markets Pension funds has allowed foreign portfolio bond flows into Private pension funds these countries. 0 to 20 30 40 50 60 70 80 Some of these domestic markets are al- ready substantial (table 11). At the end of S_oce Wod Bane 1994 Singapore (a high-income country) TABLE 11I had the largest bond market in East Asia, es- SIZE OF THE EMERGING EAST ASIAN BOND MARKET, timated at 72 % of GDP. About 98% of bonds END- 1994 listed on the Singapore Stock Exchange are us$ billions Asian dollar bonds, and Singapore is being Notional Stote State Central govemment govemment enterprise bank Corporate Total % GDP developed as a major regional bond market. Ch na 24.4 0 9.0 0 0 33.3 6.5 Hong Kong (also high-income) is the other Hong Kong 0. 0 0 6.8 4.7 11.5 8.7 major financial center in East Asia. The Indonesia 0 0 1.5 6.8 0.7 9.1 5.8 Korea, Rep. of 27.9 2.7 37.4 32.1 60.8 161.0 42.8 Hong Kong bond market has started to grow Malaysia 29.0 0 3.7 2.0 4.9 39.5 56.0 rapidly following regulatory reforms and ini- Phil ppines 24.8 0 0.1 0.2 0 25.1 39.3 S ngapore 42.3 0 0 0 2.5 44.9 72.4 tiatives. Hong Kong allows issuing of bonds Thailand 2.6 0 7.6 0 3.5 13.7 9.8 in local currency and has created benchmark Source: Word Bank staff est mates. instruments (exchange fund bills and notes) and lengthened the maturity structure of determined efforts to develop the market and debt instruments. There is an active and liq- establish a yield curve. Employee Provident uid secondary market, and the clearing and Fund is a major player in the market, as is the settlement system has been improved. government. Securities issued by Cagamas Malaysia has the second-biggest bond mar- Berhad (the mortgage corporation) rather ket (56% of GDP, $39.5 billion). The govern- than government treasury securities provide ment and the central bank have made benchmarks, given the fiscal position of the AUGUST 1995 19 FINANCIAL BRIEF government and its reduced need for bond fi- is in place for rapid growth once the planned nancing. Privatization has given a boost to the financial sector reforms are completed. bond markets in the face of declining gov- Indonesia's market is the smallest (6% of ernment bond issuances. So, too, has the GDP, $9.1 billion). The corporate bond mar- presence of large institutional investors. ket has been hampered in the past by regu- Thailand has a small but also rapidly grow- lations and procedural hurdles. The ing bond market (almost 10% of GDP, $13.7 Philippine market (39% of GDP, $25.1 bil- billion), and the government is taking steps to lion) is dominated by government issues, and boost the market. The market of the Repub- there are only a handful of corporate issuers. lic of Korea is the largest by volume-$161 Regulations, infrastructure, and tax reforms billion at the end of 1994, or 43% of GDP. Al- will strengthen this market. The Chinese though the market is still relatively closed to market is small, at almost 7% of GDP ($33.3 foreign investors, much of the infrastructure billion), and is tightly regulated and con- trolled. These constraints will have to be ad- dressed before the market grows. FIGURE 9 Most East Asian countries appear to be SIZE OF THE EAST ASIAN BOND MARKET, 1989-2004 headed for fast growth in the bond markets 'S$ billions (figure 9). Further regulatory reforms cou- 1,200 pled with the growing needs for financing L Korea, Rep. of point to an encouraging overall trend in 1,000 * China bond market development in the next H Thailand/ 800 2E Malaysia/ decade. While these are general indicators, * Philippines country-specific problems still must be ad- 600 * Indonesia dressed to ease the expansion of the bond markets. It is expected that bond markets in 400 the East Asian countries will occupy an in- creasingly important place in future financ- 200 A _ _ - _ _ _ _ ing of domestic investment. 1990 1992 /994 1996 1998 2000 2002 2004 1. The Emerging Asian Bond Mfarket (World Bank, June 1995). Countries covered are China, Hong Note: Figures for 1995-2004 are proisiona estimates. Kong, Indonesia, the Republic of Korea, Malaysia, Source: Wood Bank staff estimats- the Philippines, Singapore, and Thailand. 20 FINANCIAL FLOWS AND THE DEVELOPING COUNTRIES STATISTICAL APPENDIX TABLE A.l BANK AND TRADE-RELATED NONBANK CLAIMS US$ millions 1 994Q2 Trode-reloted Bank Guaronteed nonbank Country group or country 1989 1990 199/ 1992 1993Q4 Totol cloams ciarms cloims All developing countries 707,466 749.424 788,765 826,525 843,580 879,730 710,733 122,257 168,997 EastAsiaand Pacific 120,285 148,577 173,722 198,924 219,517 244,680 212,385 20,711 32,295 Europe and Central Asia 157,439 184,089 189,401 89,423 192,808 196,246 162,417 34,438 33,829 Latin America and the Caribbean 258,601 238.974 244,805 257,599 258,043 255,803 220,149 30,006 35,654 Middle East and North Africa 94,52 94,922 100,018 95,751 94,140 100,657 63,661 22,034 36,996 South Asia 21,495 22,489 21,566 25,083 23,486 25,016 20,199 5,597 4,8 17 Sub-Saharan Afr ca 55,125 60.373 59,253 59,745 55,586 57,328 31,922 9,471 25.406 Severely indebted middle-income 212,134 222,459 219,944 223,044 219,777 