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DISCUSSION PAPER

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Trends in PrivateInvestment in Developing

Countries

Statistics for 1970-96

Jack D. GlenMariusz A. Sumlinski

INTERNATIONALFINANCE

CORPORATION

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IFC Discussion Papers

No. 1 Private Business in Developing Countries: Improved Prospects. Guy P. Pfeffermann

No. 2 Debt-Equity Swaps and Foreign Direct Investment in Latin America. Joel Bergsmanand Wayne Edisis

No. 3 Prospects for the Business Sector in Developing Countries. Economics Department, IFC

No. 4 Strengthening Health Services in Developing Countries through the Private Sector.Charles C. Griffin

No. 5 The Development Contribution of IFC Operations. Economics Department, IFC

No. 6 Trends in Private Investment in Thirty Developing Countries. Guy P. Pfeffermannand Andrea Madarassy

No. 7 Automotive Industry Trends and Prospects forInvestment in Developing Countries.Yannis Karmokolias

No. 8 Exporting to Industrial Countries: Prospects for Businesses in Developing Countries.Economics Department, IFC

No. 9 African Entrepreneurs-Pioneers ofDevelopment. Keith Marsden

No. 10 Privatizing Telecommunications Systems: Business Opportunities in Developing Countries.William W. Ambrose, Paul R. Hennemeyer, andJean-Paul Chapon

No. 11 Trends in Private Investment in Developing Countries, 1990-91 edition. Guy P. Pfeffermannand Andrea Madarassy

No. 12 Financing Corporate Growth in the Developing World. Economics Department, IFC

No. 13 Venture Capital: Lessons from the Developed World for the Developing Markets. Silvia B. Sagariwith Gabriela Guidotti

No. 14 Trends in Private Investment in Developing Countries, 1992 edition. Guy P. Pfeffermannand Andrea Madarassy

No. 15 Private Sector Electricity in Developing Countries: Supply and Demand. Jack D. Glen

No. 16 Trends in Private Investment in Developing Countries 1993: Statistics for 1970-91.Guy P. Pfeffermann and Andrea Madarassy

No. 17 How Firmns in Developing Countries Manage Risk. Jack D. Glen

No. 18 Coping with Capitalism: The New Polish Entrepreneurs. Bohdan Wyznikiewicz, Brian Pinto,and Maciej Grabowski

No. 19 Intellectual Property Protection, Foreign Direct Investment, and Technology Transfer.Edwin Mansfield

No. 20 Trends in Private Investment in Developing Countries 1994: Statistics for 1970-92. Robert Millerand Mariusz Sumlinski

(Continued on the inside back cover.)

INTERNATIONALFINANCE

____._____CORPORATION

DISCUSSION PAPER NUMBER 34

Trends in PrivateInvestment in Developing

Countries

Statistics for 1970-96

Jack D. GlenMariusz A. Sumlinski

The World BankWashington, D.C.

Copyright © 1998The World Bank and

International Finance Corporation1818 H Street, N.W.Washington, D.C. 20433, U.S.A.

All rights reservedManufactured in the United States of AmericaFirst printing May 1998

The International Finance Corporation (IFC), an affiliate of the World Bank, promotes the economicdevelopment of its member countries through investment in the private sector. It is the world's largestmultilateral organization providing financial assistance directly in the form of loan and equity to privateenterprises in developing countries.

To present the results of research with the least possible delay, the typescript of this paper has not beenprepared in accordance with the procedures appropriate to formal printed texts, and the IFC and the WorldBank accept no responsibility for errors. The findings, interpretations, and conclusions expressed in thispaper are entirely those of the author and should not be attributed in any manner to the IFC or the WorldBank or to members of their Board of Executive Directors or the countries they represent. The World Bankdoes not guarantee the accuracy of the data included in this publication and accepts no responsibilitywhatsoever for any consequence of their use. Some sources cited in this paper may be informal documentsthat are not readily available.

The material in this publication is copyrighted. Requests for permission to reproduce portions of it should besent to the Office of the Publisher, at the address shown in the copyright notice above. The World Bankencourages dissemination of its work and will normally give permission promptly and, when the reproductionis for noncommercial purposes, without asking a fee. Permission to copy portions for classroom use is grantedthrough the Copyright Clearance Center, Inc., Suite 910, 222 Rosewood Drive, Danvers, Massachusetts 01923,U.S.A.

