Economic and Social Survey of Asia and the Pacific 2001

Financing for Development

image of Economic and Social Survey of Asia and the Pacific 2001

Following the impressive recovery in 1999, the economic performance of the ESCAP region strengthened further in 2000 in an environment of low inflation. Prospects for 2001 are mixed. This year's issue of the survey reviews the economic progress in the ESCAP region over the past year and analyzes population dynamics and their related policy implications. It also provides a regional perspective on the subject of 'Financing for Development' looking at such issues as: domestic and external resources; trends in and current distribution of Official Development Assistance; and reform of the international financial architecture.



External private resources

There is a growing pool of private international capital from which countries in the ESCAP region can mobilize resources for their development, diversify risks and stabilize their macroeconomic performance. Besides adding to the financial resources available, there are indirect benefits of foreign resource inflows that include enhanced knowledge, spill-over effects, improved resource allocation, and strengthened domestic financial markets. There are basically two types of external resources: foreign direct investment and other forms of external private capital inflows (bank loans, international securities issues and foreign participation in local capital markets). These two types are inherently different as FDI involves participation by foreigners in actual productive activities whereas private capital inflows take a purely financial form. Therefore, they are discussed separately below.


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