Archived Series > World Economic and Financial Surveys
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A Development Emergency: the title of this year's Global Monitoring Report, the sixth in an annual series, could not be more apt. The global economic crisis, the most severe since the Great Depression, is rapidly turning into a human and development crisis. No region is immune. The poor countries are especially vulnerable, as they have the least cushion to withstand events. The crisis, coming on the heels of the food and fuel crises, poses serious threats to their hard-won gains in boosting economic growth and reducing poverty. It is pushing millions back into poverty and putting at risk the very survival of many. The prospect of reaching the Millennium Development Goals (MDGs) by 2015, already a cause for serious concern, now looks even more distant. A global crisis must be met with a global response. The crisis began in the financial markets of developed countries, so the first order of business must be to stabilize these markets and counter the recession that the financial turmoil has triggered. At the same time, strong and urgent actions are needed to counter the impact of the crisis on developing countries and help them restore strong growth while protecting the poor. Global Monitoring Report 2009, prepared jointly by the staff of the World Bank and the International Monetary Fund, provides a development perspective on the global economic crisis. It assesses the impact on developing countries, their growth, poverty reduction, and other MDGs. And it sets out priorities for policy response, both by developing countries themselves and by the international community. This report also focuses on the ways in which the private sector can be better mobilized in support of development goals, especially in the aftermath of the crisis.
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This third edition of the Global Monitoring Report examines the commitments and actions of donors, international financial institutions, and developing countries to implement the Millennium Declaration, signed by 189 countries in 2000. Many countries are off track to meet the Millennium Development Goals, particularly in Africa and South Asia, but new evidence is emerging that higher-quality aid and a better policy environment are accelerating progress in some countries, and that the benefits of this progress are reaching poor families. This report takes a closer look at the donors' 2005 commitments to aid and debt relief, and argues that rigorous, sustained monitoring is needed to ensure that they are met and deliver results, and to prevent the cycle of accumulating unsustainable debt from repeating itself. International financial institutions need to focus on development outcomes rather than inputs, and strengthen their capacity to manage for results in developing countries.
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The year 2005 marks an important juncture for development as the international community takes stock of implementation of the Millennium Declaration—signed by 189 countries in 2000—and discusses how progress toward the Millennium Development Goals (MDGs) can be accelerated. The MDGs set clear targets for reducing poverty and other human deprivations and for promoting sustainable development. What progress has been made toward these goals, and what should be done to accelerate it? What are the responsibilities of developing countries, developed countries, and international financial institutions? Global Monitoring Report 2005 addresses these questions. This report, the second in an annual series assessing progress on the MDGs and related development outcomes, has a special focus on Sub-Saharan Africa—the region that is farthest from the development goals and faces the toughest challenges in accelerating progress. The report finds that without rapid action to accelerate progress, the MDGs will be seriously jeopardized—especially in Sub-Saharan Africa, which is falling short on all the goals. It calls on the international community to seize the opportunities presented by the increased global attention to development to build momentum for the MDGs. The report presents in-depth analysis of the agenda and priorities for action. It discusses improvements in policies and governance that developing countries need to make to achieve stronger economic growth and scale up human development and relevant key services. It examines actions that developed countries need to take to provide more and better development aid and to reform their trade policies to improve market access for developing country exports. And it evaluates how international financial institutions can strengthen and sharpen their support for this agenda. Global Monitoring Report 2005 is essential reading for development practitioners and those interested in international affairs.
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These studies provide supporting material for the analysis and scenarios in the World Economic Outlook.
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This study discusses the importance of export credits, their recent growth, and the trend toward more extensive reliance by official bilateral creditors on export credits as an instrument of financial support, and raises a number of issues regarding the role and limitations of export credit financing, espeically for economies in transition.
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These studies, prepared by the staff of the International Monetary Fund, comprise supporting material for the analyses and scenarios in the World Economic Outlook and provide a more detailed examination of the theory and evidence on some major issues affecting the global economy, commodity prices, and individual countries.
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This paper focuses on the private nonfinancial sectors of the affected economies, financial liberalization provided households and businesses with greater access to credit markets. This contributed to the long period of expansion during the 1980s. Partly as a result of major changes to the financial systems, several industrial countries had a boom in asset markets associated with a period of asset accumulation, an unprecedented buildup of debt, a sharp increase in relative asset prices, and related increases in household wealth. The expansion in household financial activity in the United Kingdom during the 1980s was paralleled by a sizable boom in investment spending and an increase in corporate debt. The structure of balance sheets was also affected by mergers and acquisitions that led to a further expansion in corporate debt. New types of bank loans and accounts have prevented even greater disintermediation but have also reduced net interest margins because more deposits now earn market-related rates of return.
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This study prepared by the Commodities Division of the Research Department reviews and analyzes the developments in commodity markets.
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This paper discusses commodity prices might serve as a useful leading indicator of inflation, based on the relative importance of flexible auction markets for the determination of these prices. They thus may have a tendency to respond relatively quickly, especially in response to monetary disturbances. Estimation of alternative commodity-price indexes, in which the weights are chosen so as to minimize the residual variance in aggregate inflation regressions, was not fully successful. The commodity prices do have a useful role to play as an aid in predicting inflation, so long as one is careful to interpret the relationships qualitatively and in the context of more general macroeconomic developments. The ratio of consumer to commodity price movements’ changes over time, and the relative price of commodities undergoes long sustained swings; nonetheless, the qualitative linkages are quite evident in the data. Perhaps most importantly, turning points in commodity-price inflation frequently precede turning points in consumer-price inflation for the large industrial countries as a group.
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This paper describes the functioning of labor markets and to eliminate other structural obstacles to noninflationary growth. The decline in the price level in the home country will involve a rise in the real money supply and, if output is sluggish, this will result in an excess supply of money. This, in turn, will lead to a drop in the domestic interest rate and, given foreign interest rates, to a temporary depreciation of the exchange rate. Structural measures could also affect investment and the current account by raising the rate of return on capital in the home country. If capital is internationally mobile, a higher rate of return on capital would result in a rise in investment and a temporary deterioration in the home country’s current account, which will be financed by an inflow of foreign capital. The quantitative impact of financial market deregulation on the economy is rather uncertain.