220.068 169,545 17,552 50,523 Angola 2,168 2.370 2,680 3,453 3,172 3.227 1,918 1,248 1,309 Argentina 35,787 34.475 36,356 39,640 35,6 1 36,667 30,554 2,943 6,113 Bolivia 453 463 534 604 689 720 430 41 290 Brazil 77,887 76.167 71,931 74,069 77,229 72,605 64,077 4,506 8,528 Bulgaria 8,324 9.348 8,909 8,067 7,130 6,890 6,251 582 639 Cameroon 2,194 2,757 2,843 2,667 2,477 2,506 1,326 541 1,180 Congo 1,537 1,724 1,622 1,716 1,738 1,825 1,093 225 732 Ecuador 5,202 4,773 4,553 4,198 3,644 3,530 2,980 426 550 Jamaica 983 975 737 753 772 727 475 144 252 Jordan 3,217 3,657 3,297 2,869 2,704 2,735 1,767 697 968 Morocco 7,201 8,002 8,053 7,994 7,413 8.0 4 5,360 2,558 2,654 Panama 20,006 22,855 22,926 22,725 23,913 25.482 25,066 121 416 Peru 5,967 6,179 6,143 6,423 5,974 6,177 3,306 322 2,871 Poland 21,044 26,301 27,099 25,569 23,735 22,801 12,321 2,413 10,480 Syran Arab Republic 1,326 1,219 1,107 1,034 1,278 1,281 550 44 731 Uruguay 2,123 2,226 1,991 2,581 2,771 2,478 2,410 125 68 Severely indebted low-income 43,022 50,281 49,707 50,229 49,740 50.391 29,613 4,320 20,778 Moderately indebted low-income 40,989 38,125 36,848 38,586 35,314 36,499 24,846 7,342 1 1,653 Moderately indebted middle-income 284,698 292, 28 309,373 322,750 320,907 329,345 280,002 67,711 49,343 Selected countriesa 336,490 347,822 381,356 410,694 431,442 459,618 389,558 67,589 70,060 Algeria 20,285 21,014 21,805 18,661 18,177 20,574 17,407 11,658 3,167 Chile 9.880 9,823 9,149 11,188 11,189 11,692 10,584 680 1,108 China 26,682 34,430 41,381 48,566 56,326 61,243 52,464 8,300 8,779 Colombia 8,841 8,889 8,479 8,795 9,061 10,019 8,714 1,288 1,305 C6ted'lvore 4,186 4,379 4,042 3,986 3,581 3,561 2,143 328 1,418 Egypt 8.689 14,224 13,569 11,886 10,452 10,330 3,709 1,478 6.621 Hungary 12,219 12,359 11,151 9,289 8.006 8,160 7,368 748 792 India 15,950 15,640 15,383 18,601 16,699 17,609 14,947 3,444 2,662 Indonesia 25,507 34,850 39,773 46,967 44,801 46,457 37,935 5,135 8,522 Korea, Rep. of 31,503 36,216 41,820 44,598 47,077 53,904 52,039 1,868 1,865 Malaysa 9,141 9,252 10,062 12,886 18, 82 19,847 17,730 1,047 2,117 Mexco 75.507 62,684 72,485 75,687 78,816 80,517 71,499 13,640 9,018 Nigeria .865 2,796 12,896 13,386 12,571 2,960 4,068 1,481 8,892 Philippines .914 11,969 11,839 11,063 10.719 11,059 6,801 2,463 4,258 Thai and 2,376 18,035 24,953 30,552 37.895 47,373 43,248 1,605 4,125 Turkey 16,705 22,230 23,094 24,425 29.305 26,820 22,975 7,657 3,845 Venezuela 25,240 9,032 19,475 20,158 18.585 17,493 5,927 4,769 1,566 Offshore bankingcenters 88,507 1 14,937 1 19,142 135,967 147,896 157,212 152,585 5,027 4,627 Oil exporters 167,188 76,696 185,856 187,950 136, 16 143,213 94,610 30,502 48,603 DRS reporters 122,416 32,264 139,563 142,242 87.674 88,922 56,609 27,207 32,313 DRS reporters 60 ,512 636,246 673,182 708,689 782,736 814,284 678,621 112,028 135,663 Note. See country classifications at the end of this statistica appendix, a. Most of these countres are a soincluded in the indebted country groups. Source: OECD, Bank for Internationa Settlements, Statistics on External Indebtedness. AUGUST 1995 21 STAT!STICAL APPENDIX TABLE A.2 COMMERCIAL BANK CLAIMS ON DEVELOPING COUNTRIES US$ millions Claims Liabilities Countr,y group or country 1993 1994QI 1 994Q2 1994Q3 1993 i994QI i 994Q2 i994Q3 All developing countries 698,999 708,664 728 309 733,897 550,560 549,034 563,567 593,379 EastAsiaand Pacfc 189,838 97,633 210,951 219,070 108,79 104,726 107,499 11 1,735 Europe and Central Asia 156,234 156,349 159,325 158,477 97,155 97,591 102,441 1 14,662 Latin America and the Caribbean 227,879 227,046 226,659 224,652 137,289 140,244 144,498 146,279 Middle East and North Africa 72,023 74,420 76,259 76, 92 136,128 131,847 131,949 138,180 South Asia 20,856 21,759 22,585 23,040 40,546 43,334 45,689 49,535 Sub-Saharan Afrca 31,598 31,457 32,530 32,466 30,477 31,292 31,49 32,988 Severely indebted middle-income 174,863 79,833 176,954 173,633 121,97 124,112 127,893 133,370 Angola 1,783 1,778 1,728 1,683 472 490 480 462 Argentina 29,628 29,034 30,757 31,346 18,600 18,804 17,983 8,604 Boliva 412 410 422 422 798 789 835 876 Brazi 68, 06 70,470 65,539 62,362 25,645 26,083 25,884 27,709 Bulgaria 6,461 6,389 6,233 3,682 1,225 1,167 1,339 1,526 Cameroon 1,312 1,293 316 1,311 517 656 615 587 Congo 1,029 1,081 ,080 1,026 297 309 293 299 Ecuador 3,100 3,105 2,957 2,963 2,484 2,469 2,36 2,553 Jamaica 497 443 475 433 633 620 679 662 Jordan 1,576 1,448 474 1,434 6,202 5,985 5,944 6,228 Morocco 4,934 5,130 5,294 5,211 5,791 5,728 6,146 6,534 Panama 30,577 31,388 3 ,899 34,576 35,776 36,867 37,922 38,620 Peru 3,092 3,231 3,318 3,461 3,931 4,160 6,297 6,418 Poland 1 1,694 11,984 11,978 066 6,993 7,268 7,89 9,075 Syrian Arab Republic 603 532 547 548 5,502 5,473 5,620 5,975 Uruguay 2,696 2,346 2,432 2,453 4,760 4,798 5,1 1 4,804 Severely indebted low-income 29,372 29,614 28,974 28,897 31,724 32,076 32,536 33,620 Moderately indebted low-income 22,648 23,519 24,039 24,124 39,479 42,491 45,6 7 47,204 Moderately indebted middle-income 270,081 269,622 273,047 274,524 139,009 140,431 140,614 147,379 Selected countriesa 360,340 367,569 381,165 388,924 