U.S. private bank flows to Africa

Article Abstract:

Sub-Saharan Africa will need large capital inflows throughout the 1980s to make up for declining food production, terms of trade and per capita GNP. The region is currently a net exporter of capital to the industrialized nations. External borrowing from private banks rose sharply in the 1970s, with annual flows peaking at $2.8 billion in 1978, before declining. U.S. private banks' $4.2 billion exposure in sub-Saharan Africa represents about 15 percent of the region's outstanding private bank debt; about 80 percent of the lending came from the nine largest U.S. banks, and 51 percent was in the form of short-term (less than one year) credits. Repayment is constrained by deflation in the developed countries, which has caused African exports and terms of trade to deteriorate. New lending by U.S. banks has decreased since the 1982 debt crisis, and with multilateral and bilateral funds also limited, Africa's low-income countries are virtually condemned to declining living standards.

Africa, Foreign loans

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The World Bank and the Baker initiative

Article Abstract:

The Baker initiative, placed before the World Bank in Oct 1985, responded to the debt crisis occurring in several developing countries, by proposing that national debts in 15 countries be rescheduled and placed in the hands of private sector banks. The initiative, proposed by US Treasury Secretary James Baker, also requested increased lending from the World Bank and the Inter American Development Bank to these 15 debtor nations. The World Bank received the initiative favorably, as evidenced by its granting $13.2 billion of the $13.5 billion in Baker initiative loans requested. The Baker initiative is discussed in terms of its effect on World Bank lending policies, the Mexico debt position and repayment plan, the revitalization of the 15 countries' real economic growth and foreign exchange systems, and the World Bank guarantees of private bank lending to debtor nations.

Management, Finance, Developing countries, World Bank, National debt, South America, Public debts, Inter-American Development Bank, Baker, James A. (American electronics executive)

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Canada in the USA: foreign direct investment flows reversed

Article Abstract:

The flow of direct investment from Canada into the US began to exceed US inflow in 1975. Canadian outflow has averaged $2.5 billion (Canadian) per year since then. The US market's diversity and size is the primary reason for Canadian direct investment, but other reasons can be classified as 'pull factors' and 'push factors.' Pull factors are generally related to the nature of US markets and economic policy. Push factors include: US protectionist measures aimed at Canadian exports; Canadian government-decreed interest deductions for Canadian-based multinational enterprises; expanded mechanisms for the internal movement of funds allowed to multinationals, such as transfer pricing; and the desire to reduce risk, both financially and politically.

United States, Canada, International business enterprises, Multinational corporations, International relations, United States foreign relations, Canadian foreign relations, Investment tax credit, Corporations, Canadian

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