En finir avec les fuites de capitaux dans les pays en développement

Feb 18, 2016 Joseph E. Stiglitz , Hamid Rashid

NEW YORK – Les pays en développement se préparent à un ralentissement important cette année. Selon le rapport de l'ONU Situation économique mondiale et perspectives 2016, leur croissance s’est élevée en moyenne à seulement 3,8% en 2015 – le taux le plus bas depuis la crise financière mondiale de 2009 et égalé dans ce siècle uniquement par l'année de récession de 2001. De plus, ce qui est important de garder à l'esprit est que le ralentissement en Chine et les récessions profondes en cours dans la Fédération de Russie et au Brésil n'expliquent qu’une partie de la vaste atténuation de la croissance.

Certes, la baisse de la demande de ressources naturelles en Chine (qui représente près de la moitié de la demande mondiale pour les métaux de base) a largement contribué à la forte chute des leurs prix, qui a porté un gros coup à de nombreux pays en développement et économies émergentes en Amérique latine et en Afrique. En effet, le rapport de l'ONU énumère 29 économies qui sont susceptibles d'être durement touchées par le ralentissement de la Chine. Et l'effondrement des prix du pétrole de plus de 60% depuis juillet 2014 a érodé les perspectives de croissance des exportateurs de pétrole.

Le vrai souci, cependant, n’est pas seulement la baisse des prix des matières premières, mais aussi les sorties de capitaux massives. Au cours de la période 2009-2014, les pays en développement ont reçu collectivement une entrée nette de capitaux de 2,2 trillions de dollars, en partie en raison de l'assouplissement quantitatif dans les pays avancés, qui ont poussé les taux d'intérêt proche de zéro dans ces pays.

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Joseph E. Stiglitz

Writing for PS since 2001
303 Commentaries

Joseph E. Stiglitz, a Nobel laureate in economics and University Professor at Columbia University, is a former chief economist of the World Bank (1997-2000), chair of the US President’s Council of Economic Advisers, and co-chair of the High-Level Commission on Carbon Prices. He is a member of the Independent Commission for the Reform of International Corporate Taxation and was lead author of the 1995 IPCC Climate Assessment.

Hamid Rashid

Writing for PS since 2006
6 Commentaries

Hamid Rashid, a former director-general for multilateral economic affairs at the Ministry of Foreign Affairs in Bangladesh, is Chief of Global Economic Monitoring at the United Nations Department of Economic and Social Affairs.

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0 Comments on this paragraph, 26 Comments on this article

Bakhodur Eshonov Mar 6, 2016

"...Time-bound capital controls to stem outflows..."
Time-bound or bound to end-less turbulences at global markets ???
A new reply to this comment has been posted.
Barry McHugh Feb 26, 2016

Metrics can be provided to bond holders to push back against any rise in interest repayments (nominal rate or retranslation based). My idea is that NDP not GDP be used as many developing economies, especially INDIA, (not China) have had a lower rate of fixed capital formation. So their lower stock of capital to be depreciated using the Net Domestic Product metric can be put as a favourable Economic measure that can be supported by bond holders by the demanding lower rates. Almost by definition, G20 themselves will have higher depreciation in the NDP metric. That's risky if the NDP metric is truer and their bond investments are concentrated there in the G20 also. A caution though is that a Government might want to free up the macro-pru and thin cap rules for their domestic banks as the lower rates may compress their margins. Stocks at home should do well though due to the lower rates. A maverick politician would be needed to get this through.
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KC LOH Feb 24, 2016

I thought China's demand for natural resources is still growing, although at a slower pace?
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kiers sohn Feb 23, 2016

Imagine the TPP. cross border banking is now a REQUIRED part of merchandise trade.
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Emilio Zuniga Feb 22, 2016

Macro prudencial policies already are aware of the dangers of short term capital inflows or outflows. The IMF aprove such controls. The fact with major emerging countries problems ( Brazil, South Africa, Russia) and others, is the populists policies applied during the commodity boom years, that Mr Stiglish so much praised.
- Jose araujo Feb 22, 2016
  
  Major problem with development countries is that they actually promoted the oligarchy desires, which controlled the resources of the country.The very few good things that were made, were what you call populist measures...
  
