Market Finance for Development: Taking stock

Abstract

This report provides an analysis of long-term trends in private flows to low- and middle-income
countries since the turn of the 21st century. The analysis covers foreign direct investment, portfolio debt and equity flows, syndicated lending, remittances, cross-border payments, South-South investments, local currency financing, and climate financial flows to developing countries. Private capital flows to developing countries are in retreat, and indebtedness indicators are worsening, even as more resources are needed for combating poverty, food insecurity, fragility, and climate
change. MDBs can play a catalytic role in securing private capital flows to developing countries while avoiding an excessive build up in their indebtedness.

Keywords: Development, Finance, FDI, Loans, Remittances, Portfolio equity, Portfolio debt, Guarantee

JEL Classification: g15