ISSN (IFC Discussion Papers): 1012-8069ISSN (Trends in Private Investment in Developing Countries): 1018-208XISBN 0-8213-4232-0

Jack D. Glen is lead economist and Mariusz A. Simlinski is a research analyst in the Economics Department ofIFC.

The first edition of this serial publication was cataloged by the Library of Congress as follows:

Library of Congress Cataloging-in-Publication Data

Pfeffermann, Guy Pierre.Trends in private investment in thirty developing countries / Guy

Pfeffermann, Andrea Madarassy.p. cm.-(Discussion paper / International Finance

Corporation ; no. 6)Includes bibliographical references.ISBN 0-8213-1352-51. Investments-Developing countries. I. Madarassy, Andrea,1964- . II. Title. III. Series: Discussion paper (InternationalFinance Corporation) ; no. 6.HG5993.P48 1989332.6'7314'091724-dc2O 89-22588

CIP

Contents

Foreword ...................................... v

Abstract . vii

1. Salient Points .......................................... 2

Asia .......................................... 5

Latin America and the Caribbean .........................................S5

Europe, Middle East, and North Africa .......................................... 6

Sub-Saharan Africa ......................................... 6

2. Comparisons with Developed Country Levels of Investment ..................................7

3. Domestic Capital Markets as Sources of Private Investment ...................................9

References .. 13

Appendix 1: Methods and Sources .. 15

Appendix 2: Table A 2.1 Investment as a share of GDP . .17

..

Foreword

The ninth edition of Trends in Private Investment in Developing Countriesprovides private and public investment data through 1996. This year's edition includesinformation about levels of investment in the G4 countries and about domestic capitalmarkets as sources of finance for investment. There is great variation in the level ofinvestment in the G4. Regarding domestic capital markets, while stock and bond marketshave grown rapidly since 1980, they remain rather unimportant in most developingcountries as sources of finance for private investment.

Guy PfeffermannDirector, Economics Department

& Economic Adviser to the Corporation

v

I

Abstract

Private investment in developing countries continued its upward trend in 1996,the most recent year for which data exist, on an unweighted average basis. Publicinvestment rates continued a decline that began in the early 1980s. The largest increasesin private investment between 1995 and 1996 occurred in Malawi, Mauritania, Benin,Papua New Guinea and Bolivia, suggesting that the private firms in some of the world'spoorest countries are showing a strong supply response. This year's edition includesstatistics for four major OECD countries for comparison with developing country trends.It also includes a discussion of domestic capital markets in financing private investment;even though stock and bond markets have grown at a rapid rate, they play only a minorrole in financing investment in the developing countries where banks are a moreimportant source of financing.

vii

1. Salient Points

Private investment remained high in developing countries in 1996 relative to the1970s and 1980s, but there was a slight decline relative to 1995. As can be seen inFigure 1, the GTDP weighted average declined by about 2 percentage points, putting itback to the level of 1993. In contrast, the simple average experienced only anegligible dec]line in 1996, a reflection of the importance of two countries - Indonesiaand Republic of Korea, both economically large countries with high levels of privateinvestment - on the global sample. Data for those two countries for 1996 is not yetavailable and so they are not included in the average for that year, but are included inprevious years. Excluding those two countries from the weighted average for theprevious year produces a global average that declined only marginally in 1996 fromits 1995 value. Without those two countries included in the previous year, the simpleaverage continued its upward trend in 1996.

Fig. 1. Private Investment

20 -.- -weighted average -Simple average ...............................................

48..

2.~~~~~ol

12 10 1972 1974 19761--------- ------- - 9 -- -- 1986 -198 1990199294 110 ........................................................................................................

6 .......................................................................................................

4 .......................................................................................................

2 .......................................................................................................

1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996

Figure 2 presents the complement to private investment: public investment. Likeprivate investment, public investment also declined in 1996 to 5.7 percent of GDP,down from 6.5 percent in 1995 and an average of 8.2 percent for the 1980s. As in thecase of private investment, the public investment average was brought down in partowing to the exclusion of Indonesia and Republic of Korea from the sample; both of

1

Fig. 2. Public Investment

18 --------- ------

-Weighted average -w- Simple average16 .................................................... ....... .............

14 --------- ----- ----------------------- -------------------------- -------------- ------------

12 ......................................................................................