  No real structural reforms were made, no market eficiencies were promoted, but in the mean time our countries were welcoming this money and asking no questions. We were protecting oligarchs and wrong development models, for the sake of money...
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Greg Keif Feb 21, 2016

There was a lack of concern when this hot money came into these countries and ran up asset prices. It was a great thing when alll is going up, up,up. But when the market swings the other way the call is always for capital controls. Controlling the inflows in the first place, and the bubbles it creats whould perhaps be more prudent.
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Rob Carter Feb 21, 2016

Konstanzhoglo Konstanzhoglo has just replied to your comment on "Closing Developing Countries’ Capital Drain". Wrote to me saying:- Dear Rob, "may be it was not a fault of unseasoned readers but you, please check the differencies of the terms "outflow" and "net outflow", and you will be aworded.8)
However I must still answer "No to you wrong "Stiglitz says in Pargraph 3 "Net" Capital Inflow $2.2tr and in Paragraph 5 he says "Net' Capital Outflow $600bn so to me that is a net $1.6tr "net" capital inflow. I don't see Stiglits mentioning "inflow" without the word "Net" against that and "outflow" without the "Net" proviso.
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Hamid Rizvi Feb 20, 2016

What is the cause of this flight of capital from the developing countries? Or is it even a flight versus a slow down both the availability of easy credit and the demands of the developing countries which the article alludes to.
I would be more interested to know if there is indeed a predictable trend of credit availability?
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LAXMIDHAR N BHOLA Feb 20, 2016

During course correction_& low movement of commodity cycle, some economies are bound to adjust their own to survive.
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Rob Carter Feb 20, 2016

Rob Carter
I feel so sorry for the less 'in-depth' readers o such works. One can not quickly read such good writings like this so I complement Stiglitz, but I do wish he'd started with a simpler comparison of Developing Nations changes of payment balancing factors. Talking $Millions $Billion, & $Trillions within a convoluted technical article, falls short of average comprehension because people can't easily grasp the poor comparison of one year or Nation's 6 zero digits millions, compared with another's 9 zero Billions and other 12 zero trillions of scale that simply can't compare. EG ok a drop of $2.2tr by $800bn with $600bn ofthat accounted means only 1and 8 zeros against $2.2 and 11 more zeros a big reduction not comprehended by most.

Closing Developing Countries’ Capital Drain
Developing countries are bracing for a major slowdown this year. And what is important to bear in mind is that the slowdown in China and the deep recessions in the Russian Federation and Brazil only explain part of the broad falloff in growth.
PROJECT-SYNDICATE.ORG|BY JOSEPH E. STIGLITZ AND HAMID RASHID
- Konstanzhoglo Konstanzhoglo Feb 21, 2016
  
  may be it was not a fault of unseasoned readers but you, please check the differencies of the terms "outflow" and "net outflow", and you will be aworded.8)
  A new reply to this comment has been posted.
A new reply to this comment has been posted.
Rob Carter Feb 20, 2016

Rob Carter

I feel so sorry for the less 'in-depth' readers o such works. One can not quickly read such good writings like this so I complement Stiglitz, but I do wish he'd started with a simpler comparison of Developing Nations changes of payment balancing factors. Talking $Millions $Billion, & $Trillions within a convoluted technical article, falls short of average comprehension because people can't easily grasp the poor comparison of one year or Nation's 6 zero digits millions, compared with another's 9 zero Billions and other 12 zero trillions of scale that simply can't compare. EG ok a drop of $2.2tr by $800bn with $600bn ofthat accounted means only 1and 8 zeros against $2.2 and 11 more zeros a big reduction not comprehended by most.

Closing Developing Countries’ Capital Drain
Developing countries are bracing for a major slowdown this year. And what is important to bear in mind is that the slowdown in China and the deep recessions in the Russian Federation and Brazil only explain part of the broad falloff in growth.
PROJECT-SYNDICATE.ORG|BY JOSEPH E. STIGLITZ AND HAMID RASHID
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Steve Hurst Feb 19, 2016

Well as they say, when the tide goes out you can see who has been swimming naked. Trying to stop the tide go out is a forlorn hope. This all seems like King Canute economics. The brain dead thing was building dependency on transients
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dan baur Feb 19, 2016

Capital control is a brain dead idea. Good thing no one pays attention to the stiglitz.
- dan baur Feb 19, 2016
  
  Hey Michael Public: you and Jose araujo are not predictable? Still, predictability is not your biggest flaw.
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- Michael Public Feb 19, 2016
  
  More predictable than Stiglitz is Dan Baur's comment accompanying every Stiglitz article.
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Jose araujo Feb 19, 2016

Clearly something has to me made about this. This countries were already robbed by the oligarchies and now they are going to be robbed by western financial institutions.

