TY - JOUR
T1 - Commercial finance for development: a back door for financialisation
AU - Karwowski, Ewa
PY - 2021/5/17
Y1 - 2021/5/17
N2 - SUMMARY: The global Covid-19 pandemic has accelerated a trend under way for the last decade: the enlistment of private-sector commercial finance for development. This finance can be brought in through (1) regular cross-border flows, (2) blended finance and (3) impact bonds. This briefing argues that intensified foreign financial inflows are likely to draw African economies further into financialisation, which increases financial instability and can undermine the democratic process, jeopardising just socio-economic development. Specifically, the short-termism of portfolio flows requires costly reserve accumulation, foreign direct investment exposes firms to demands for shareholder value generation, and external debt introduces exchange rate risk for domestic borrowers.
AB - SUMMARY: The global Covid-19 pandemic has accelerated a trend under way for the last decade: the enlistment of private-sector commercial finance for development. This finance can be brought in through (1) regular cross-border flows, (2) blended finance and (3) impact bonds. This briefing argues that intensified foreign financial inflows are likely to draw African economies further into financialisation, which increases financial instability and can undermine the democratic process, jeopardising just socio-economic development. Specifically, the short-termism of portfolio flows requires costly reserve accumulation, foreign direct investment exposes firms to demands for shareholder value generation, and external debt introduces exchange rate risk for domestic borrowers.
UR - http://www.scopus.com/inward/record.url?scp=85106017856&partnerID=8YFLogxK
U2 - 10.1080/03056244.2021.1912722
DO - 10.1080/03056244.2021.1912722
M3 - Article
SN - 0305-6244
JO - Review of African Political Economy
JF - Review of African Political Economy
ER -