10 ........................................................................................................

16

O4 4

0

1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996

those countries had levels of public investment above the global average. Overall,public investment rates have been declining since the early 1980s.

These global averages mask wide disparities both in levels of private and publicinvestment and in the changes in those averages within the different regions, as seenin Figures 3-6. East Asia remained the region with the highest level of privateinvestment, a level that increased even further in 1996 (see below). Significantincreases in private investment occurred in South Asia, with Europe, Middle East,and North Africa (EMENA) and Sub-Saharan Africa also posting marginal gains overthe previous year. These four regions each achieved levels of private investmenthigher than had been experienced for several years. In contrast, private investmentdeclined in Latin America for the second year in a row, but it remains above theaverage for the 1970s and 1980s.

Public investment moved down marginally in all regions except Sub-SaharanAfrica and Latin America, where it remained nearly constant. It is notable that publicinvestment has declined in every region in the 1990s relative to the 1980s. Moreover,public investment is significantly lower than private investment in each region, oftenless than half the level of private investment.

2

Fig. 3. Private Investment by Developing Region(wAeighted averages)

30

25 . .............................................................

2 0- . ........... ................

10S. ........... ................................................................................

1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996

- East Asia -EMENA -- LAC South Asia SSAFR

Fig. 4. Private Investment by Developing Region(simple averages)

30 . .... ......................... ................. ......... .... ..... .................. ......... ,

20- . ...... ... ...... .....................

15 .. .. .. .. . ...... . . . . . . . . . . . . . .. . . . . . . . . . . . . .

5- ...........................................................................................

0

1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996

-. East Asia -- :-EMENA LAC - South Asia -- SSAFR

3

Fig. 5. Public Investment by Developing Region(weighted averages)

30 ............................................................................................................

25 ........................................................................................................

20 ...........................................................................................................

10

5 ............................................ n................

0

$11°, tI 9#q° 4 ,o .1 01O 9<0 10, -1,0 0#6 40%99 9 ^

-East Asia -- EMENA &- LAC -a- South Asia -SSAFR

Source: OECD

Fig. 6. Public Investment by Developing Region(simple averages)

25 . ..........................................................................................

20 . ..........................................................................................

g10 ............... ...... ..........

51 ...........................................................

0

1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996

- East Asia -- EMENA -& LAC -a- South Asia SSAFR

4

Asia

East Asian private investment increased by 2.2 percentage points of GDP in 1996.This increase, however, is strongly influenced by the exclusion of Indonesia from thesample in 1996; Indonesian private investment equaled 19.3 percent of GDP in 1995,well below the regional average. Thailand remained the country with the highestlevel of private investment in the region in 1996 - 32.9 percent of GDP - down 1.2percentage points from its 1995 value, but roughly equal to its overall average for the1990s. Malaysia also experienced a decline in private investment to 29.2 percent ofGDP, but that level remains well above the country's average for the 1990s.

Public investment in East Asia declined marginally in 1996 relative to 1995, butremains well above the average of the last 27 years. Regional public investment isalso well above the global average. The decline in 1996 reflects primarily theabsence of Inclonesia and Republic of Korea from the sample, both of which hadabove average levels of public investment in previous years. Thai public investmentcontinued its upward trend, reaching a level of 9.2 percent of GDP, its high for thedecade. Papua New Guinea continues to have the lowest level of public investmentin the region.

South Asian private investment increased in 1996 to 15.3 percent of GDP from14.7 percent in 1995. Investment increased in each of the three countries in theregion, but investment remained below the global average, except in India. Economicreforms and strong growth helped to push up the rate of private investment in India in1996 to 16.8 percent of GDP, the first time that India has been above the globalaverage since we have been compiling statistics.

Public investment in South Asia declined by 0.8 percent of GDP in 1996, whichcontinues the region's overall decline in the 1990s. Public investment is now belowthe average level for the 1970s and 1980s. The regional decline has been a result ofsharp declines in India and a marginal decline in Pakistan, Bangladesh havingincreased its public investment over the last two decades.

Latin America and the Caribbean

Private investment in Latin America declined in 1996 to 14.7 percent of GDP, itslowest level since 1993. The decline reflected the sluggish economy in Brazil, whereinvestment fell by 1.5 percent of GDP to its lowest level since 1992. Investmentincreased marginally in Argentina, but remained flat in Mexico. Within the region,Chile, Panama and Peru were the countries with the highest levels of privateinvestment. Venezuela experienced the lowest level of private investment in theregion.

