National Development Finance in Middle-Income Countries

2020 ◽  
pp. 233-251
Author(s):  
Stephany Griffith-Jones
Keyword(s):  
Development Strategy ◽  
Developing Economies ◽  
National Development ◽  
Sustainable Growth ◽  
Financial Inclusion ◽  
Middle Income ◽  
Middle Income Countries ◽  
Development Banks ◽  
Privately Financed ◽  
Combat Climate Change

This chapter focuses on the roles of National Development Banks (NDBs) in emerging and developing economies. They finance investment in sectors key for dynamic and sustainable growth, both through their own lending, and by catalyzing private finance. For NDBs to contribute significantly to avoiding a middle-income trap, there are several conditions: they must be “good,” well-run development banks, their scale must be sufficiently large to help meet investment needs on a significant scale, and there must be a clear national development strategy, for NDBs to implement. This chapter stresses NDBs contribution to financing investment in innovative sectors and infrastructure. This is complementary to supporting provision of public goods, particularly investments that help combat climate change and financial inclusion. NDBs should provide counter-cyclical financing in the busts, when privately-financed investment tends to decline and NDB lending increases to help maintain crucial investment, and in booms, when lending by NDBs should slow down.

scholarly journals Towards a pro-poor development strategy for middle-income countries: a comment on Bresser-Pereira and Nakano

2004 ◽  
Vol 24 (1) ◽  
pp. 137-143 ◽  
Author(s):  
ALFREDO SAAD FILHO
Keyword(s):  
Income Distribution ◽  
Development Strategy ◽  
Debt Crisis ◽  
Growth Strategy ◽  
Sustainable Growth ◽  
Poor Growth ◽  
Middle Income ◽  
International Debt ◽  
Middle Income Countries

ABSTRACT This paper draws upon Bresser-Pereira and Nakano (2003), in order to outline a pro-poor growth strategy for middle-income countries. This strategy avoids the pitfalls of the neoliberal model implemented in several countries in the aftermath of the 1982 international debt crisis, and is conducive to income distribution and sustainable growth simultaneously.

Conclusions

2018 ◽  
Author(s):  
Stephany Griffith-Jones ◽  
José Antonio Ocampo ◽  
Paola Arias
Keyword(s):  
Developing Countries ◽  
Renewable Energy ◽  
Exchange Rates ◽  
Interest Rates ◽  
Development Strategy ◽  
National Development ◽  
Financial Inclusion ◽  
Production Sector ◽  
New Instruments ◽  
Innovation And Entrepreneurship

Based on the seven case studies analysed in this volume, this chapter concludes that national development banks (NDBs) have been successful in many cases in supporting innovation and entrepreneurship, key new sectors like renewable energy, and financial inclusion. They have developed new instruments, such as far greater use of guarantees, equity (including venture capital) and debt funds, and new instruments for financial inclusion. The context in which they operate is key to their success. Active countercyclical policies, low inflation, fairly low real interest rates, a well-functioning financial sector, and competitive exchange rates are crucial. They are also more effective if the country has a clear development strategy, linked to production sector strategies that foster innovative sectors. Under these conditions, the chapter argues that there is great need for a larger scale of NDB activity in Latin America and in developing countries in general.

scholarly journals From Monterrey to Addis Ababa and beyond

2020 ◽  
Vol 15 (3) ◽  
Author(s):  
Philippe Orliange ◽  
Ana Flávia Granja Barros-Platiau
Keyword(s):  
Sustainable Development ◽  
International Development ◽  
Addis Ababa ◽  
National Development ◽  
Development Aid ◽  
Future Research ◽  
Institutional Entrepreneurship ◽  
Middle Income ◽  
Financial Flows ◽  
Development Banks

How did the global framework for financing sustainable development evolve in the past ten years? We argue that its evolution is deeply connected to multilateral initiatives such as the Monterrey consensus,the Addis Ababa Action Agenda, the Sustainable Development Goals and the Paris Agreement on climate change. Therefore, the year 2015 may be considered as a landmark. In this vein, we identified five keychanges that affect the global framework for financing development worldwide, showing how traditional international cooperation mechanisms coexist with new ones. They are discussed in the followingorder: the evolution of global development agendas; systemic power relations and financial flows; the institutional entrepreneurship of emerging powers; the increased role of development banks; and from official development aid (ODA) to international public finance. Under the United Nations auspices or not, middle-income countries started to play a bigger role in financing mechanisms. Likewise, some national development banks became more important and started to act more closely under the International Development Finance Club (IDFC) auspices. Brazil, Colombia and South Africa are mentioned as cases for future research.

