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About the Report

The Globalization of Corporate Finance in Developing Countries

International private capital flows to developing countries reached a record net level of $647 billion in 2006 as a wave of cross-border mergers and acquisitions boosted foreign direct investment (FDI) flows and much-improved domestic policies and favorable international economic conditions enhanced the ability of corporations based in developing countries to raise unprecedented sums of
capital on global debt markets.

In a year characterized by heightened uncertainty over the course of global economic growth and shifting views on global inflationary trends and monetary policy responses, the continued expansion of private capital flows to developing countries speaks well for the resiliency of emerging economies
and for the broader investment opportunities that globalization of the corporate sector offers to international fund managers and investors. The manner in which investors retreated from emerging markets during the broad equity sell-off in mid-2006, however, is also a telling reminder of underlying vulnerabilities and lingering weaknesses. As the tide of easy credit ebbs, it is important that emerging market governments renew their commitment to the sound policies of the recent past and
recognize the implications of changes in the financial climate.

Supporting low-income countries in establishing access to private sources of capital remains an integral part of financing for development. For poor countries, which have limited access to market-based external financing, the development community should step up efforts to enhance aid flows to
meet the development goals articulated under the Monterrey Consensus in 2002 and endorsed by the G-8 in July 2005.

Global Development Finance 2007, I: Review, Analysis, and Outlook is the World Bank’s annual review of recent trends in and prospects for financial flows to developing countries. This year’s special topics—low-income countries’ access to commercial debt markets and financial globalization of the corporate sector in developing countries—highlight two areas of increasing importance to the future growth and financial stability of emerging market economies. “Prospects for the Global Economy” is an online companion to Global Development Finance. It provides information on the global economic outlook, detailed regional forecasts, and additional features such as interactive graphs, analytical tools, and access to underlying data. This online publication is available in English, French, and Spanish at www.worldbank.org/globaloutlook.

Global Development Finance 2007, II: Summary and Country Tables includes a comprehensive set of tables with statistical data for 136 countries that report debt under the World Bank Debtor Reporting System, as well as summary data for regions and income groups. It contains data on total external debt stocks and flows, aggregates, and key debt ratios, and provides a detailed, country-by-country picture of debt. Global Development Finance 2007 debt data are also available in electronic format: GDF Online (an electronic subscription database) and the GDF CD-ROM. Each of these electronic databases provides access to 217 time series indicators from 1970 to 2005, and country group estimates for 2006.

The Little Book on External Debt is a new publication that provides a quick reference to key debt data in aggregate and for individual countries. With analysis and data extending from short-term bank lending to long-term bond issuance in local and foreign currency, Global Development Finance 2007 is unique in its breadth of coverage of the trends and issues of fundamental importance to the financing of the developing world, including coverage of capital raised by corporations in developing countries. The report is an indispensable resource for governments, economists, investors, financial consultants, academics, bankers, and the entire development community.




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