The global financial crisis and developing countries

December 2008
Status: 
Active
Leaders: 
Dirk Willem te Velde
Team: 
Isabella Massa, Massimiliano Cali, Jodie Keane, Mareike Meyn, Milo Vandemoortele, Jane Kennan, Anna McCord, Kate Bird, Luis Carlo Jemio and Osvaldo Nina, Grupo Integral S.R.L, INESAD, Bolivia, Olu Ajakaiye, African Economic Research Consortium, Oluwatayo Oni Fakiyesi, University of Lagos, Nigeria, Hossein Jalilian, Chan Sophal, Glenda Reyes, Saing Chan Hang, Phann Dalis and Pon Dorina, Cambodian Development Policy Research Institute, Cambodia, Mustafizur Rahman, Debapriya Bhattacharya, Md. Ashiq Iqbal, Towfiqul Islam Khan, Tapas Kumar Paul, Centre for Policy Dialogue, Bangladesh, Sarah Ssewanyana, Lawrence Bategeka, Evarist Twimukye, Winnie Nabiddo Economic Policy Research Centre, Uganda, Amoussouga Gero Fulbert, Professor, Université d'Abomey-Calavi, Benin, Manenga Ndulo, Dale Mudenda, Lutangu Ingombe, and Lillian Muchimba, Department of Economics, University of Zambia, Francis Mwega, Department of Economics, University of Nairobi, Ira Setiati Titiheruw, Hadi Soesastro and Raymond Atje, Centre for Strategic and International Studies, Indonesia, Charles Ackah, Ernest Aryeetey, Ellen B-D. Aryeetey, Institute of Statistical, Social and Economic Research (ISSER), University of Ghana

The global financial crisis that emerged in the financial sector in developed countries has spread to the real sector in both developing and developing countries. ODI’s Investment and Growth Programme has conducted research on the global financial crisis since October 2008.

Overview

The global financial crisis that emerged in the financial sector in developed countries has spread to the real sector in both developed and developing countries. ODI’s Investment and Growth Programme has conducted research on the global financial crisis since October 2008, highlighted in ODI on... the Global Financial Crisis.

The UK Department for International Development, the Dutch Ministry of Foreign Affairs and the Swedish International Development Cooperation Agency has supported a team of 10 ODI researchers and 30 developing country researchers in ten poor countries (in Asia: Indonesia, Cambodia and Bangladesh, in South America Bolivia and in Africa: Benin, Ghana, Kenya, Nigeria, Uganda and Zambia) to examine the effects of the global financial crisis.  The project was staged in two phases.

In Phase 1 the main research questions included:

  • What are the elements in the shock at national level (via private capital flows, trade, aid and remittances)
  • What are the possible effects on growth, investment, poverty and inequality and debt (distinguish between actual and likely effects)
  • What are the possible policy implications (distinguish between actual, possible and optimal policy responses)

The research involved a workshop in London on 11 February 2009, consultations in each country, and synthesis reviews.

Phase 2 used the methoodolgy developed in Phase 1 to:

·       Update information on the effects of the global financial crisis, by examining the following transmission belts:

o   Private financial flows (splitting out portfolio flows, foreign direct investment (FDI) and international bank lending);

o   Trade (imports and exports);

o   Remittances; and

o   Aid.

·      Update information on economic (growth) and social (employment and poverty) effects.

·      Monitor policy responses.

·      Deepen the existing analysis where feasible, e.g. on effects on special groups or industries.

·      Discuss country-specific issues.

Social Protection
International Economic Development Group
Outputs

Mozambique Phase 2

Publication - February 2010
Carlos Castel-Branco and Rogério Ossemane

The effects of the global financial crisis on Mozambique

Sudan Phase 2

Publication - February 2010
Medani M. Ahmed

The effects of the global financial crisis on Sudan.

Tanzania Phase 2

Publication - February 2010
H.B. Lunogelo, A. Mbilinyi and M. Hangi

The effects of the global financial crisis on Tanzania.

Uganda Phase 2

Publication - February 2010
Sarah Ssewanyana and Lawrence Bategeka

The effects of the global financial crisis on Uganda.

