Exogenous Shocks and Growth Crises in Low-Income Countries: A Vulnerability Index

The paper proposes a doubling of access limits on concessional lending to ensure that the Fund can respond effectively to the needs of low-income countries (LICs) severely affected by the current world economic downturn. Pending adoption of broader reforms to the LIC facilities architecture, higher access limits under the Poverty Reduction and Growth Facility (PRGF) and Exogenous Shocks Facility-High-Access Component (ESF-HAC) would give the Fund greater flexibility in assisting LICs, which have become more exposed to global volatility over time. A doubling of access limits would restore them to their 1998 levels in percent of GDP and would be consistent with the approach taken in determining new access limits for General Resources Account (GRA) resources. It would also be in line with the projected doubling of medium-term demand for concessional resources.

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Strengthening the Fund's Ability to Assist Low-Income Countries Meet Balance of Payments Needs Arising from Sudden and Exogenous Shocks -- Supplement

Policy Papers ◽

10.5089/9781498331357.007 ◽

2005 ◽

Vol 2005 (40) ◽

Author(s):

Keyword(s):

Low Income ◽

Debt Relief ◽

Balance Of Payments ◽

Low Income Countries ◽

Exogenous Shocks ◽

Debt Cancellation ◽

Operational Aspects

The G-8 debt relief proposal, if adopted, should have little impact on the rational and operational aspects of the shocks window, but it may affect some of the financing consideratins, which are taken up in the page on "The G-8 Debt Cancellation Proposal and its Implications for the Fund.

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Exogenous Shocks, Foreign Aid, and Civil War

International Organization ◽

10.1017/s0020818312000136 ◽

2012 ◽

Vol 66 (3) ◽

pp. 363-393 ◽

Cited By ~ 22

Author(s):

Burcu Savun ◽

Daniel C. Tirone

Keyword(s):

Civil War ◽

Foreign Aid ◽

Civil Wars ◽

Low Income ◽

Low Income Countries ◽

Conflict Prevention ◽

Economic Shocks ◽

Exogenous Shocks ◽

Civil War Literature ◽

Attractive Option

AbstractThe recent civil war literature suggests that negative economic shocks in low-income countries increase the risk of civil war. Foreign aid can be an effective conflict-prevention tool in times of severe economic conditions. Aid cushions government spending from the downward pressures of economic shocks, providing recipient governments with resources they can use to make rebellion a less attractive option for aggrieved domestic groups. Using Official Development Assistance (ODA) data covering 1990 through 2004, we find that foreign aid appears to be a useful tool for preventing civil wars in the wake of negative economic shocks, and as such aid should be assessed by donors with these conflict-suppressing aspects in mind.

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Managing Volatility in Low-Income Countries - The Role and Potential for Contingent Financial Instruments

Policy Papers ◽

10.5089/9781498338325.007 ◽

2011 ◽

Vol 2011 (89) ◽

Author(s):

Keyword(s):

Natural Disaster ◽

World Bank ◽

Low Income ◽

Commodity Price ◽

Low Income Countries ◽

Financial Instruments ◽

Exogenous Shocks ◽

Disaster Insurance ◽

Ex Post ◽

Ex Ante

The paper examines the case for contingent financial instruments for low-income countries (LICs), from both the market and official sector. These include commodity price hedging instruments, contingent debt instruments (commodity-linked bonds, deferred repayment loans), and natural disaster insurance, for example. The paper considers the adequacy of the existing framework of ex post and ex ante support to LICs facing exogenous shocks, and examines the need for and possible constraints to greater availability of contingent instruments. Would there be a role for the international community, particularly the IMF and World Bank, in helping to address the constraints that limit development and use of these instruments?

