13. Resource flows are analysed in this section under two main concepts aggregate net resource flows and net resource transfers.6

However, these have been partially offset by net outflows of other kinds of capital.

Some countries in North Africa received together about 7 billion in portfolio investment and other forms of long term capital.

countries by country group (USD Billions) 13

Net capital inflows of US 5.8 billion cushioned the trade deficit.

That figure would have been even higher, however, had the size of the net transfer on official flows not become smaller yet again in 1997.

Aggregate net resource flows

Northbound Trading Link (NTL), which has seen continuous net inflow of foreign capital, recorded a net capital inflow of RMB 8.7 billion in July, higher than the previous month.

Capital flows

20. Net resource flows and net transfers to SSA, though fluctuating, have been generally positive since the 1970s.

C. Investment and capital flows

After several years of substantial net transfers of financial resources to developing countries, capital flows to several countries suddenly changed direction.

Statement III summarizes the Organization apos s net cash flows for the period.

Capital flows and remittances

INCLUDING CAPITAL FLOWS INVESTMENT TRADE

In many cases, a combination of capital outflows, profit remittances and the accumulation of exchange reserves greatly reduced net inflows, and of these a growing proportion was absorbed by activities which added little to productive capacity.

Fostering an enabling environment for development financial flows, including capital flows investment trade

Net Worth Today

In 2003, net private capital flows to developing countries had remained positive and continued to be the largest component of capital flows to such countries.

Code of Liberalisation of Capital

Noting that capital flows, in particular private capital flows, to developing countries have been increasing strongly but that not all countries have benefited from such flows and that short term capital movements can be unpredictable,

All appropriate institutions should make every effort to ensure an adequate net flow of financial resources to developing countries.

Net external capital transfers

But even though net international capital flows are going the wrong way, there are still substantial gross capital flows outward from the world economy s core to its periphery. And we can hope that these capital flows will carry with them the institutions and managerial expertise that have made the core so wealthy.

The problem in the current episode is that in several countries, there was a sudden and very large shift of external flows from a net inward transfer to a net outward transfer.

Table 2. Net private capital flows to low and middle income countries by country group

The availability of the balance of unexpended resources depends on the degree of liquidity of the net assets held.

Negative net transfers of financial resources a net movement of financial resources out of a country does not necessarily denote an adverse economic outcome.

2 Net assets is less than 50 of the paid in capital or contingent liability reaches 50

Unlike capital flows, which vary according to the economic environment, remittances tend to stay stable and are less volatile over time.

6 Defined as net resource flows minus the interest payments on long term debt and profit remittances on account of FDI.

Encouraging private capital flows and remittances

In fact, the principal outcome was an enormous flow of capital from the periphery to the rich core. For most of the past generation, and looking into the future, the message of the market is that the benefits of international capital mobility do not include a relaxation of the capital constraint, and thus an acceleration of growth in the global periphery.

Flows to both North Africa and sub Saharan Africa have been erratic but, in the past two years, North African countries seem to have experienced net capital outflows, while net flows to sub Saharan African countries have remained positive.

The overall outcome of the various financial flows saw a seventh consecutive year of increasing net transfers of financial resources from developing to developed countries.

4. The situation with respect to Africa s share in total net resource flows, especially official development assistance (ODA), is discouraging.

There was the view that, in capital markets, long term flows should be liberalized before short term ones.

14. The massive change in the net transfer of financial resources in 1997 mainly took the form of an unprecedented swing of short term borrowing and net domestic outflows in Asia (see table 6).6 While other forms of private transfer did not exhibit large movements, net short term transfers went from an inflow of 10 billion in 1996 to an estimated outflow of 92 billion in 1997, a swing of more than 100 billion.

Debt cancellation did not necessarily lead to net flows.

Net private capital flows are no substitute for ODA, since they seldom gravitate to the neediest countries or benefit the poorest segments within countries.

In 1995 net financial flows to developing countries had continued to grow, a welcome phenomenon.

To address in the relevant international fora the urgency of measures at the global level to monitor short term capital flows, particularly in respect of the sources and movement of speculative capital, and to protect the autonomy of developing countries in managing capital flows and choosing their capital account regime.

14. Aggregate net resource flows to Africa have fluctuated relatively widely and show no underlying trend.

Rather, they were the gross flows of finance from the US to Europe that allowed European banks to leverage their balance sheets, and the large, matching flows of money from European banks into toxic US subprime linked securities. Both critics and defenders of global imbalances almost entirely overlooked these gross flows in both directions across the North Atlantic.

BEIJING In theory, the difference between capital inflows and outflows in developing countries should be positive they should be net capital importers, with the magnitude of the balance equivalent to the current account deficit. Since the 1997 1998 Asian financial crisis, however, many East Asian countries have been running current account surpluses and hence have become net capital exporters.