Public investment in Latin America remained roughly flat in 1996 and well belowthe levels of the 1970s and 1980s. Declines in public investment have been

5

particularly sharp over the last three decades in Argentina, following a significantreform program, and in Brazil, Chile, Mexico and Peru. Public investment hasincreased notably in Colombia and Venezuela.

Europe, Middle East, and North Africa

The region experienced a further increase in private investment in 1996, bringingthe region to its highest level in the current decade, well above the averages for the1970s and 1980s. This increase reflects in large part the performance of Turkey,which is the largest economy in the group. The simple average, which places lessweight on Turkey, actually declined in 1996 owing to sharp declines from alreadylow levels in Poland, Romania and Slovenia. The regional weighted average remainsnearly 2 percent below the global average. Within the region, Turkey had by far thehighest level of private investment, more than 8 percent above the second placeRomania.

Public investment also declined in 1996 in the region, bringing the average to itslowest level this decade. The regional average remains well above the globalaverage, however, being influenced by the high levels of public investment in Poland,Romania and Slovenia.

Sub-Saharan Africa

On average, private investment increased marginally in Sub-Saharan Africa in1996, putting the region at its highest level of private investment in this decade, butbelow the level of the 1970s and 1980s. Mauritius remains the country with thehighest level of private investment in the region, although that level has declinedsharply since 1990. Private investment has recovered in South Africa from its low in1993, but remains below the levels of the 1970s and 1980s. Malawi had the lowestlevels of private investment in the region, although it recovered sharply from the lowexperienced in 1994.

Public investment in Africa remained at roughly the same level as in 1993-95,which is less than half that of the 1970s. Especially notable is the sharp decline inpublic investment in South Africa, placing that country along with Cote d'Ivoireamong the countries with the lowest public investment in the region. Kenya now hasthe highest level of public investment in the region, up sharply from the average of1991-95 and above the level of the previous two decades.

6

2. Comparisons with Developed Country Levels of Investment

The level of private investment in developing countries has grown over 1970-96,with a notable increase over 1985-96. This section compares the level and trend ofprivate investment in developing countries to the levels observed in four of the largestdeveloped countries: Japan, Germany, the United Kingdom and the United States(henceforth G4).

Figure 7. Private Investment - G4 Countries

30

25

20 A ---- ---

|15

10

5

01980 1984 1988 1992 1996

- US -Japan - - - Gennany - - UK --C--Developing countries (weighted average)

Figure 7 presents private investment levels for each of the G4 countries over1980-96. Japan had the highest level of private investment for most of the sampleperiod, although the collapse of the bubble economy reduced investment in recentyears. Japan is followed by Germany, which has maintained a fairly constant level ofprivate investment over time. Both Japan and Germany had levels of investment thatexceeded our global average for developing countries. In contrast, private investmentlevels for both the UK and US were below our global developing country average inrecent years.

Figure 8 presents public investment levels for the G4 countries over 1980-96 andfor the (GDP-weighted) developing country average. With the exception of Japan,public investment in the G4 countries has been either flat or declining for the lastseveral years. Japan had the highest level of public investment over the entire sampleperiod, with the UK having the lowest levels since 1985. With the exception of Japan

7

for the period 1990-96, the developing country average exceeded the level of all G4countries for all years reported.

Figure 8. Public Investment - G4 Countries

10

9

87

p6

5

2 A

0

1980 1984 1988 1992 1996

-U-US -Japan -- A-A- Germany - -LTK -0--Developingecountries (weighted average)

8

3. Domestic Capital Markets as Sources of Private Investment

Private investment is financed from a variety of sources. Household investment isfinanced primarily by personal savings and bank (and nonbank) lending. Financingfor private corporate investment is more varied, coming from several differentsources, both internal and external to the firm. Retained earnings can represent animportant source of financing for profitable companies, but Singh (1995) reportsstatistics that suggest that extra-firm financing is an important source of capital aswell, as much in developing as in developed countries. External sources include banklending and the issuance of corporate debt obligations (henceforth bonds) and equity(henceforth stocks) in both domestic and international markets. A previous edition ofTrends - Glen and Sumlinski (1994) - examined the role of international capitalmarkets in financing private investment. This section complements that work byexamining the role of domestic capital markets as sources of finance for privatecorporate investment.