We have been watching the blood money flood our institutions, hell most of the countries was actively promoting it with the golden visas policies and haply selling the crown jewels to the Russians, Brazilians, Saudis, Chinese, etc so what are we going to do now.

Are we going to pay it or are we going to make the population of the developing countries pay for it?

Shouldn't we just make the oligarchs send back the money?
- jagjeet sinha Feb 19, 2016
  
  @JoseAraujo
  Great comment.
  The population of the Developing Countries - first robbed by their Oligarchs, now by a Financial Architecture whose redesign perhaps the greatest piece of financial engineering Nobel Minds need to address.
  The predicament is that Turkeys never vote for Christmas.
  And so the unending misery for billions so screwed - in The Third World.
  Despite the enormous liquidity fountains flowing out of Western Central Banks since the 2008 meltdown.
  The US obviously driven by its internal Sovereign prerogative to raise interest rates.
  The blessings of cheap oil perhaps prolonging the sunshine.
  With perhaps both Oil and $ Interest Rates headed northwards, the double whammy sending shivers already.
  
  While principled objections to Capital controls abound, given the political nature of the process that powers the spigots - instead of raising interest rates as the classical knee-jerk reaction inspired by IMF doctors - capital controls suitably disguised perhaps a more appropriate response that keeps the Sovereign Economi Development machinery better oiled. In the past, the unfortunate price has always been paid by citizens of the Developing countries, while the Oligarchs indulged in one obfuscation after another, always pointing the blame to events beyond control.
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Jose araujo Feb 19, 2016

Taking into consideration that when we are talking about developing countries we are mostly talking about oligarchies (Brazil, China, India, Russia, etc) does it make any sense to talk about capital controls...

The capital holders are the country owners, they determine policy...

On the other side, we have the lenders, who have been lending money to this economies without taking into consideration the political risk and the morals of the country.

Maybe a generalized bankruptcy and default of this loans to developing countries will make the legislation and regulation change in developing countries, making it impossible to be associated with this oligarchies.

In the end, we cannot all be Swiss, some countries have morals, even in the financing industry.
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Michael Public Feb 19, 2016

As someone who lives in one of these countries and can tell you these are needed. The hot money flows in and the merchant bankers get rich. Then it flows out and main street gets hammered. Hot money never invests in anything that generates jobs, infrastructure or enduring benefits of any sort. The only thing the current arrangements service is speculators, which society has no need for.
- Michael Public Feb 19, 2016
  
  Correct Jose - by the time you read it in the newspapers it is gone. The rules are for next time around.
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- Jose araujo Feb 19, 2016
  
  I think one of the main problems here is that the money has already fled this countries. We see it in Paris, London or any other city in the world.
  
  So the money inflows were loans that compensated the outflow of the blood money.
  
  Now the question is, if this oligarchies default are the taxpayers from the developed countries going to pay for it, or are the governments that promoted the golden visas make something about it?
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Jacob Alhadeff Feb 18, 2016

Why wouldn't the imposition of capital controls eventually increase capital flight the way controls on the Chinese stock market scared investors which further brought down stock prices? Also, if one country imposes capital controls wouldn't the bank just increase their outflows from a different reserve poor commodity based developing economy?
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M M Feb 18, 2016

In a globalised, free and out of control economies any attempt to introduce any form of capital control shall be counter-productive. The “elephant” in the room is not only the falling commodity prices but the “Asset Bubble” that is about to burst at any time and when this happens , the 2008 tsunami will look like a mild tidal wave….
- Michael Public Feb 19, 2016
  
  I think you mean any form of capital control will restrict inflows. This is what is needed. But it needs to be designed in a way that does not impact proper investment while discouraging speculative investment. Obviously there a hundred shades of grey inbetween but this does not mean a line in the sand should be drawn somewhere.
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