CHAPTER 12
INTERNATIONAL
FINANCING AND
NATIONAL CAPITAL
MARKETS
1
DEVELOPMENT BANKS
DEVELOPMENT BANKS
General Purpose
- founded by governments to help
finance very large infrastructure
projects.
2
DEVELOPMENT BANKS
Types of Development Banks
1.
World Bank Group includes
a.
International Bank for
Reconstruction and Development
b.
International Development
Association
c.
International Finance Corporation
d.
e.
The Multilateral Investment Guarantee agency
The International Centre for Settlement of
Investment Disputes
3
DEVELOPMENT BANKS
Types of Development Banks (con’t)
2. Regional Development Banks
finance industry, agricultural, and
infrastructure projects
3. National Development Banks
concentrate on a particular
industry or region.
4
MULTILATERAL DEVELOPMENT
BANKS
World Bank Group
Regional Development Group
Other Multilateral Development Bank
5
Use & Source of Funds
Long Term Loans, Based on Market
Interest. Borrow From international
Capital Market
Very long Term Loans, Interest Well
below Market Interest Rates. Funded
Through Donor Countries
Grant Financing, Mostly for Technical
Assistance or Project Preparation
6
World Bank Priorities
World Bank Is Changing It’s Priority To:
- Health Projects
- Poverty
- Education
- Debt Relief
- Corruption
7
World Bank Project
Malawi Emergency Drought Recovery
Credit
- Borrower: Republic of Malawi
- Approval: November 5, 2002
- Implementing Agency: Government
8
World Bank Project
Severe Food Crisis
Economic Cost of Crop Failure: US$150$180 Million
This year’s shortage follows prior year’s
reduced harvest
Deaths from Hunger Related Diseases
Are Increasing
9
World Bank Project
Chronic Malnutrition Rate is 49%
3.9 million people require humanitarian
assistance
Donation from member community will
cover almost US$100 Million of cost,
which will address the needs of 60% of
population
10
World Bank Project
World Bank Contribution:
- Improving The Statistical Basis For
Crop Estimates
- Better Agricultural Technology
- Providing Technical Assistance For
Review Of The Government’s
Food Security Policy
11
World Bank Project
Proposed Operation:
- Assist Government In Drought
Recovery, $40 Million available
- Services To Vulnerable Groups,
Amount of $8 Million
- Support For Implementation,
Technical Assistance & Studies,
Total Amount $2 Million
12
World Bank Project
Financing
- Borrower : US$10 Million
- IDA :
US$50 Million
- IMF :
US$22 Million
13
Regional Development Bank
Post-conflict Multi-sector -Afghanistan
- Establishing Clear & Well Defined
Policy & Legal Framework For
Agriculture, Social Sectors,
Transport & Energy Sector
- Establishing Regulatory & Market
Based Pricing Policy
14
Regional Development Bank
- Support For Agriculture Sector
Rehabilitation
- Rehabilitation Of Primary Schools &
Other Facilities
- Promote Economic Recovery
- US$150 Million Aid
15