Rapid global urbanisation will test governments

2017 ◽  
Keyword(s):  
Urban Communities ◽  
Global Economy ◽  
International Criminal ◽  
National Development ◽  
Security Threats ◽  
City Development ◽  
Middle Income ◽  
Content Type ◽  
Middle Income Countries ◽  
Social Opportunities

Subject City fragility. Significance Urbanisation can bring employment, educational and social opportunities to many people, but rapid urbanisation, especially in lower and middle-income countries, is creating areas where public service provision and economic opportunity are low and susceptibility to security threats is high. Impacts Lower and middle-income countries are set to see the bulk of the world’s urbanisation over the coming decades. City development will become synonymous with national development. Connecting urban communities with the global economy will be crucial for prosperity. However, this will require adequate protection from international criminal networks.

scholarly journals Innovations in achieving sustainable economic performance under income inequality

2021 ◽  
Vol 5 (2) ◽  
pp. 146-154
Author(s):  
Inna Cabelkova ◽  
Manuela Tvaronaviciene ◽  
Wadim Strielkowski
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Income Inequality ◽  
Economic Performance ◽  
Financial Services ◽  
Developing Economies ◽  
Well Being ◽  
Middle Income ◽  
Middle Income Countries ◽  
The Impact

The negative effect of income inequality on economic growth represents a topic that constitutes a broad topic of research in the standard economic theory. One of the immediate consequences of income inequality is diminished consumption. Many «poor» customers cannot provide sufficient demand for the producers, causing overproduction that might lead to an economic crisis. It constitutes a problem because sustainable economic performance needs to be achieved under the conditions of income inequality. Reducing social and economic inequality in countries is an essential step towards ensuring that no one is left behind. It is also part of the 10th Sustainable Development Goal aimed to reduce it by 2030. Inequality is based on the income distribution between the top 1% and the bottom 99% of households in any given country. The degree of inequality could play a beneficial role if it is driven by market forces and is associated with incentives to increase growth. In developing and emerging countries, greater equality and improvements in living standards are needed to enable populations to flourish. Inequality reduction is one of the most critical steps a government could take to improve the well-being of its population. The income inequality growth increases human capital in poor countries and reduces it in high and middle-income countries. In poorer countries, it increases them, but in higher – and middle-income countries, it reduces them. Income inequality could be reduced by improving human capital and general skill levels, correcting labor-market policies, and making better use of financial services. In turn, sustainable economic growth could reverse the negative effects of inequality, reducing the need for high-wage and higher-earning households. Thus, it provides higher economic growth. This paper discusses three ways to circumvent the impact of decreasing consumption on economic growth adopted in developing economies over the last fifty years, such as increasing exports, providing loans for consumption, and printing new money. The findings showed that none of these methods seem to be sustainable in the long run. Thus novel and innovative mechanisms that would allow our economy to reduce inequality are necessary and need to be put into place.

Colombia’s System of National Development Banks

2018 ◽  
Author(s):  
José Antonio Ocampo ◽  
Paola Arias
Keyword(s):  
Market Failure ◽  
Local Development ◽  
National Development ◽  
Financial Inclusion ◽  
Market Failures ◽  
Major Market ◽  
Entrepreneurial Growth ◽  
Development Banks ◽  
Specialized Institutions

The major feature of Colombia’s national development banks is that they constitute a system of multiple, specialized institutions, created at different times to promote sectors that were considered strategic for the country’s development. This chapter analyses the characteristics of the system of national development banks in Colombia currently composed of four specialized institutions: FDN (for infrastructure), FINDETER (local development), BANCOLDEX (industry and foreign trade), and FINAGRO (agriculture). The chapter explores the history, current structure, and main features of the system. It also looks at how the system is managing three major market failures: infrastructure financing (the major case of market failure in long-term financing), financial inclusion, and the promotion of entrepreneurial growth.