227,347 226,277 232,31 1 239,780 Ageria 13,675 14,318 14,744 4,964 2,857 3,533 3,342 3,909 Chile 10,127 10,483 10,537 0,705 7,955 8,560 9,323 10,210 China 48,581 46,156 51,79 54,682 49,151 46,142 50,889 55,043 Colombia 7,948 8,127 8,825 8,962 7,220 7,608 7,96 8,238 C6te d'lvoire 2,265 2,243 2,107 2,151 2,014 2,102 2,054 2,510 Egypt 3,526 3,497 3,639 3,264 25,597 26,314 27,18 27,436 Hungary 7,314 7,307 7,390 7,752 2,322 1,651 1,693 1,751 India 13,921 4,821 14,826 14,937 7,743 9,184 9,826 10,180 Indonesia 37,201 38,016 37,826 39,473 2,576 12,295 11,303 1 1,484 Korea, Rep. of 45,217 47,399 52,049 54,768 5,200 15,162 17,369 17,297 Malaysia 16,020 17,994 17,719 15,608 19,236 7,899 14,995 13,232 Mexico 69,721 70,237 71,462 72,388 25,482 26,137 25,112 22,948 Nigeria 3,971 3,888 3,792 3,921 4,615 4,596 4,625 4,452 Philippines 6,607 6,70 6,361 6,290 5,806 6,252 5,907 6,012 Thailand 34,135 39,247 43,090 46,605 4,989 5,235 5,358 6,809 Turkey 22,839 21,783 19,626 7,858 15,110 13,584 14,606 17,485 Venezuela 17,272 15,352 15,381 4,596. 19,474 20,023 20,767 20,784 Offshore banking centers 1,070,414 1,1 14,349 1,141,626 1,145,583 904,639 928,820 968,107 997,001 Oil exporters 102,583 104,772 106,186 108,620 158,43 155,455 159,495 60,891 DRS reporters 55,448 53,101 53,036 53,802 41,906 42,577 42.878 43,110 DRS reporters 656,071 667,640 680,977 69 021 460,472 463,142 479,227 499,924 Note: See country classifications at the end of this statistica appendix. a. Most of these countries are also included in the indebted country groups. Source: Bank for International Settlements, Intemationol Banking and Financial Market Developments. 22 FINANCIAL FLOWS AND THE DEVELOPING COUNTRIES STATISTICAL APPENDIX TABLE A.3 COMMERCIAL BANK CLAIMS ON DEVELOPING COUNTRIES, BY COUNTRY OF ORIGIN US$ millions Conado Froncea Country group or country 1993 1994Q2 1994Q3 1994Q4 1991 1 992Q3 1992Q4 1 993QI All developing countries 17,489 15.732 5,425 6,225 78,7 2 85,008 77,821 77,192 EastAsia and Pacihc 1,969 2,081 2,047 2,424 14,303 17,026 15,012 16,979 Europe and Central Asia 490 503 519 310 16,932 18.917 18,251 16,736 LatnAmercaandtheCaribbean 14,128 12.289 11,861 2,533 17,399 8,292 17,184 16592 Middle East and North Africa 355 346 361 351 17,371 17,467 15,524 15,269 South Asia 438 385 465 444 1,939 2,523 2,169 2 142 Sub-SaharanAfrca 10 28 172 164 10,769 10.782 9,681 9,474 Severely indebted middle-income 3.981 3,743 3,646 3,666 23,418 24,134 22,549 21,517 Angola . .. .. .. 730 744 745 628 Argentna 680 682 703 727 2,335 2,298 2,350 2,099 Boliva .. I .. .. 18 18 19 18 Brazi 2 736 2,437 2,399 2,444 7,885 8,292 7.693 7,447 Bulgaria . . .. . 654 664 621 542 Cameroon .. .. .. 809 768 685 787 Congo . 697 714 669 508 Ecuador .. 164 152 167 125 Jamaca .. 14 2 10 7 Jordan . 1.020 095 746 740 Morocco .. . .. . 2. 99 2,296 2,157 1,986 Panama 234 269 82 230 2.530 2,596 2,623 2,627 PMen 73 76 78 89 640 629 571 508 Poland 259 279 284 75 321 1.425 1,308 1,288 Syrian Arab Repub ic .. 271 285 271 241 Uruguay 1.. 30 186 162 190 Severely indebted low-income . 6,874 7,331 6,478 6.146 Moderately indebted low-income 224 250 234 27 4,678 5, 81 4,404 4 308 Moderately indebted middle-income 3.8 15 4, 73 4,165 4,596 25,85 26,528 25,13 23,455 Selected countriesb 5,731 6,236 6,193 6,977 33,827 36 943 33,002 34,163 Algera 62 49 48 34 5,775 5,287 4,613 4,656 Chile 476 540 551 554 437 539 543 513 Ch na 255 304 33 485 3,769 4,645 4,5 2 5,716 Colomb a .. .. . .. 5 2 575 589 624 C6te d'lvoire .. .. . .. ,936 2,065 ,793 1,412 Egypt .. .. .. .. 2,437 2,364 1.972 1,851 Hungary .. .. .. 2 7 175 53 144 India 224 250 234 271 1,362 1,783 1.451 ,328 Indonesia .. . . .. 2,537 2,692 2,431 2,541 Korea, Rep. of 843 866 838 907 4,573 5,904 4,664 5,205 Malaysia 38 382 315 304 455 712 659 694 Mexico 2,3 2 2,595 2,577 3,000 2 357 2.849 2,610 2,669 Ngera .. 1,500 1.295 1,129 1,008 Philippines 266 260 247 305 1,389 894 811 731 Thailand 224 270 315 423 1,276 1,701 1,668 850 Turkey . 1,928 2,077 2,093 2,072 Venezuela 688 721 735 692 1,367 1,386 1,309 1,150 Offshore banking centers 0.602 10,272 1 1,562 1 1,907 35,166 42,766 40,286 38 450 Oil exporters 1.148 1,236 1,426 1,418 21,848 22,671 21,364 19,901 DRSreporters .097 1,119 1,299 1,279 17,114 7,633 16221 4,136 DRS reporters 2,314 11,788 11,782 12,212 68,657 74.763 68,084 68,609 (tcbie contrnues on next pcge, AUGUST 1995 23 STATISSTICAL APPENDIX TABLE A.3 COMMERCIAL BANK CLAIMS ON DEVELOPING COUNTRIES, BY COUNTRY OF ORIGIN (CONTINUED) US$ millions Germonyc Itoly Country group or country 1993 1994Q2 1 994Q3 i 994Q4 1992 1993Q4 1 994QI I 994Q2 All developing countries 140,475 155,695 160,139 156,689 18,164 18,129 18,572 18,268 East As;a and Pacific 17,049 21,096 22,445 24,152 84 56 82 52 Europe and Central Asia 62,229 68,080 67,952 64,400 8,958 8,347 8,195 8,099 Latn America and the Caribbean 33,580 34,282 33,928 33,128 5,452 5,479 5,581 5,523 MiddleEastandNorthAfrca 11,531 14,338 16,991 16,799 708 559 783 706 South Asia 7,798 9,281 9,677 9,267 2,145 2,573 2,729 2,806 Sub-Saharan Afnca 7,124 7,293 7,739 7,401 818 1, 14 1,202 082 Severely indebted middle-income 33,829 37,449 35,786 