Global Development Finance 2003: Striving for Stability in Development Finance, Volume 1

Since the late 1990s, an essential shift has taken place in the pattern of private sector financial flows to developing countries. Debt flows have fallen sharply, while equity flows--primarily in the form of foreign direct investment--have remained comparatively robust. The shift from debt to equity ought to diminish the volatility of developing countries' external finance and improve their access to technology, markets, and management expertise. However, much more needs to be done to put development finance on a stable basis. The report finds that an actual global business cycle has emerged with the continuing integration of developing countries into global production, trade, and financial flows. Economic conditions in rich countries now tend to be mirrored in developing countries through strengthened trade links, just-in-time logistics, and stronger financial relations with affiliates and suppliers in middle-income countries. Global Development Finance 2003 is unique in its depth of coverage of the issues related to international development finance. By putting all development-related flows in a consistent framework, the publication will allow government officials, economists, investors, financial consultants, academics, bankers, and the entire development community to better understand, manage, and promote the key challenges of financing development.