1991
1992
1993
1994
1995 (I)
7,137.0
6,994.7
6,945.9
7,099.6
8,047.7
8,689.8
Developing countries
1,681.28
1,703.69
1,735.69
1,859.19
2,105.00
2,200.18
Asia
838.28
861.37
869.10
929.69
1,093.74
1,181.70
How a market develops, including the orderly introduction of new instruments, is an important element of managing capital flows. In a broader since, the kinds of instruments available and favored (by the tax structure or by other regulations) in a market and the extent of foreign ownership allowed may also have an effect on the allocation of investment in the real sector. For example, in markets in which bonds are readily available or pension funds are impotent buyers, more capital is likely to be available for long-gestating projects.
Two conclusions emerge from this analysis. First, capital flows are inherently neither good nor bad. They have a great potential to be either, depending on how productively they are used or on whether they are allowed to distort economic incentives and decisions. The contrast between growth in East Asia and stagnation in Latin America is instructive in this regard (There are significant exceptions to this generalization in both regions-the Philippines and other countries come to mind). Second, realizing positive benefits from capital inflows depends on sound macroeconomic and sectoral policies in the recipient country. Capital flows are a complement to good policy, not a substitute for it.
The List of Literature.
1. Managing Capital Flows in East Asia. A world Bank Publication. Wash 1996y. p> 2. Private Market Financing for Developing Countries. IMF wash 1995 y.
3. The World Economy Global trade policy Edited by Sven Arndt and Chris Milner. Oxford, 1996 y. p> 4. International Studies Review Edited by ISA and Thomas S. Watcon Oxford Milner Sping 2000 y. p> 6. The Would Bank Research Program. The Would Bank Research. p> 7. Alan Greespon. Financial markets// New Internation-list. may 1999 y. c15-16