32,422 5,1 34 4,824 5,030 4,909 Angola Argentina 6,776 7,309 7,384 7,768 1,657 1,902 1,912 1,896 Bolivia 323 367 386 390 5 Brazil 11,041 10,607 9,775 9,028 827 7 14 830 800 Bulgaria 2,636 2,748 1,608 1,212 589 5 6 550 570 Cameroon 758 815 842 762 . Congo Ecuador 583 590 636 617 167 149 147 146 Jamaica Jordan 411 466 469 480 .. Morocco 1,039 1, 19 1,139 1,147 384 305 318 299 Panama 1,669 1,883 2,805 2,372 Peru 996 1,005 1,027 1,015 102 76 71 82 Poland 5,045 5,381 4,356 2,202 1,345 1,1 11 1154 060 Syrian Arab Republic 516 556 574 589 Uruguay 138 150 96 158 58 52 49 56 Severely indebted low-income 5,256 5,589 5,166 5,995 818 732 772 667 Moderately indebted low-income 9,963 10,839 1 ,267 11,544 90 94 98 Moderately indebted middle-income 62,777 67,139 69,093 67,533 9,234 8,697 8,660 8,550 Selected countriesb 48,531 53,585 56,005 57,035 3.752 3,495 3,497 3,342 Algeria 1,346 1,580 1,604 1,653 .. Chile 1,716 1,637 678 ,854 31 139 132 120 China 2,668 4,120 4,940 4,762 .. Colombia 1,205 1,435 1,475 1.604 141 104 70 79 CO5te d'lvo;re 342 362 373 358 2 7 42 14 Egypt 2,474 2,642 2,707 2,635 Hungary 3,191 3,684 3,905 4,036 214 189 177 195 India 5,472 5,973 6,271 6,592 Indonesia 4,560 5,042 5,677 5,98 .. Korea, Rep. of 3,736 4,665 4,858 5,402 .. Malaysia 1,659 2,042 1,966 1,929 .. Mexico 5,044 5,274 5,568 5,179 1,579 1,577 1.573 1,552 Nigeria 6 1 747 699 670 806 725 730 653 Philippines 704 894 826 900 84 56 82 52 Thailand 3.038 3,552 3,789 4,042 Turkey 8.166 7,490 7,278 7,284 Venezuela 2,597 2,445 2,392 2,154 786 697 692 678 Offshore banking centers 77,246 84,434 89,321 93,730 23,198 20,820 22,707 22,165 Oil exporters 4 399 14,282 17,035 16,189 7,891 7,356 7,357 7,206 DRS reporters 38,268 8,529 10,993 10,716 7,891 7,356 7,357 7,206 DRS reporters 96,442 137,755 143,016 139,560 8,961 8,681 8,907 8,650 24 FINANCIAL FLOWS AND THE DEVELOPING COUNTRIES STATISTICAL APPENDIX Nether/onds' Swirzeriorid Country group or country I,991 992 1993Q4 i994Q2 /989 /990 /99/ / 992 All developing countries 1 7,5 2 .291 22,902 27,123 20,185 24,358 23,632 23,769 East Asia and Pacific 2 650 3,326 3,9 15 4,705 1,359 1,877 2,246 2,604 Europe and Central A~sia 4,012 4,417 4,372 4,169 7,442 8,262 7,283 5,569 Lati n Ameorca and tne Cari bbean 7,280 9,512 0,334 13,585 6,382 7,905 8,273 9.498 Middle East and NorthnAfrica .934 1,782 2,027 2,016 2,169 2,768 2,836 3,1 64 South Asia 647 905 768 1,109 402 574 527 718 Sub-Saharan Africa 820 819 1,106 1,194 2,43 2,972 2.468 2,215 Severely indebted middle-income 3,91 2 5,002 6,085 8,719 9,1 13 1 0,665 0,044 9,504 Angola .... .73 97 63 106 Argentina 1,029 1,439 1,425 1.503 1,207 1.414 .471 1,604 Bo via . .. .0 .2 1 2 1 6 Brazil 1,32 2,003 2,772 4,582 2,197 2,862 2,8 12 2,821 Bulgaria ......444 482 445 248 Cameroon .... .46 6 1 51 43 Congo . ....2 2 4 1 Fcuador 301 257 360 455 72 107 /25 ~ 32 Jamaica 1.. .. 3 21 18 8 Jordan .....,89 93 93 106 Morocco .. ..103 151 162 131 Panama 433 403 465 608 4,005 4,331 3,782 3,295 Peru,. .. 354 84 108 142 172 Poland 392 353 404 484 379 449 479 443 Syrian Arab Repub .c .,. 35 23 15 19 Uruguay 437 546 659 732 101 108 79 /06 Severely indebted low-income 74 130 ..,1,717 1,829 1,940 1,826 Moderately indebted low-income ... . 378 1,024 1,297 1, 32 1,312 Moderately indebted middle-income 7,886 9,563 9,864 10.795 8,4 13 9,540 8,722 8,424 Selected countries' 7,005 8,837 9,738 I 1.789 6,540 8,444 8,402 9,692 Algeria 765 688 742 729 301 338 307 298 Ch e 398 668 625 820 93 304 376 624 Ch na 413 435 582 829 276 363 438 495 Colomba 277 537 6 3 764 94 181 68 291 C8te d'lvoire .,. .III 04 II / 00 Egypt . ... 454 504 416 383 Hungary .. ..297 294 118 63 Inoia .,. 378 250 379 275 417 Iroones a ,.3 18 .659 1,768 1,916 89 246 193 317 Korea, Rep. of 467 775 670 848 336 584 712 775 Maaysra , .58 79 172 ISO Mexico 853 2, 68 1,704 2,257 1,322 1,716 .864 2,369 Nigeria ......311 320 3/. 200 Philippines ... 31S 481 199 178 144 121 Thai and 451 458 580 630 267 40 552 633 Turkey 545 73 1,308 190 1,202 .865 1,579 1,617 Venezuela 517 719 831 947 579 587 665 839 Offshore banking centers 0,492 1 2,305 I .289 14.087 17,929 20.856 20,194 8,826 Oil exporters 3,1 55 3,984 3,237 3.008 6,294 6.381 6,1 55 5,291 DRS reporters 2,705 3,28 2,834 2.654 4,305 4.6.2 4,131 2,942 DRS reporters 11,520 14,723 1 6.323 2 .081 18,320 22,384 22 I127 23,264 (ruDie ccronues on nent Poge) A r I 9J 25 ,cA,AT STItC.AL APPENDIX TABLE A.3 COMMERCIAL BANK CLAIMS ON DEVELOPING COUNTRIES, BY COUNTRY OF ORIGIN (CONTINUED) US$ millions United lingdom' United Statesa Country group or country 1990 1991 1992Q4 1993Q4 1993 1994Q3 1994Q4 1995Q I All developing countries 45,560 46,495 45,689 53,300 81,643 88,328 46,669 84,716 EastAsiaand Pacific 5,017 5,956 6,066 10,100 13,962 14,746 2,541 16,547 Europe and Central Asia 10,155 9,736 9,355 10,043 5,452 5,521 6,387 6,074 Latin America and the Caribbean 16,903 17,527 18,061 21,365 55,648 61,190 34,661 55,613 Middle East and North Africa 4,347 4,203 3,425 4,205 3,119 3,295 1,775 2,693 South Asia 1,700 1,698 1,814 1,775 1,398 1,705 .747 Sub-Saharan Africa 7,084 6,766 6,832 5,766 2,064 1,87 1,305 2,042 Severely indebted middle-income 13,031 11,814 11,510 3,3 1 6 23,547 27,930 22,992 25,135 Angola 33 22 30 64 .. Argentina 2,352 2,738 2,797 3,088 9,742 0,541 9,970 10,7 0 Bolivia 8 6 17 49 30 85 9 93 Brazil 4,694 4,104 4,274 5,572 9,532 13,083 11,683 10,122 Bulgaria 473 233 191 231 99 41 103 64 Cameroon 71 78 64 47 5 12 I 0 Congo 37 39 39 41 Ecuador 546 514 471 474 491 516 593 559 Jamaica 68 71 76 68 143 155 176 157 Jordan 382 357 270 302 III 82 77 Morocco 401 351 368 263 548 566 473 Panama 1,191 1,061 1,148 1,419 653 638 721 Peru 276 342 226 302 404 506 .. 