By the numbers, reverse capital flow peaked at $800 billion in 2008, when the global financial crisis erupted, then moderated through 2015. The main sources of the negative net resource transfers are investments abroad in safe instruments, primarily low-yielding US Treasury bonds. What is somewhat infuriating about the UN perspective is that it certainly seems to pin most of the blame for unfavorable capital flows on the developing world, but conveniently fails to acknowledge that it is the international financing framework imposed by the developed world that has handcuffed would-be recipients of developmental capital flows into a somewhat self-defeating conservative fiscal management approach. The second is the demand of the developed world that developing countries “get their financial houses in order” by reducing external debt and accumulating huge foreign reserves as safety nets. To be fair, the developing world, particularly countries in this part of the world that were snakebitten by the Asian financial crisis in 1997-1998, didn’t need much convincing.

Source: Manila Times March 17, 2017 16:52 UTC