1. Global Crisis & Developing Countries
Presented by: Abbas Haider &
Omer Mukhtar Gondal

2. Introduction
The world is in crisis the sources of which lie in financial and other policies of the developed countries

3. Global crisis and developing countries
Investing in toxic or depreciating assets
There has been a big drop in funds flowing to developing countries
Bond business in emerging markets fell
According to Institute of international finance there will be a reverse flow in bank credit

4. Global crisis and developing countries
The FDI flow worldwide is slowing down
Exports of developing countries fell drastically
Drop in manufactured exports such as electronic products, textile and clothing
Commodity exporting developing countries have also been hit by sudden drop in demand and prices
Economists commodity dollar index for all items fell by 42%

5. Global crisis and developing countries
For poorer countries such as Africa, the fall in commodity prices was the main mechanism by which global crisis was transmitted to them.
Countries like India that benefitted from outsourcing by US multinationals also got affected as the business of western firms shrink
Remittances of the migrant workers

6. Global crisis and developing countries
Developing countries are facing a worsening of trade financing as the banks have tightened supply of credit
This has reduced exports
Deterioration in the balance of payments and foreign reserves
IMF help required

7. Suggestions
It would be useful for developing states to prepare to deal with crisis at the national, regional and international level
For countries that have fallen into new debt crisis, a new round of debt relief and cancellation is required
To prevent countries from falling in debt default, an international debt arbitration system is required.
Mechanisms to deal with the instability of demand and prices of exportable commodities

8. Conclusion!!