545 Poland 1,279 1,188 1,000 879 367 343 342 312 Syrian Arab Republic 69 58 42 3 41 5 .. 2 Uruguay 237 185 227 25 1,316 1,309 .. 1,243 Severely indebted low-income 3,420 2,792 2,314 2,208 1,214 1,006 299 1, 64 Moderately indebted low-income 2.527 2,770 2,592 2,652 1,148 1,704 . 1,683 Moderately indebted middle-income 17,812 18,943 9,305 21,884 41,639 42,925 18,480 39,926 Selected countriesb 18,570 19,988 19,877 25,679 49,478 51,629 15,953 50,250 Algeria 760 921 685 412 533 854 499 551 Chile 567 704 582 729 3,422 3,643 3,848 3,698 China 1,025 1,031 942 2,369 730 758 ,1 8 Colombia 643 613 647 810 2,196 2,520 2,760 2.777 C6ted'lvoire 247 155 162 123 40 47 .. 30 Egypt 650 594 430 726 127 120 . 137 Hungary 330 299 268 226 358 341 32 339 India 1,219 1,164 1.207 1,162 674 1, 63 .. ,328 Indonesia 1,021 1,231 1,253 2,031 2,580 2,464 2,541 2,293 Korea, Rep. of 1,343 1,842 1,827 2,281 4,367 5,060 .. 6,699 Malaysia 484 605 689 ,094 1,257 .120 .. 944 Mexico 4,909 5,611 5,943 7,012 19,561 2 .372 .. 19,496 Nigena 1,065 702 477 375 458 199 182 241 Philippines 797 717 761 885 2,499 2,377 .. 2,567 Thailand 228 424 485 1,310 2,529 2,967 .. 2,926 Turkey 1,142 1,134 1,053 1,658 1,849 1.600 1,216 1,159 Venezuela 2,140 2,241 2,466 2,476 6,298 5,024 4,586 3,947 Offshore banking centers 28,235 25,943 24,063 47,343 25,966 26.198 . 26,295 Oil exporters 0,864 10,096 9,793 10,161 10,364 8 999 7,261 7,223 DRS reporters 8,066 7,861 7,705 6,919 7,888 6,61 1 5,595 5,187 DRS reporters 35,174 36,183 35,850 43,765 75,466 82,473 40,468 78,343 Not avaiable. Note: This table shows the latest available data from each major cred tor country. Recent data are not availab e for Japan. See co untry classificat ons a th e end of this statistical appendix. a. Consolidated claims of banks and their worldwide operations. b. Most of these countr es are also ncluded in the indebted country groups. c. Partly consolidated aggregate claims of banks and their wordwide operations. Source: Banque de France, Bulletin Tnmestreil Deutsche Bundesbank, Zohlungsbilanzstatostik; Banca d'ltal a, Bolletino Economico; De Nederlandsche Bank, Quarterly Bulletin; Banque Nationale Suisse, Les Banques Suisses; Bank of EngJand, Stotisticol Abstrrct, Part l; Federal Financial instiutions Examination Counc 1, U.S. Country Exposure Lending Sunvey. 26 FINANCIAL FLOWS AND THE DEVELOPING COUNTRIES S'TATISTICAL APPENDIX TABLE A.4 MATURITIES OF BANK CLAIMS ON DEVELOPING COUNTRIES JS$ mdlucns 1994Q2 More thon Less than I year ond less More thon Estimated Short-term Co.ntry group or country 1993 Total I year then 2 yeas 2 yeers Unollocated short-term (% of total) Alldevelopingcountries 582,375 613,744 325,249 42,375 218,233 27,887 28 996 46 EastAsiaanc Pacific 152490 17 ,871 107,242 11,043 43,606 9,980 96,953 56 Europe and Central Asia 142 627 146,455 63,895 13.932 60,311 8,317 49,105 34 LatnAmercaandthe Carbbean 192791 94,582 100,949 8,764 78,696 6,173 9 ,949 47 Middle East and North Afrca Sl 043 54,695 28,816 5,264 19,527 1,088 23.099 42 South Asia 4 645 16,759 7 814 1,340 6,989 616 6.725 40 Sub-Saharan Afr ca 28,779 29,382 6,533 2,032 9,104 1 713 14,165 48 Severely indebted middle-income 51 863 154,663 82,244 7,339 60.236 4,844 73,041 47 Angola 1,678 739 1,038 192 445 64 804 46 Argentina 30,357 31,005 17,563 1,658 0,7 16 1,068 16,850 54 Bolvia 249 311 243 5 27 36 235 76 Brazl 54 175 52, 84 28,844 1.571 9,592 2,177 25,363 49 Bulgara 6 682 6,138 4,098 170 1,685 185 3,675 60 Cameroon ,191 1,153 500 85 453 5 362 31 Congo 675 735 407 69 255 4 340 46 Ecuador 2,829 2,919 739 10 ,0 0 69 1,490 51 Jairmaica 401 386 70 23 140 53 147 38 Jordan 1,264 126 650 84 34 SI 557 49 Morocco 4,569 4.847 1,447 374 3,019 7 930 19 Panama 22,228 24,015 11,29 512 1 0,560 652 9,954 4 Peru 2,605 2,996 2,159 57 702 78 2,095 70 Poand I 1.546 1,541 4,576 758 5,918 289 3,456 30 Syrian Arab Repub Ic 463 472 377 36 52 7 348 74 Uruguay 3294 3,320 2.2 0 58 1,061 -9 2.116 64 Severely indebted low-income 23,655 24,350 10,584 2,030 10,455 1,281 8,738 36 Moderately indebted low-income 18,966 20 846 0,490 1,837 7,873 646 8,843 42 Moderately indebted middle-income 238,325 246,016 110,207 2 ,899 104,502 9,408 89,236 36 Selected countriesa 300,224 323,788 175,237 22.843 0,218 15,490 154,254 48 Ageria 14.093 4,801 5,529 2,322 6,767 83 3,207 22 Chile 0,035 10,438 5443 613 4,246 36 4,954 47 China 32,538 35,096 4,465 2,740 14,697 3 94 1 924 34 Coombia 7,421 8,718 3 976 750 3,796 96 3,404 39 C(te dIvoire 2,103 2,033 1,697 57 249 30 1,637 81 Egypt 3,467 3,566 2,292 375 710 89 1,866 52 Hungary 7,485 7.827 2,260 889 3,524 1, 54 1,170 I5 India 1 1,091 2,359 5,055 1 101 5,843 360 4 209 34 Indonesia 29,866 30,880 18,815 2.944 8,249 872 16 022 52 Korea, Rep. of 40.295 47,783 34,748 2.679 6,549 3.807 32,676 68 Maaysma 2607 13,858 8 194 475 4,270 919 7,609 55 Mexico 55,257 58,282 28,4 3 2,919 25,27 1,679 26,029 45 Nigeria 3,679 3,437 .428 330 1,628 S 1,008 29 Ph ipp nes 5,633 5,922 2,646 283 2,745 248 2,303 39 Thai and 29,123 36.501 27, 47 1,778 6.682 894 25,326 69 Turkey 19,383 17.287 8,747 1,901 5.302 1,337 7,035 41 Venezuea 16,148 5,000 4,382 687 9,690 24 3,875 26 Offshore banking centers 506,237 574,408 473,745 14,056 71,457 15,150 461. 