《GLOBAL DEVELOPMENT FINANCE THE DEVELOPMENT POTENTIAL OF SURGING CAPICAL FLOWS 1：REVIEW，ANALYSIS，AND》

Overview and Policy Messages: The Development Potential of Surging Capital Flows1

The broad surge in private capital flows continues2

Global growth has propelled the surge in capital flows, but serious risks remain4

Capital flows are being transformed5

Net official flows continue to decline7

To ensure economic stability, developing countries must manage capital flows effectively Multilateral cooperation is key to resolving global financial imbalances10

Chapter I Prospects for the Global Economy13

Summary of the outlook13

Global growth16

Regional outlooks18

Commodity markets22

Inflation, interest rates, and global imbalances25

World trade30

Risks32

Avian influenza36

Notes39

References41

Chapter 2 The Growth and Transformation of Private Capital Flows43

Private debt market developments in 200545

Structural changes in emerging market debt59

Prospects for private capital flows71

Annex: Commercial Debt Restructuring73

Developments in 2005 and the first quarter of 200673

Notes75

References75

Chapter 3 Supporting Development through Aid and Debt Relief79

Recent trends and prospects for foreign aid80

Debt relief: improving and maintaining debt sustainability87

The challenge ahead: accessing external capital, while maintaining debt sustainability99

Annex: Debt Restructuring with Official Creditors100

Notes102

References103

Chapter 4 Financial Integration among Developing Countries107

The growth of South-South capital flows108

Foreign direct investment in the developing world110

South-South banking117

Developing-country stock exchanges124

Conclusion127

Chapter 4 Annexes128

Annex 1: Data on South-South capital flows128

Annex 2: Selected South-South MA deals by southern multinationals in service sector, 2000-5130

Annex 3: Model of determinants of bank ownership131

Notes131

References133

Chapter 5 Challenges in Managing Capital Flows139

Two booms in capital flows--what has changed?141

The effect of the recent influx of capital flows on domestic investment and asset prices156

Lessons and policy agenda159

Annex: Capital Flows and Domestic Investment164

Notes166

References166

Statistical Appendix171