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
· 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.
This paper maps out the response to date of a selection of bilateral and multilateral donors, in terms of their progress against various parameters such as aid commitments, new policies, use of and improvements in existing instruments and suggestions for new...
The global financial crisis and sub-Saharan Africa: The effects of slowing private capital inflows on growth
This paper uses a panel cointegration analysis to examine the long-run relationship between economic growth and four types of private capital inflows on a sample of selected sub-Saharan African countries between 1980 and 2007.
Using a model of remittance outflows’ determinants and information on past systemic banking crises, this working paper identifies possible effects of the current crisis on total remittances to developing countries.
The global financial crisis and developing countries: Synthesis of the findings of 10 country case studies
The Overseas Development Institute has coordinated a 10-country study on the effects of the global financial crisis and country level policy responses in Bangladesh, Benin, Bolivia, Cambodia, Ghana, Indonesia, Kenya, Nigeria, Uganda and Zambia.
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...
A unique study, coordinated by ODI, reveals the impact of the global financial crisis on developing countries.
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.
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....
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...
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.
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.