EU-LDC Themes - International Capital Markets
Many developing countries do not have sufficient resources to finance
their investment needs. To meet these needs, they are depending
on international capital markets, either from official sources or
from private capital sources. Governments in developed countries
and the international financial institutions (IFIs) are examples
of official capital sources for developing countries. Examples of
private sources are banks and companies. The latter, in particular,
can play an important role as suppliers of capital through FDI.
The capital sources on international markets offer developing countries
opportunities for financing, but these opportunities do not come
without risks. Recent crises in Asia and Latin America have shown
that developing countries remain vulnerable to sudden changes in
the international financial system. Discussions on how to reduce
risks in dealing with international capital markets and on how to
improve access to capital for developing countries focus on the
reform of the international financial architecture (IFA) with its
institutions and mechanisms. The topic of the IFA has taken a prominent
position among academics, NGOs as well as among policy makers in
the developed and the developing world.
In discussions on capital needs of development countries, special
attention is often given to the role of FDI. FDI is not only an
important, long-term source of capital, it is also considered a
potential, major drive for stimulating economic growth. This stems
from spill-over effects of the investments through e.g. knowledge
transfer and increased employment. FDI thus has implications beyond
financing issues. Therefore, this section will deal with FDI separately
from the discussion on the international financial system.
European Union and its member states are important actors on international
capital markets. European banks are major suppliers of capital to
developing countries, whereas European companies are important investors.
Both the European Union and developing countries have high stakes
in the functioning of capital markets. This sections aims to provide
information on the issues which are in particular interest of EU-LDC
This section is organised as follows:
- Research: academic papers,
research literature, analysis and comment on FDI and its effects.
- Policy: position papers,
analysis and comment on current EU-LDC FDI relations and their
- Projects: current projects
on FDI and related issues.
- News: recent developments
in research, policy and projects relating to FDI.
you feel additional information, comments and/or documents need
to be included in this section, do not hesitate to Contact