71 80 Oil exporters 123.6 6 28,629 57,52 2,786 56,400 1,922 44,531 35 DRS reporters 98,654 98,995 37 140 11, 41 49,433 ,281 26,140 26 DRS reporters 507,356 533,629 288,526 34,387 18/,123 23.593 254,624 48 n1ote See country classifications at the end of this statist cal appendix. a. Most of these countries are also indcded n the indebted country groups. Source Bank for International Settlements The voatLurty crd Sectoral Distribution of Internot,ono Bonk Lending. AUGUST 1995 27 S7;A i$T!CAL APPENDIX TABLE A.5 FUNDS RAISED ON INTERNATIONAL CAPITAL MARKETS U5$ mnillions Country group or countcry i990 199 1 i992 993 1993Q4 ~994QI 1994Q2 i 994Q3 1994Q4 1 995Q I All developing countries 31,835 40,120 41,562 78,257 25,463 9,654 16,8304 19,614 20,072 1 6,997 Bonds 7,846 13,847 22,335 57,020 2 290 14,464 9,344 1i,041 14,361 5,461 Internat onal 5,841 9,923 14,362 40,265 14,931 11,003 7,763 7,03 11,271 3,797 Foreign 2,005 3,924 7,974 16.756 6,360 3,461 1,58 4,010 3,090 1,664 Loans 23,988 26,273 19,226 21,237 4,172 5,1 90 7,461 8,574 5,711 11,536 International 23,288 26,043 18,981 21,040 4,172 5,190 7,46 8,479 5,711 11,536 Foreign 701 231 245 197 ..95 East Asia and Pacific 13,983 17,344 15,897 26,612 9,118 9,289 8,400 10,812 6,597 8,033 Europe ano Central Asia 10,247 7,191 9,642 20,264 6,537 2,535 3,407 3,609 4,081 4,718 Latin Amnerica and the Caribbean 4,358 8,708 9,518 27,338 8,959 6,1 16 3,797 3,329 7. 96 995 Middle East ano North Africa 128 4,861 3,070 337 . 5 13 300 i 8 272 259 South Asia 1,720 322 201 567 4l2 509 235 594 3 18 644 Sub-Sanaran Africa 756 689 1,273 102 90 492 65 300 1,007 906 Severely indebted middle-income 279 2,418 5,053 13,075 5,596 3,223 1,242 1,264 4,806 563 Angola 1 15 .. 325 1 2 . . Argentina .. 725 , ,529 6,473 3,440 1,410C 9 14 819 2,572 405 Bolivia I.. . .. 0 . Brazil ,. 1,480 3,010 6,449 2,155 1,171 288 425 2,128 l58 Bulgar a Cameroon 100 . .. Congo .. . .492 Ecuador.. .... Jamaica .. 30... Jordan Morocco 52 .. 60 . Panama Peru .. . .40 40 20 Poland ..5 9 ,.. .3 Syrian Arab Republic.. , . . Uruguay 12 104 120 140 .. 100 ... 103 Severely indebted low-income 385 lOS 116 72 ... 65 ... 0 Moderately indebted low-income 1,876 492 316 657 502 509 235 612 318 644 Moderately indebted middle-income 19,782 i18,490 16,4 9 34,693 11l,531~ 6,656 5,745 7,493 7,5 17 3,595 Selected countriesa 22,826 27,384 26,863 5 1,999 16,886 14,068 1 1,286 4,305 10,257 9,362 Algeria .. 61 . .. .. Ch le 285 .. 350 775 100 .. 80 ,. 245 China 1,5 14 2,595 4,043 6,756 1,082 2,549 1,567 2,603 ,378 ,582 Coiombia .. 200 621 240 250 15O 125 647 50 C6te d Ivoire....... .. Hungary 987 1,378 1,446 5,071 2,041 233 242 967 1,099 252 India 1,242 226 201 475 320 509 190 594 168 644 Inoonesia 5,462 5,639 2.641 3,726 691 1,354 1,518 2,1 83 1,144 1,440 Korea, Rep. of 3,982 6,437 5,204 7,719 3,48 1,656 2,047 2,856 1,413 3,23 Malaysia 730 512 1,27 1 1,6 292 801 1,422 903 400 Mexico 2.350 5,568 3,374 9,751 2,71 1 3,085 2,305 1,790 1,346 [37 Nigeria Phi ippines 715 . .. 1,250 805 154 305 342 364 Thai and 1,465 1,907 2,718 5,550 1,767 2,637 1,451 ,925 1,897 ,781I Turkey 2,498 2,280 4,580 5,763 2,169 842 9 Venezuela 1,595 58 1,035 2,93 1 187 ... . 400 Offshore banking centers 4,634 2,491 2,058 9,476 5,492 1,362 745 2,6 4 2,852 851 Oil exporters 6,862 5,923 4,445 3,503 312 792 .,047 190 788 168 DRS reporters 4,961 1018 l460 3,1 57 312 492 300 190 516 OECD countries 308,764 368,375 392,920 5 10,550 105,205 25,069 101,745 131,452 139,944 1 53,078 Multilatera institutons 5,418 15,000 20,874 20,71i 4,041 3,042 2,019 2,743 4,569 2,257 Other 644 006 1,961 3,037 346 200 600 953 601 1,442 Totalb 361,489 432,470 458,275 6 19,986 140,71 1 149,487 123, 29 157,429 1 67,96 1 173,182 I.Not availab e. Note. See country classifcations at tne end of this statistical appendix. a. Moot of these countries are also incluced in tne ndebted country groups, b. Includes al developing countries, offshore banking centers, OECD countries, mu ti ateral institutions, and the category 'other.' Source: OECD, Finuncie Stotintics Monthiy Part I. 28 .FINANCIAL FLOWS AND THE DEVELOPING COUNTRIES STATISTICAL APPENDIX TABLE A.6 SECONDARY MARKET DEBT (BID) PRICES Percentoge of foce value Country group or country l992Q4 l 993Q I I993Q2 l 993Q3 1993Q4 1994Ql l 994Q2 l994Q3 l994Q4 1995Ql l 995Q2 Severely indebted middle-income Angola 22 20 18 lB lB 20 20 lB S1 Argentina' 48 50 53 61 69 52 50 5 1 41 40 47 Bolivia 16 16 1 6 . .. . Brazil' 30 30 39 46 53 .. 