Capital Account Regimes and the Developing Countries

247 Pages·1999·23.357 MB·English

by  G. K. Helleiner (eds.)

CAPITAL ACCOUNT REGIMES AND
THE DEVELOPING COUNTRIES
Also by G. K. Helleiner
AGRICULTURAL PLANNING IN EAST AFRICA (editor)
A WORLD DIVIDED (editor)
FOR GOOD OR EVIL (editor)
FROM ADJUSTMENT TO DEVELOPMENT IN AFRICA (editor with
Giovanni Andrea Cornia)
MANUFACTURING FOR EXPORT IN THE DEVELOPING WORLD
(editor)
PEASANT AGRICULTURE, GOVERNMENT AND ECONOMIC
GROWTH IN NIGERIA
POVERTY, PROSPERITY AND THE WORLD ECONOMY (editor
with S. Abrahamian, E. Bacha, R. Lawrence and P. Malan)
THE IMF AND AFRICA (editor)
INTERNATIONAL ECONOMIC DISORDER
THE INTERNATIONAL MONETARY AND FINANCIAL SYSTEM
(editor)
INTERNATIONAL TRADE AND ECONOMIC DEVELOPMENT
INTRA-FIRM TRADE AND THE DEVELOPING COUNTRIES
THE NEW GLOBAL ECONOMY AND THE DEVELOPING
COUNTRIES
THE OTHER SIDE OF INTERNATIONAL DEVELOPMENT POLICY
(editor)
TRADE POLICY AND INDUSTRIALIZATION IN TURBULENT
TIMES (editor)
TRADE POLICY, INDUSTRIALIZATION AND DEVELOPMENT
(editor)
Capital Account
Regimes and the
Developing Countries
Edited by
G. K. Helleiner
Professor of Economics
University of Toronto
Canada
~ in association with
~ PALGRAVE MACMILLAN
© United Nations Conference on Trade and Development 1998, 1999
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First edition 1998
Reprinted (with new preface) 1999
Published by
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ISBN 978-0-333-77835-7 ISBN 978-1-349-15071-7 (eBook)
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Contents
List of Figures vi
List of Tables vii
Notes on the Contributors ix
Preface to the 1999 Reprint xi
List ofA bbreviations xiii
1 Capital Account Regimes and the Developing
Countries: Issues and Approaches 1
G. K. Helleiner
2 Capital Account Regulations and Macroeconomic Policy:
Two Latin American Experiences 45
Guillenno Le Fort-V and Carlos Budnevich L.
3 Managing Foreign Capital Flows: The Experiences of the
Republic of Korea, Thailand, Malaysia and Indonesia 82
Yung Chul Park and Chi-Young Song
4 Capital Inflows and Macroeconomic Policy in
Sub-Saharan Africa 141
Louis &sekende, Damoni Kitabire and Matthew Martin
5 A New Facility for the IMF? 184
John Williamson
6 Cross-Border Payments Taxes and Alternative
Capital Account Regimes 196
Rudi Dornbusch
7 Issues Relating to the Treatment of Capital Movements
in the IMF 211
Aziz Ali Mohammed
Appendices 220
Index 223
v
List of Figures
3.1 Trends of investment and savings, selected Asian
countries, 1986-94 84
3.2 'frend and composition of foreign capital inflows,
selected Asian countries, 1986-94 86-7
3.3 Rate of change in the consumer price index and rate
of real effective currency devaluation, selected Asian
countries, 1985-9 and 1990-4 99
3.4 Republic of Korea: changes in net domestic assets
and net foreign assets, 1986-94 105
3.5 Interest rates in Thailand and the United States,
quarterly, 1986-94 109
3.6 Interest rates in Malaysia and the United States,
quarterly, 1986-94 113
3.7 Indonesia: net sales of SBI and SBPU, and the
SBI discount rate, 1986-94 120
3.8 Interest rates in Indonesia and the United States,
monthly, 1990-5 122
3.A1 GARCH variance of weekly exchange rates, 1986-95 132-3
3.A2 GARCH variance of weekly stock returns, 1986-95 134-5
3.A3 GARCH variance of interest rates, 1985/9 to 1995 136
vi
List of Tables
1.1 Developing countries: capital flows, 1973-95 5
1.2 Percentage composition of external long-term
capital flows to developing countries, 1994 6
1.3 Major types of private capital inflow to selected
developing countries, 1990--4 7
