No abstract

At the Emerging Markets Forum in October 2010, initial results were presented from an exercise that attempted to measure the resilience of emerging market and developing countries (EMDCs) to deal with shocks to their economies. This paper updates, improves upon, and draws conclusions from that index. A key conclusion is that the Resilience Index appears to have the power both to identify economies that are heading to trouble and to identify the specific policy areas of weakness that lie behind their increasing vulnerablility. The Resilience Index can add to the tools of the economic surveillance process-at least as a device to help insure that weaknesses are surfaced, and that deeper analysis is conducted to assess those weaknesses and suggest corrective policies. It is clear from this analysis that building resilience-and making it a priority of policymakers-can pay high dividends. In particular, we show that the Resilience Index clearly demonstrates that emerging weaknesses in many economies were evident well before the global crisis and the crisis in Europe.

No abstract

This chapter discusses ideas for resolving debt crises. It argues that a narrow focus on debt relief in HIPCs is insufficient and that the activist community and lenders must look to finding broader measures of foreign aid and creating a fair trading environment. In the end, finding the “right” level of debt relief is impossible and ignores the more important aim of delivering a better life to impoverished people. Support is given to a proposal floated by the IMF for a sovereign debt restructuring mechanism (SDRM) to resolve pending debt crises in developing countries.

The financial crisis that has swept through the global economy since the middle of 2007 has led to a sharp deceleration in economic growth in the emerging and frontier market economies in Africa. The record growth performance of gross domestic product of about 6 percent per annum that Africa had experienced during 2002–07 has been seriously interrupted. The consequences on employment and poverty of this interruption could be dire. In the end, the economic impact of the crisis on Africa will depend crucially on the duration and depth of the global recession, the strength of the recovery, the revival of capital markets and foreign investment, and on developments in commodity prices. Ultimately, Africa’s emergence from the crisis will also depend on the policy reactions of the countries that are most seriously affected. Since the transmission channels through which the global crisis is affecting Africa varies significantly across countries, setting common policy guidelines for a group of countries as diverse as the emerging and frontier countries of Africa is impossible. But, policy makers must act! They are faced with the dilemma of responding to the short-term declines on output and rising unemployment that have already occurred, but in an environment of great uncertainty about the future course of the global economy and global financial markets. In this environment, it is important that any short-term responses do not impair medium-term prospects. This paper examines the channels through which countries are being impacted by the crisis, identifies the key policy challenges they are confronting, and makes suggestions for formulating appropriate fiscal policy, dealing with the decline in private remittances and tourism and the likely significantly weaker prospects for foreign direct investment, and for determining the scope for official financing. In general, it is essential that countries continue to pursue policy reforms that will place them in the best possible position to take advantage of the improvement in the global economy when that occurs.