41 44 40 36 44 Bulgaria 13 14 21 26 41 35 25 45 45 42 49 Cameroon 12 13 14 1 3 IS5 23 16 17 10 Congo 6 6 B 9 9 13 13 13 1 1 Ecuadorc 28 27 32 34 52 40 40 33 29 27 50 Jamaica 71 76 79 76 76 85 83 83 83 .. 82 Jordan 35 35 35 44 52 48 47 48 42 35 35 Morocco 47 52 67 72 8 1 64 72 72 66 58 63 Panama 29 30 32 38 61 54 49 59 53 .. 48 Peru 19 24 32 43 68 46 48 60 56 5i 56 Poland 25 28 32 35 50 32 35 37 33 3 1 37 Uruguay' 75 65 72 80.. .... Other selected countries Albania . ..5 5 10 12 16 16 16 16 Algenia 91 95 100 64 48 43 46 30 28 28 Chile 91 92 93 94 95 94 95 95 95 CostaRica' 60 64 68 75 82 69 66 66 66 SI Cdte d'lvoire 5 6 8 13 18 20 lB 19 lB IS IS Egypt 45 46 46 46 46 46 46 47 48 48 48 Honduras 35 31 31 31 31 34 39 36 36 27 Mexico' 65 70 73 76 84 69 63 66 53 47 56 Nicaragua 7 8 10 10 10 9 8 8 6 ..5 Nigeria 39 42 42 53 60 42 40 39 39 37 42 Philippinesf 57 64 68 77 82 66 63 65 59 59 66 Senegal .. 23 .. 32 38 34 31 36 36 .. 35 Venezuela' 57 59 68 70 74 49 49 49 45 43 49 Not avai able. a. Guaranteed Refinancing Agreement (GRAQ. Pr ces after March 1993 refer to par bonds offered unbaer the Brady nitiative. a. Multi-Year Deposit Facility Agreement (MYDFA). Prices after AprI1 1994 refer to par bonos offered under the Bracy -itat ve. c. Multi-Year Refinancing Agreement (MYRA). d. Prices refer to par bonds offered under tne Brady initiative. e. Prices refer to Series A par bonds offered under the Brady initiative. f. Public sector restructured debt, including Central Bank of the Philippines. Pr cea refer to restructured loans offered under tse Brady initiative. Source: Salomon Brothers, Euroweek, LDC Debt Report, Intemnotiono/ Finoncing Review, and World Bank data. AUGUST 1 995 29 STATISTICAL APPENDIX TABLE A.7 EMERGING STOCK MARKETS Morket capitalization Value of stock traded Price eamings ratio (US$ millions) (US$ millions) (percent) Economy i994Q3 1994Q4 i995Q1 1994Q3 1994Q4 1995Qi 1994Q3 1994Q4 1995Qi Argenbtna 47,188 36,864 32,374 2,068 ,864 1,469 27 18 15 BrazI 194.410 189,281 132,139 28,417 36.256 20,079 20 13 9 Chile 62,735 68,195 65,937 1,273 1,830 1,866 24 21 20 China 54,482 43,521 43,832 50,919 20,932 5,664 . . 0 Colombia 16,105 15,446 16,826 614 491 345 25 20 13 Greece 14,055 14,921 15,397 945 I,028 801 0 10 10 Hungary 1,536 1,604 1,263 67 50 61 63 55 449 India 133,943 127,515 105,735 6,578 6,436 3,039 37 27 21 Indonesia 43,976 47,241 44,164 2,809 3,097 2,972 22 20 18 Jamaica 1,418 1,753 2,110 41 32 79 7 8 9 Jordan 4,714 4,594 4,616 140 102 101 21 21 20 Korea, Rep. of 183,295 191,778 178,339 61,140 92,97 47,853 36 34 32 Malaysiaa 229,272 199,276 205,520 43,61 1 24,908 17,999 35 29 28 Mexico 204,933 130,246 75,069 23,027 15,885 9,31 1 1 9 1 7 58 Nigeria 2,418 2,711 881 3 3 6 5 6 7 Pakistan 12,969 12,263 10,274 844 794 778 25 23 18 Peru 8,022 8,178 7,472 623 880 547 60 44 28 Philippines 52,570 55,519 45,747 4,382 4,300 2,856 33 31 29 Poland 3,219 3,057 2,853 1,050 694 459 18 13 7 Portugai 15,591 16,249 17,414 1,171 1,761 1,063 22 20 19 South Africa 204,781 225,719 232,741 3,696 3,426 0 21 19 SriLanka 3,328 2,884 2,612 167 97 70 27 18 14 Taiwan (China) 222,988 247,325 234,386 223,878 169,581 1 14,378 35 37 33 Turkey 20,990 21,605 27,887 6,406 6,500 8,747 26 31 18 Venezuela 4,512 4,11 1 3,668 97 60 80 14 18 16 Zimbabwe 1,983 1,828 1,640 26 33 31 12 10 7 Not available. a. Data for Malaysian-incorporated companies only Source International Finance Corporation, Emergng Stock Markets Factbook. 30 FINANCIAL FLOWS AND THE DEVELOPING COUNTRIES STATISTICAL APPENDIX TABLE A.8 FOREIGN DIRECT INVESTMENT FLOWS (US$ millions) 1986 1987 9 988 i989 1990 199/ i 992 1993 1994a All developing countries 10,253.3 14,576.1 21,181.7 25,687.1 26,711.7 36,810.1 47,076.4 66,614.0 77,918.4 EastAsia and Pacific 3,550.4 4,508.8 7,610.9 9,094.5 11,071.1 13,960.7 20,887.4 36,504.5 42,717.0 Europe and CentralAsia 844.1 1,302.3 2,260.4 3,480.9 4,711.7 7,011.5 8,529.7 9,630.7 11,133.9 Latin America and the Caribbean 3,672.2 5,790.9 7,955.2 8,155.1 7,937.5 12,288.8 13,631.3 16,139.3 18,875.0 Middle East and NorthAfrica 1,241.6 1.160.0 1,882.8 1,965.7 1,596.7 1,211.2 1,582.8 1,716.8 2,107.0 South Asia 261.7 409.6 326.3 486.9 540.3 456.5 622.8 840.9 845.0 Sub-Saharan Africa 683.3 1,404.5 1,146.1 2,504.0 854.4 1,881.4 1,822.4 1,781.8 2,240.5 Severely indebted middle-income' 1,347.9 1,816.9 4,646.6 2,870.1 2,983.4 5,009.5 7,558.8 10,448.1 11,032.0 Angoia 234.0 1 19.0 131.0 200.0 -334.8 664.5 288.0 300.0 Argentina 574.0 19.0 1,147.0 1,028.0 1,836.0 2,439.0 4,179.0 6,305.0 Bolivia 10.0 38.1 10.1 -24.4 27.2 52.0 93.1 150.0 Brazil 320.0 1,225.0 2,969.0 1,267.0 901.0 972.0 1,454.0 802.0 Bulgaria 0.0 0.0 0.0 0.0 4.0 56.0 42.0 55.4 Cameroon 19.0 12.0 67.3 87.0 57.0 -16.7 17.3 -81.0 Congo 22.4 43.4 9.1 0.0 0.0 0.0 0.0 0.0 Ecuador 70.0 75.0 80.0 80.0 82.0 85.0 95.0 115.0 Jamaica -4.6 53.4 12.0 57.1 137.9 127.0 86.5 139.2 Jordan 22.8 39.5 23.7 1.3 37.6 11.9 40.7 33.5 Morocco 0.5 59.6 84.5 167.1 165.1 319.9 423.6 522.4 Panama 62.2 56.8 -51.7 36.6 17.6 -30.3 1.8 -41.2 Peru 22.0 32.0 26.0 59.0 41.0 7.0 127.0 349.0 Poland 16.0 12.0 15.0 11.0 89.0 291.0 678.0 1,715.0 Syrian Arab Republic 65.0 7.0 121.0 74.0 71.0 62.0 67.0 70.0 Uruguay 37.0 50.1 46.8 0.0 0.0 0.0 