Debt relief improves credit-worthiness of developing countries, says World Bank
The World Bank said poorer countries’ ability to access private debt markets was boosted by debt relief in 2006, which has cut their heavy debt burdens and improved their credit-worthiness. This also spurred countries’ growth potential although private capital flows to the region are highly concentrated, Mansoor Dailami said. …” [Reuters (05/29)/Factiva]
In a separate piece, Reuters further notes that “companies from developing countries are raising vast sums of capital on global markets on an unprecedented scale, which has also increased their exposure to interest rate and currency risks, the World Bank said.
“The influx of private capital into developing countries remained at record levels for a second straight year in 2007, but many still need low interest loans and grants from the World Bank and other international financial institutions, the Bank's Chief Economist said Tuesday. …
In [its] Global Development Finance 2007, the Bank reported that private capital flows to developing countries reached a record level of $647 billion in 2006 compared to $431 billion for 2005. Bank lending to these countries last year was $23 billion. …
The Bank said buoyant financial conditions over the past several years contributed to a 7.3 percent growth rate in developing countries in 2006, the fourth consecutive year that developing countries' growth has exceeded 5.5 percent. …”
[The Associated Press (05/29)/Factiva]
With growth in developing countries like China and India outpacing that of wealthy nations, the new phenomenon of corporate globalization is likely to intensify in the next few years, the … report said. …” [Reuters (05/29)/Factiva]
WSJ writes that “…The report warns that the underside of that boom is apparent in several countries in Eastern Europe and Central Asia, where banks have borrowed large amounts in foreign currencies that they could have difficulty repaying if economic conditions change….
The World Bank notes that 2006 probably represented a peak in the global economic cycle, and that governments should gird themselves for a somewhat less benign environment ahead. …” [The Wall Street Journal (05/29)/Factiva]
Reuters adds that “…The Bank said higher interest rates and emerging capacity constraints would slow the rapid growth of developing countries, with global growth falling to around 3.5 percent in 2009 from 4 percent in 2006. In developing countries, growth is likely to moderate gradually to about 6 percent in 2009 from 7.3 percent in 2006, the report said. …
The report's main author, Mansoor Dailami, said in an interview. … [that] the large foreign exchange reserves in many developing countries, especially in Asia, could be used as buffers in the event of financial shocks. …
Original Source : Kommersant International (Russia); The Globe and Mail (Canada) and La Tribune (France)