Zambia Phase 2

Publication - February 2010
Manenga Ndulo, Dale Mudenda, Lutangu Ingombe and Frank Chansa

The effects of the global financial crisis on Zambia.

Cambodia Phase 2

Publication - January 2010
Hossein Jalilian and Glenda Reyes

The effects of the global financial crisis on Cambodia

Bolivia Phase 2

Publication - January 2010
Luis Carlos Jemio and Osvaldo Nina

The effects of the global financial crisis on Bolivia

Kenya Phase 2

Publication - January 2010
Francis M. Mwega

The effects of the global financial crisis on Kenya

Ethiopia Phase 2

Publication - January 2010
Getnet Akemu

The effects of the global financial crisis on Ethiopia

Bangladesh Phase 2

Publication - January 2010
Mustafizur Rahman, Md. Ashiq Iqbal, Towfiqul Islam Khan and Shouro Dasgupta

The effects of the global financial crisis on Bangladesh

The implications of the global financial crisis for developing countries' export volumes and values

Publication - June 2009
Mareike Meyn and Jane Kennan

Industrialised countries are in their deepest recession since World War II and the resultant slump in demand has already seriously affected commodity prices. Global growth rates have been revised downwards and there is ample evidence that the financial crisis has reduced global demand for developing country products, thus reducing their export revenue.

Ghana

Publication - April 2009
Charles Godfred Ackah, Ellen Bortei-Dorku Aryeetey and Ernest Aryeetey

The current financial crisis, following so closely the 2007-2008 food and fuel price shocks, and the expected slowdown of global growth have come at a moment when Ghana is considered more vulnerable than it has been in the recent past.

Bolivia

Publication - April 2009
Luis Carlos Jemio and Osvaldo Nina

The global financial crisis is expected to have a negative impact on the Bolivian economy. Effects will transmit into the economy through lower export prices and quantities, reduced amount of remittances and depressed foreign direct investment (FDI) flows.

Nigeria

Publication - April 2009
Olu Ajakaiye and ’Tayo Fakiyesi

The current global financial crisis, which was triggered by the credit crunch within the US sub-prime mortgage market, is continuing to spread and deepen in several countries.

Kenya

Publication - April 2009
Francis M Mwega

This paper examines the effects (so far) of the global financial crisis, possible impacts and the scope and limitations of current policy responses in Kenya.

Cambodia

Publication - April 2009
Hossein Jalilian, Chan Sophal, Glenda Reyes and Saing Chan Hang, with Phann Dalis and Pon Dorina

The global financial crisis has had a serious impact on the Cambodian economy, which has been heavily dependent on the world economy.

Indonesia

Publication - April 2009
Ira S Titiheruw, Hadi Soesastro and Raymond Atje

Up to September 2008, Indonesia’s was economy still showing some resilience towards the global financial crisis already underway in the world’s most powerful economies.

Bangladesh

Publication - April 2009
Mustafizur Rahman, Debapriya Bhattacharya, Md Ashiq Iqbal, Towfiqul Islam Khan and Tapas Kumar Paul

The global financial crisis has already started to have a negative impact on the increasingly globalising economy of Bangladesh.

Uganda

Publication - April 2009
Sarah Ssewanyana, Lawrence Bategeka, Evarist Twimukye and Winnie Nabiddo

Uganda has recorded strong economic growth since 1992, driven mainly by the services, manufacturing and construction sectors. However, there are still challenges in terms of economic transformation, exemplified by persistent high poverty levels and inequality.

Global Financial Crisis Discussion Series: Zambia

Publication - April 2009
Manenga Ndulo, Dale Mudenda,Lutangu Ingombe and Lillian Muchimba

This study explores the impact of the global financial crisis on Zambia through its effects on trade, foreign direct investment (FDI), development assistance and remittances, which are the major transmission mechanisms of the crisis to the country.

The global financial crisis and developing countries

Event - 11 February 2009 09:00 - 17:00 (GMT+00)

ODI is co-ordinating a large study examining the effects of the global financial crisis in ten developing countries. The research, has already led to important preliminary findings, which were presented by developing country experts at this workshop.