0.0 75.8 Severely indebted low-income 227.8 1,043.5 570.7 2,256.4 1,071.2 1,101.2 1,309.1 1,375.6 1,588.5 Moderately indebted low-income 1,487.2 1,286.9 1,470.6 1,748.0 1,214.5 687.3 983.8 1,188.5 1,210.0 Moderately indebted middle-income 3,682.0 5,750.8 6,402.4 8,250.2 8,237.4 1,3825.0 13,994.7 15,661.5 19,308.0 Otherselected countriesc 7,478.6 10.166.2 12,505.4 18,032.5 17,049.9 24,649.4 30,726.0 47,494.4 55,878.0 Algeria 5.3 3.7 13.0 12.1 0.3 1 1.6 12.0 15.0 Chile 116.0 230.0 141.0 1,289.0 590.0 523.0 699.0 841.0 China 1,875.0 2,314.0 3,194.0 3,393.0 3,487.0 4,366.0 1 1,156.0 25,800.0 Colombia 674.0 319.0 203.0 576.0 500.0 457.0 790.0 850.0 C6te d'lvoire 70.7 87.5 51.7 18.5 31.6 80.8 77.1 30.4 Egypt 1,217.4 947.7 1,190.0 1,250.2 734.0 253.0 459.0 493.0 Hungary 0.0 0.0 0.0 0.0 0.0 1,462.1 1,479.2 2,349.0 India 1 18.0 212.0 91.0 252.0 238.0 141.0 151.0 273.0 Indonesa 258.0 385.0 576.0 682.0 1.093.0 1,482.0 1,777.0 2,004.0 Korea, Rep. of 435.0 601.0 871.0 758.0 715.0 1,1 16.0 550.0 516.0 Malaysia 488.9 422.7 719.4 1,667.9 2,332.5 3,998.5 4,469.3 4,351.0 Mexico 1,523.0 3,246.0 2,594.0 3,037.0 2,632.0 4,762.0 4,393.0 4,901.0 Nigeria 166.8 602.7 376.9 1,882.3 587.9 712.4 896.6 900.0 Philippines 127.0 307.0 936.0 563.0 530.0 544.0 228.0 763.0 Thailand 262.5 351.9 1,105.4 1,775.5 2,443.6 2,014.0 2,115.8 2,400.0 Turkey 125.0 115.0 354.0 663.0 684.0 810.0 844.0 636.0 Venezuela 16.0 21.0 89.0 213.0 451.0 1,916.0 629.0 372.0 Not available. Note: See country classificatons a the end of this statistical appendix. Table includes data for 154 developing countries of which 137 report to the World Bank Debtor Reporting System. a. Estimate. b. Aggregate total includes non-DRS economies. c Most of these countries are also included in the indebted country groups. Source. World Bank Debtor Reporting System, IMF data. AUGUST 1995 31 STATISTICAL APPENDIX COUNTRY GROUPS East Asia and Pacific Former Yugoslavia* Colombia* Iraq** Ethiopia* American Samoa Georgia* Costa Rica' Jordan* Gabon' Cambodia- Gibraltar** Cuba** L bya*' Gambia, The* China* Greece- Dominica* Morocco* Ghanea Fiji* Hungary* Dominican Republic* Oman* Guinea* Guam Isle of Man Ecuador* Saudi Arabia** Guinea-Bissau' Indonesia* Kazakhstan* El Salvador* Syrian Arab Republ c* Kenya* Kiribati* Kyrgyz Republ c* 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 Mali' Malaysia* Malta* Guyana* Afghanistan** Mauritania* Marshall Islands Moldova' Haiti* Bangladesh* Maurit us* 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* PaSstan* Nigeria* Philippines* Slovenia* Paraguay* Sr Lanka* 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* Viet Nam** Ukraine* St. Lucia* Botswana* Seychelles* Westem Samoa* Uzbekistan* St. Vincent' Burkina Faso* Sierra Leone* Suriname** Burundi* Somalia* Europe and Latin America and Trnidad and Tobago* Cameroon* South Africa** Central Asia the Caribbean Uruguay* Cape Veroe* Sudan* Albania* Antigua and Barbuda" Venezuela* Central African Republic* Swaziland* Azerbaijan' Argentina' Belarus* Aruba Middle East Chad* Tanzania Bulgara* Belize* and North Africa Comoros* Togo* Croatia* Bolivia* Algena* Congo* Uganda* Czech Republic' Brazil* Egypt, Arab Rep. of* C6te d'lvoire* Zare* Estonia* Chile* Iran, Islamic Rep. of* Djibouti* Zambia* Equatorial Guinea* Zimbawe Severely indebted Syrian Arab Republic Madagascar Moderately indebted Antigua and Barbuda** middle-income Uruguay Mali low-income countriesa Chile countries',' Mauritania Albania Colombia Angola Severely indebted low- Mozambique Bangladesh Costa Rica Argentina income countriesa Myanmar Ben n Dominican Republic Bolivia Afghanistan- Nicaragua Chad Gabon Brazil Burundi Niger Comoros Gibraltar"* Bulgaria Central African Republic Nigeria Egypt, Arab Rep. of Greece** Cameroon Cote d'lvoire Rwanda Gambia, The Hungary Congo Equatonal Guinea Sao Tome and Principe India Indonesia Cuba** Ethiopia Sierra Leone Malawi Mexico Ecuador Ghana Somalia Nepal Papua New Guinea Iraq** Guinea Sudan Pakistan Philippines Jamaica Guinea-Bissau Tanzania Togo Russian Federation Jordan Guyana Uganda Zimbabwe Senegal Morocco Honduras Viet Nam" Tunisia Panama Kenya Yemen Moderately indebted Turkey Peru Lao P.D.R. Zaire middle-income Venezuela Poland Liberia Zambia countrieSa Westem Samoa Algeria Offshore banking Hong Kong Vanuatu* Congo' Oman* centers' Lebanon* Former Soviet Union* Qatar Bahamas Liberia* Oil exporters Gabon* Saudi Arabia* Bahrain** Macao** AJgena* Iran, Islamic Rep. of* Trinidad and Tobago* Barbados* Netherlands Antilles** Angola* Iraqc- United Arab Emirates Bermuda Panama* Bahrain** Libya"* Venezuela* Cayman Islands Singapore Brunei Nigeria* * DRS reporter. *1 Non-DRS economy. The remaining countries include selected high-income and non-OECD middle-income countries. The Debtor Reporting System (DRS), set up in 195 1 to monitor statstics on the extema debt ofdeveloping countries, is maintained bythe staffofthe International Finance Division ofthe World Bank's International Economics Department. The World Bank is the sole repository for these statistics on a loan-by-loan basis. 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