The year 2008 witnessed three major crises (food, energy,
global financial and economic crises) and their impacts were
increasingly felt worldwide. Since the eruption of global financial
crisis from September 2008, international financial markets have become
more turbulent, and the global economic slowdown is expected to deepen
further. Virtually no country, developing or developed, has escaped from
the impact of the global financial turbulence, although countries that
entered the crisis with less integration into the global economy have
generally been less affected. There is an increasing concern that the
ongoing global financial turbulence is likely to transform into human
crisis, particularly in the developing world. Although, it will take
sometime to assess the full impact of the these crises on developed as
well as developing countries, various preliminary estimates have been
reported about the losses due to these crises. For example, Kuwait
Foreign Minister revealed in Arab Economic Summit that Arab investors
lost $2.5 trillion just in four months (September to December 2008) due
to credit crunch.1 Similarly, according to the latest estimate by the
Asian Development Bank, the global financial market losses reached $50
trillion in 2008, which is equivalent to one year of world GDP.2 Like
other developing countries, the impacts of these crises have also been
increasingly felt in IDB member countries. Firstly, a large number of
member countries were affected due to high food and fuel prices and
since September 2008, they are being affected directly and indirectly by
the global financial crisis although the channels of transmission are
different from those operating in relatively more developed member
countries.
Impact of Global Financial Crisis on IDB Member Countries: The
Case of Gulf Cooperation Council and Sub-Saharan Africa