Linkages between Financial Development and Economic Growth in the Middle-Income Countries of South Asia: A Panel Data Investigation

2020 ◽  
Vol 24 (2) ◽  
pp. 140-150 ◽  
Author(s):  
Rajesh Sharma ◽  
Pradeep Kautish
Keyword(s):  
Economic Growth ◽  
Stock Market ◽  
South Asia ◽  
Banking Sector ◽  
Sustainable Growth ◽  
Gdp Growth ◽  
Middle Income ◽  
Middle Income Countries ◽  
Long Run ◽  
The Impact

The present study intends to investigate the impact of financial sector development on GDP growth in the four middle-income countries of South Asia over the period of 1990–2016. Using pooled mean group (PMG) estimation, this study tries to examine whether in these developing countries, GDP growth has been influenced by size of market capitalization and size of market turnover in the long run which are used as proxy for stock market development. Similarly, domestic credit to private sector is used as proxy for banking sector development while assessing its long-run impact on GDP growth. Furthermore, by incorporating a dummy variable for the global financial crisis (2007–2008), this study investigates whether these economies are vulnerable to external shocks or not. The outcomes of this study find that relatively, the impact of banking sector on GDP growth has remained low in the region. Nevertheless, the development in both sectors has positively influenced economic growth in the long run. The outcomes of this study suggest that both, i.e. stock market and banking sector, are vital determinants of long-run economic growth in the South Asian countries. Therefore, to achieve the sustainable growth, policymakers need to adopt the global approach which can be ensured by improving the quality and scope of financial services in these countries.

scholarly journals Evaluating the Behaviour of Chinese Stakeholders Engaged in Large Hydropower Projects in Asia and Africa

2017 ◽  
Vol 230 ◽  
pp. 464-488 ◽  
Author(s):  
May Tan-Mullins ◽  
Frauke Urban ◽  
Grace Mang
Keyword(s):  
Environmental Changes ◽  
National Development ◽  
Mitigation Strategies ◽  
Low Carbon ◽  
Natural Habitats ◽  
Middle Income ◽  
Carbon Reduction ◽  
Middle Income Countries ◽  
Hydropower Dams ◽  
Low Carbon Energy

AbstractHydropower dams are back in the spotlight owing to a shifting preference for low carbon energy generation and their possible contribution to mitigating climate change. At the forefront of the renaissance of large hydropower dams are Chinese companies, as the builders of the world's largest dams at home and abroad, opening up opportunities for low- and middle-income countries. However, large hydropower dams, despite their possible developmental and carbon reduction contributions, are accompanied by huge economic costs, profound negative environmental changes and social impacts. Using fieldwork data from four hydropower projects in Ghana, Nigeria, Cambodia and Malaysia, this paper evaluates the behaviour of Chinese stakeholders engaged in large hydropower projects in Asia and Africa. We do this by first exploring the interests of the different Chinese stakeholders and then by investigating the wider implications of these Chinese dams on the local, national and international contexts. The paper concludes that hydropower dams will continue to play a prominent role in future efforts to increase energy security and reduce energy poverty worldwide, therefore the planning, building and mitigation strategies need to be implemented in a more sustainable way that takes into account national development priorities, the needs of local people and the impacts on natural habitats.

scholarly journals The interest rate sensitivity of output and prices with different levels of financial inclusion

2019 ◽  
Vol 21 (2) ◽  
pp. 114-130
Author(s):  
Huong Thi Truc Nguyen
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Developing Economies ◽  
Sustainable Growth ◽  
Financial Inclusion ◽  
Content Type ◽  
The Interest Rate ◽  
The Impact ◽  
Panel Vector Autoregressions ◽  
Different Levels

Purpose The purpose of this paper is to evaluate the interest rate (IR) sensitivity of output and prices in developing economies with different levels of financial inclusion (FI) for the period 2007Q1–2017Q4. Design/methodology/approach By using the PCA method to construct an FI index for each country, the author divides the sample into two groups (high and low FI levels). Then, with panel vector autoregressions on per group estimated to assess the strength of the impulse response of output and prices to IR shock. Findings The findings show that the impact of an IR shock on output and inflation is greater in economies with a higher degree of FI. Practical implications The finding indicates the link between FI and the effectiveness of IRs as a monetary policy tool, thereby helping Central banks to have a clearer goal of FI to implement their monetary policy. Originality/value This study emphasizes the important role of FI in the economy. From there, an FI solution is integrated into the construction and calculation of its impact on monetary policy, improving the efficiency of monetary policy transmission, contributing to price stability and sustainable growth.

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