A distinguishing feature of emerging market crises in the 1990s and early 2000s was the sudden disruption in the capital accounts of key sectors of the economy. Capital account crises typically occur as creditors quickly lose confidence, prompting sudden and large-scale portfolio adjustments such as massive withdrawals of bank deposits, panic sales of securities, or abrupt halts of debt rollovers. As the exchange rate, interest rates, and other asset prices adjust, the balance sheet of an entire economy can sharply deteriorate.
What will determine the success of the New Partnership for Africa’s Development (NEPAD)? Which policies and measures envisaged under NEPAD need to receive highest priority? Who should be responsible for which task? What can be done to overcome potential risks and to speed up the implementation of action plans? These underlying questions are the themes that reverberate throughout this volume.
There can be little doubt that India is an emerging global economic power. India’s economic growth has averaged some 8 percent over the past three years, placing it among the world’s fastest growing economies. As a result of more than a decade of solid growth, India’s share of world output, at purchasing-power-parity-adjusted exchange rates, has increased from 4.3 percent in 1990 to 5.9 percent in 2005. Growth has been robust in the face of shocks, including the Asian crisis of 1997–98, several below-par monsoons, and the recent sharp increases in energy prices. In line with good growth, poverty has declined dramatically, with estimates indicating a drop in the poverty rate from 41 percent in 1992–93 to less than 29 percent in 2000. The reform process that has helped make this possible—and which began in earnest in 1991—has made steady progress despite several changes in political leadership. Looking ahead, it appears that the broad path of reform—although not the pace or details—is firmly established. And success begets success. India is now more than ever a focus for international investors, who are eager to take part in a new India.
Macroeconomic outcomes in sub-Saharan Africa continue to strengthen, reflecting domestic policy adjustments and a supportive external environment, including continued steady growth in the global economy, higher commodity prices, and accommodative external financing conditions. Growth is expected to increase from 2.7 percent in 2017 to 3.1 percent in 2018; inflation is abating; and fiscal imbalances are being contained in many countries.