Publications /
Policy Paper

Back
Emerging Markets and Developing Economies in the Global Financial Safety Net
Authors
Amshika Amar
February 16, 2024

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

  • May 11, 2022
    The Policy Center for the New South is pleased to organize an online parallel event in the framework of the Annual Interdisciplinary Sovereign Debt Conference, organized by the Graduate Institute of Geneva, the European University Institute and the GeorgeTown University. The objective o...
  • May 11, 2022
    Cet atelier a servi de plateforme pour présenter les ouvrages suivants :  - L'édition 2022 du Rapport Annuel sur la Géopolitique de l'Afrique : Ce rapport est publié annuellement par le PCNS et a pour objet de relater, étudier et analyser les faits géopolitiques majeurs qui ont jalonné...
  • Authors
    May 10, 2022
    Les crises internationales de type de la guerre en Ukraine constituent des ruptures historiques qui induisent des changements profonds de paradigmes, mais aussi de systèmes d’alliances et de marges d’influence. Elles produisent, à terme, une nouvelle configuration des rapports de force, ce qui exige des acteurs des capacités d’anticipation et d’adaptation. Le continent Africain se trouve géopolitiquement, et en quelque sorte géographiquement, à la première loge de la guerre d ...
  • May 10, 2022
    This is an exclusive interview with Rim Berahab, Senior Economist at the Policy Center for the New South, who engages with Helmut Sorge, Columnist at the Policy Center for the New South, in a conversation about the great threat of the climate crisis. Rim Berahab is the author of Chapter...
  • May 06, 2022
    In a large majority of countries political leaders have tried to place regional integration in the center of their economic growth and development strategies, yet, despite all attempts, A ...
  • Authors
    May 6, 2022
    In addition to the deaths and destruction in Ukraine, the Russian invasion has caused several significant shocks to the global economy. In addition to the geopolitical consequences of the war, reinforcing the downward trend in trade globalization and financial integration, new rounds of disruptions to supply chains and higher commodity prices have already led to downward revisions in economic growth projections, accompanied by higher inflation. The commodity price shock, intensify ...
  • April 29, 2022
    Following on the heels of the COVID-19 pandemic and severe drought in North Africa, the Russian invasion of Ukraine – large exporters of food and, in the case of Russia, energy— may inflict increased hunger on the food insecure in Morocco – despite mitigating measures by the government. Morocco is so far successfully shielding its large poor and vulnerable population by subsidizing essential commodities. With memories of the violent protests during the 2007/08 food and fuel crisis s ...
  • Authors
    Sebastian Carranza
    April 28, 2022
    Last March, a proposal of dollarizing Argentina’s economy arrived at its Congress. We summarize here the potential consequences of such a route in case the bill succeeds in getting approval. First, we point out the broad implications of dollarizing an economy. Then, we set out some cases of Latin American experiences with dollarization. Finally, we address the case of Argentina. The main potential benefit of dollarization would be elimination of domestic inflation, but at a very hig ...
  • April 25, 2022
    Retrouvez en exclusivité l’interview de Abdelhak Bassou, Senior Fellow au Policy Center for the New South, qui se livre à Helmut Sorge, Columnist au Policy Center for the New South, au sujet des multi-disparités présentes en Afrique. Abdelhak Bassou est l’auteur du Chapitre 5 du rapport...
  • Authors
    April 22, 2022
    Emerging market and developing economies (EMDE) face a common set of external shocks: rising energy and food prices; tightening in global financial conditions caused by the prospect of sharper interest rate hikes and anticipation of "quantitative tightening"; and return of restrictions on mobility in China, on account of the Covid zero policy, leading to slumping in growth and weakening one of the primary growth drivers for the other EMDE. However, the impacts of those common shocks ...