Effects of the Global Financial Crisis on Developing Countries and Emerging Markets

Veranstaltungsart
Konferenz

Ort / Datum
Berlin, 11.12.2008

organised by Capacity Building International (InWEnt), Deutsches Institut für Entwicklungspolitik German Development Institute on behalf of the

German Federal Ministry for Economic Cooperation and Development (BMZ)

aSince the financial crisis spilled over from the US and hit Europe with full force in September 2008, the effects of the crisis have become increasingly felt also in developing and emerging countries. Although it remains unclear for the time being how stark the consequences for developing and emerging countries will be, it has become evident that a decoupling from the industrialised world has not taken place.

Still there remains some hope that growth in major emerging markets like China and Brazil will, despite crisis-related slowdowns, remain robust and thus help to stabilise the world economy. There are several transmission channels by which the financial crisis is spreading around the world. With liquidity drying up and financial institutions around the world being under stress and withdrawing funds from wherever they can to remain liquid, it has become difficult if not impossible for many countries to refinance themselves in international financial markets. Capital flows to many developing and emerging countries have dried up or even reversed, putting depreciation pressure on exchange rates and raising the cost of credit. Moreover, with recession looming in the industrialised world – which accounts for more than sixty percent of world output – exports from developing and emerging countries will take a hit. A slowdown of world growth will also affect energy and commodity prices, which will hurt energy and commodity exporting countries while importers will get some relief. Last but not least, the crisis has already affected remittance flows from industrialised to developing countries, an important source of income for many countries. Against this backdrop, the conference brought together experts from academia, government and international organisations to discuss the impacts of the global financial crisis on developing and emerging countries, and on vulnerable groups in these countries in particular. It also provided a platform for discussion of appropriate policy responses, both short term to avoid hardship among vulnerable groups as well as reform-measures aimed at preventing future crises.

Hinweis

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