1.4 Capital controls in developing countries, 1994 15
1.5 Developing countries that have accepted
IMF Article VIII obligations, 1994 30
2.1 Chile and Colombia: balance of payments, 1990-4 62
2.2 Chile and Colombia: capital account balance and
foreign direct investment, 1990-4 63
2.3 Chile and Colombia: time structure of
non-investment capital flows, 1990-4 64
2.4 Chile and Colombia: macroeconomic indicators, 1990-4 74
2.5 Chile and Colombia: savings and investment, 1990-4 75
2.Al Colombia: maturity of FFCT and reserve
requirement ratio, according to Central Bank
Resolution 22 of 1994 78
3.1 Republic of Korea: economic indicators, 1987-94 103
3.2 Thailand: economic indicators, 1987-94 107
3.3 Malaysia: economic indicators, 1987-94 112
3.4 Chronology of administrative measures to contain
capital inflows in Malaysia in 1994 115
3.5 Indonesia: economic indicators, 1987-94 118
4.1 Capital flows to developing countries and
sub-Saharan Africa, 1990--4 144
4.2 Composition of private capital inflows to
developing regions, 1978-82 and 1990-3 146
4.3 Capital flows to selected countries in sub-Saharan
Africa, 1986-9 and 1990-3 147
4.4 Private capital flows to selected countries in
sub-Saharan Africa, 1986-90 and 1990-3 147
4.5 Composition of private capital inflows to
sub-Saharan Africa, 1986-9 and 1990-3 148
4.6 Composition of capital flows to sub-Saharan Africa,
by country, 1986-9 and 1990-3 150
vii
viii List of Tables
4.7 Real lending rates in selected countries of
sub-Saharan Africa, 1986-94 154
4.8 Nominal and real exchange rates of selected
countries in sub-Saharan Mrica, 1986-94 159
4.9 External reserves of selected countries in
sub-Saharan Africa, 1986-93 160
4.10 Selected countries in sub-Saharan Mrica:
macroeconomic indicators, 1986-9 and 1990-3 162
6.1 Net capital inflows to developing countries 197
Notes on the Contributors
Carlos Budnevich L. is Manager of Financial Analysis, Banco Central
de Chile. He has been Professor of Economics at Universidad
Cat6lica de Chile and Universidad de Chile, and has held positions
as an Economist at Corporaci6n de Investigaciones Econ6micas para
Latinoamerica (CIEPLAN) and the Superintendencia de Bancos. He
holds a PhD in Economics from the University of Pennsylvania.
Rudi Dornbusch is Ford Professor of Economics and International
Management at the Massachusetts Institute of Technology
G. K. Helleiner is Professor of Economics at the University of Toronto
and Research Coordinator for the Intergovernmental Group of
Twenty-Four on International Monetary Affairs (G-24).
Louis Austin Kasekende is Executive Director, Research and Policy
Function, at the Bank of Uganda.
Damoni Kitabire is Acting Director of Budget, Ministry of Finance,
Republic of Uganda.
Guillermo R. Le Fort-V. is Head of the International Division of the
Central Bank of Chile, and a member of the Governor's advisory team
in macroeconomic and financial policy matters. Formerly he was a
Senior Economist at the International Monetary Fund (IMF) and
Assistant Professor of Economics at the University of Chile. He holds
a PhD in Economics from the University of California at Los Angeles.
Matthew Martin is Director of External Finance for Mrica, (EFA), an
economic policy research, advisory and capacity-building organization
funded by multilateral and bilateral donors. EFA specializes in
national debt reduction strategies, and external and domestic finan
cing of development, and is currently working with over twenty Mri
can and non-Mrican governments.
Aziz Ali Mohammed was the head of the G-24 Liaison Office in
Washington when this paper was written. Previously he was Chairman
ix