Publications /
Policy Paper

Back
Download PDF
Emerging Markets and Developing Economies in the Global Financial Safety Net
Authors
Otaviano Canuto
Amshika Amar
February 16, 2024
Related topics: 
Economy

When countries face external financial shocks, they must rely on financial buffers to counter such shocks. The global financial safety net is the set of institutions and arrangements that provide lines of defense for economies against such shocks.

From any individual country standpoint, there are three lines of defense in their external financial safety nets: international reserves, pooled resources (swap lines and plurilateral financing arrangements), and the International Monetary Fund.

We argue here that there is a need to extend and facilitate access to the ultimate global financial safety net layer: the IMF. We illustrate that by pointing out how Morocco and Mexico have boosted their defensive power by having access to IMF precautionary lines of credit.

*The authors wish to thank Abdelaaziz Ait Ali for comments on an earlier version, without implicating him in any way.

RELATED CONTENT

  • Featured Q & A: How Will the Fed’s Rate Hike Affect Latin America?
    Authors
    Uri Dadush
    January 12, 2016
    Q: The U.S. Federal Reserve on Dec. 16 raised interest rates, ending what Fed Chairwoman Janet Yellen called an “extraordinary seven-year period” during which policymakers kept the federal funds rate near zero in an effort to support the economy. How will the Fed’s action affect Latin American economies, many of which are struggling with anemic growth and low prices for their commodity exports? How will the interest rate hike affect Latin American countries’ ability to pay off their ...
  • Walking the Talk of the Africa Rising Narrative
    Authors
    Nisrine Ouazzani
    January 6, 2016
    The economic growth of the African continent and its positioning as an emerging force is a reality no longer questioned. Optimism surrounding the Africa rising narrative is supported by a growing young workforce, an expanding middle class, new discoveries of natural resources and minerals, relative political stability and infrastructure developments. Economic and international financial actors now recognize the potential that the continent represents for the world economy, consider ...
  • Download PDF
    The Improving Global Outlook and Morocco
    Authors
    Uri Dadush
    December 23, 2015
    Global economic growth is likely to be a little better in 2016 than this year’s lackluster outcome. The ongoing slow recovery in the United States and Europe is likely to continue. However, weakness in China as well as several large emerging markets, and sluggishness of world trade, mean that risks are weighted on the downside of this forecast. Morocco, which is reliant on European markets, is a heavy importer of oil, and whose currency has devalued in effective terms, should find t ...
  • Download PDF
    Commodities: a new era
    Authors
    Yves Jégourel
    December 14, 2015
    The end of supply chain is the natural corollary of the sustained price fall of virtually all commodities observed over the past many months. If it appears premature to state exactly what is the impact of this deconsolidation in the commodities value chain, it is believed that the strategic role of physical trading is strengthening. Under such circumstances, the industrial strategies of developing countries and commodity exporters may have to evolve and, in priority, foster optimizi ...
  • The Truth About Trade
    Authors
    Uri Dadush
    December 8, 2015
    Trade negotiators rarely get to celebrate a victory. The United States, for example, has been negotiating over 15 bilateral free trade agreements, with none concluded since the Korea-US agreement was finalized at the end of 2010. This makes the recently finalized Trans-Pacific Partnership (TPP)agreement between the United States and 11 other countries all the more remarkable. But the TPP still faces major hurdles, not least a divisive ratification debate in the U.S. Congress, which ...
  • Download PDF
    Rethinking the Mediterranean Strategic Agenda in an Evolving Environment
    Authors
    Karim El Aynaoui
    Karim El Mokri
    Sara Hasnaa Mokaddem
    Abdelaaziz Ait Ali
    December 7, 2015
    The Euro-Mediterranean Partnership was initiated with the aim to build a space of shared prosperity and security among all the countries in the region. The achievement of this objective, however, continues to be challenged by several geopolitical, economic and social factors. In such a context, there is now a greater urgency to adapt the approach and the instruments, thus allowing Euro-Mediterranean partners to seize opportunities towards an effective area of shared stability and pr ...
  • Download PDF
    Diaspora, Development and Morocco
    Authors
    Uri Dadush
    November 25, 2015
    The contribution that the diaspora makes to development in the country of origin is examined. Drawing on a recent World Bank survey of migrants from the MENA countries, the needs of the diaspora and the development role it can play through its organizations are reviewed. A constructive interaction with the diaspora can be greatly enhanced by supportive policies in the country of origin. The main focus of the paper is on the Middle East and North African region, and more specifically ...