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Establishment of an Exogenous Shocks Facility Under the Poverty Reduction and Growth Facility Trust

Policy Papers ◽

10.5089/9781498330954.007 ◽

2005 ◽

Vol 2005 (31) ◽

Author(s):

Keyword(s):

Developing Countries ◽

Low Income ◽

Poverty Reduction ◽

Foreign Assistance ◽

Low Income Countries ◽

Limited Capacity ◽

Exogenous Shocks ◽

Policies And Measures ◽

Market Insurance ◽

Negative Impacts

At the recent Board discussion on strengthening the Fund's assistance to low-income countries dealing with sudden and exogenous shocks, most Directors supported the establishment of an Exogenous Shocks Facility within the Poverty Reduction and Growth Facility Trust. In an earlier discussion, Directors noted that exogenous shocks could have significant negative impacts on developing countries' growth, macroeconomic stability, debt sustainability, and poverty, and that low-income countries are particularly vulnerable to shocks due to lack of diversification, limited capacity to build up reserves, and prohibitively expensive or unavailable market insurance. The international community can supplement national efforts for reducing vulnerability to shocks. Recent research shows that foreign assistance can be unusually effective in the aftermath of a shock. Such assistance needs to be available quickly, and it needs to be associated with sound adjustment policies and measures to reduce vulnerability to future shocks.

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The Fund's Facilities and Financing Framework for Low-Income Countries

Policy Papers ◽

10.5089/9781498336260.007 ◽

2009 ◽

Vol 09 ◽

Author(s):

Keyword(s):

Low Income ◽

Global Financial Crisis ◽

Policy Support ◽

Low Income Countries ◽

Supplementary Information ◽

Executive Directors ◽

Financial Instruments ◽

Exogenous Shocks ◽

Second Stage ◽

Recent Modification

This paper assesses the adequacy of the Fund’s facilities and financing framework for low-income countries (LICs) and proposes reform options. It is part of a broader review of all Fund financial instruments and is timely given the pressure the current global financial crisis is putting on LICs. It builds on previous efforts to adapt the Fund’s toolkit to the evolving needs of its LIC members, including creation of the Policy Support Instrument (PSI) and the recent modification of the Exogenous Shocks Facility (ESF). This paper provides the basis for the first stage of the LIC-specific review, with a focus on: (i) gaps and overlaps in the facility architecture for LICs, (ii) design issues such as access, financing terms, and conditionality, and (iii) the concessional resource envelope and funding structure. Based on feedback from Executive Directors and further external consultation, more detailed reform proposals will be prepared in the second stage of the review. The Fund’s Facilities and Financing Framework for Low-Income Countries—Supplementary Information March 13, 2009

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Composite Indicators as Decision Support Method for Flood Analysis

Advances in Environmental Engineering and Green Technologies - Decision Support Methods for Assessing Flood Risk and Vulnerability ◽

10.4018/978-1-5225-9771-1.ch002 ◽

2020 ◽

pp. 28-41

Author(s):

Ahmed Karmaoui ◽

Abdelkrim Ben Salem ◽

Guido Minucci

Keyword(s):

Decision Support ◽

Low Income ◽

Vulnerability Index ◽

Global Scale ◽

Low Income Countries ◽

Flexible Tool ◽

Flood Vulnerability ◽

Support Tools ◽

Social Environmental ◽

Main Components

Floods are highly relevant extreme events with increasing frequency at a global scale. They remain among the most dangerous and complex natural disasters in middle and low-income countries. In this context, it is necessary to develop decision-support tools to reduce the flood risk and increase the resilience. The chapter reviews one of the most relevant tools, the flood vulnerability index (FVI) category at a global scale. These tools use hydrological, topographic, socio-economic parameters strongly associated with flood vulnerability. The findings indicate that FVI is a flexible tool for integrated assessment of vulnerability to floods for application in different regions. Social, environmental, and physical components are the main components used in the FVI. Household and neighborhood, basin, urban, sub-catchment, and coastal are the different levels of vulnerability analysis.

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Strengthening the Fund's Ability to Assist Low-Income Countries Meet Balance of Payments Needs Arising from Sudden and Exogenous Shocks

Policy Papers ◽

10.5089/9781498331494.007 ◽

2005 ◽

Vol 2005 (79) ◽

Author(s):

Keyword(s):

Low Income ◽

Balance Of Payments ◽

Financial Assistance ◽

Low Income Countries ◽

Executive Board ◽

Exogenous Shocks

At the Executive Board discussion on the role of the Fund in low-income countries, Directors requested proposals to address the absence of concessional instruments other than the PRGF in the Fund's financial assistance to low-income members facing exogenous shocks. Against this background, this paper analyses the main issues in designing such a window within the PRGF Trust.

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