O V E R V I E W
Aggregate Net Flows to Developing Countries
Figure I.2. Key Debt Indicator Trends, 2000–12 140
I
120
Percent
100 80 60 40 20 0 2000
2002 2004
2006 2008 2010 2012
External debt stocks to exports External debt stocks to GNI Debt service to exports Short-term debt to imports Sources: World Bank Debtor Reporting System and International Monetary Fund.
followed by those in Europe and Central Asia (25 percent). Issuance by corporate borrowers rose at a more moderate pace, to $88 billion, up 12 percent from 2011. The dominant players were private-sector borrowers in Latin America and the Caribbean, particularly in Brazil and Mexico, who commanded well over half of all corporate bonds issued in 2012. However, the sharpest increase was in Europe and Central Asia, where corporate bond issuance rose more than threefold to $14.7 billion led by Turkey (table I.4).
nternational capital flows, debt and equity combined, totaled just over $1.1 trillion in 2012, only marginally higher than 2011, but 7 percent above their 2007 precrisis level. Measured relative to developing country GNI, net capital flows declined sharply to 5.1 percent in 2012, well short of the 8.4 percent recorded in 2007. Net equity flows rose 8 percent in 2012 driven by a sharp rebound in portfolio equity flows. The increase to almost $100 billion in portfolio equity flows offset both the 7 percent fall in foreign direct investment inflows and the 9 percent decline in net debt inflows. However, this global trend is dominated by development in China, which accounted for more than one-third of net capital flows to developing countries in 2011 and 2012, and in which the net inflow of debt and equity combined fell to $321 billion in 2012, 25 percent below their 2011 level. In contrast, other developing countries saw net capital flows rise 17 percent in 2012 (table I.5). Foreign direct investment is the single largest component of capital flows to developing countries and the most resilient, accounting for almost 55 percent since 2008. UNCTAD’s World Investment Report 2013 confirms that a record 52 percent of global foreign direct investment in 2012 was directed at developing countries with investors attracted by improvements in the business and regulatory environment, growth prospects, and buoyant domestic markets. Although an
Table I.4. Bond Issuance by Developing Country Borrowers, 2011–12 $ billion Public borrowers
Corporate borrowers
2011
2012
2011
2012
East Asia and Pacific
23.5
28.7
16.4
20.3
Europe and Central Asia
18.6
35.1
4.5
14.7
Latin America and the Caribbean
42.5
53.9
55.1
48.7
Middle East and North Africa
4.0
8.3
0.0
0.5
South Asia
3.0
8.5
0.7
0.8
Sub-Saharan Africa
4.5
3.4
1.7
3.1
96.1
137.8
78.5
88.1
62.3
97.3
68.5
69.3
All developing countries Of which: Top ten borrowers Source: World Bank Debtor Reporting System.
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