India poverty Chris JL/Flickr

Capital Markets for Development

Ending extreme poverty and building shared prosperity in the developing world are noble goals; but they are also expensive ones, requiring financing on a scale far greater than what governments in developing countries can provide. But if the proper conditions are created, capital markets will be well positioned to meet those needs.

WASHINGTON, DC – Ending extreme poverty and building shared prosperity across the developing world are noble goals; but they are also expensive, requiring financing on a scale far greater than what governments in developing countries, their donors, and local financial institutions are able to provide.

Consider infrastructure. In Africa alone, delivering basic services like running water, electricity, and roads that connect communities to markets will require governments to spend an estimated $50 billion a year for the foreseeable future. The story is similar in Latin America and Asia, where infrastructure needs are expected to amount to some 7% of GDP.

Likewise, small and medium-size enterprises in emerging economies are starved for financing. In Latin America, they are in need of some $250 billion. In Asia, the figure is roughly $200 billion, and at least $100 billion in Africa.

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