Table 1 presents aggregate statistics on private sector issuance activity incorporate bonds and stocks in three groups of countries: 23 emerging markets, the 4Asian Tigers and the G4 countries.a The statistics provide an aggregate picture of thelevel of activity in each of these groups of countries over the period 1980-95, andthree subperiods. The statistics are presented in US dollar terms, and as a percentageof GDP, in order to allow comparisons across regions and time. Net bank lending tothe private sector is included to provide a benchmark for the private capital markets.

Globally, corporate bonds were the larger of the two components, having grownfrom $1.3 trillion over 1980-85 to $6.2 trillion over 1990-95. Of that amount, thelargest part by -far was in the G4 countries, which accounted for 96 percent of the totalamount issued globally. In dollar amounts, the G4 were followed by the AsianTigers, which issued a total of $262 billion over the sample period, with the EmergingMarkets well behind with only $162 billion issued. The markets in all three groups ofcountries increased rapidly over time, with the Asian Tiger bond markets growing bynearly 900 percent between the first and third subperiods. In percentage terms, theEmerging Markets grew by an even larger 1300 percent, but from a much smallerbase.

Stock markets have not represented as important a source of capital as bondmarkets in any of the three sets of countries. The total amount raised in the stockmarkets, $1.9 trillion, is small in comparison to the amount raised in the corporatebond markets. It is notable, however, that the stock markets played a relatively moreimportant role in the Emerging Markets than did the bond markets, the only group of

a The economies in each category are: Emerging Markets -- Argentina; Brazil; Chile; China; Colombia;Hungary; India; Indonesia; Jordan; Malaysia; Mexico; Pakistan; Peru; Philippines; Portugal; Thailand;Tunisia; Turkey; and Venezuela; Asian Tigers -- Hong Kong, China; Republic of Korea; Singapore;and Taiwan, Chinaa; G4 -- Germany; Japan; the United Kingdom; and the United States.

9

countries in which that was true, and that stocks were more important than bonds as asource of private investment in each of the three subperiods.

While the absolute dollar amounts raised in Emerging Markets are much smallerthan in the G4, the economies involved are themselves also much smaller. To putthese amounts into perspective, the right-hand side of Table 1 presents the amountsraised relative to the countries' GDPs. Viewed in this way, the amounts raised inEmerging Markets are much more significant. Corporate bond markets supplied 0.8percent of GDP to issuers over 1991-95, up from only 0.1 percent over 1980-85.Despite that improvement, however, bonds still played only a very limited role infinancing private investment, representing only about 6 percent of total privateinvestment over 1991-95. In contrast, in the G4 countries bonds financed 51 percentof total private investment.

Relative to GDP, stock issuance has also been impressive in Emerging Markets,increasing from 0.3 percent of GDP over 1980-85 to 0.9 percent over 1991-95. Thatputs the Emerging Markets roughly on par with the G4 in terms of stock issuesrelative to GDP, but, like bonds, stock issues were not important sources of financing,representing only about 7 percent of total private investment over 1991-95. This was,however, slightly above the G4 level of 5 percent.

Although capital market activity has grown substantially over the period 1980-95,it remains much smaller than net bank lending to the private sector. As presented inthe lower third of Table 1, for all countries in the sample bank lending accounted for7.3 percent of GDP over 1980-95, more than 60 percent greater than total domesticcapital market financing. The disparity is even more pronounced in EmergingMarkets, where banks provided financing equivalent to 4 percent of GDP over 1980-95, compared to only 1 percent for the capital markets. In contrast, bank lending inthe G4 countries, at 7.3 percent of GDP, was slightly less than the 7.6 percent of GDPraised in the capital markets.

To summarize, capital markets activity, both stock and bond markets, have grownin importance globally over the period 1980-95. That growth has been notable in theemerging markets, where stock markets now raise as much financing as a percentageof GDP as in the G4 countries. But capital markets, especially bond markets, stillplayed only a limited role in financing private investment in emerging markets, andbanks remained a more important source of financing.

10

Table 1. Domestic Capital Market Issuance Activity

US$ billions Percentage of GDPa1980-85 1986-90 1991-95 1980-95 1980-85 1986-90 1991-95 1980-95

EquityEmerging Markets 25 64 127 216 0.3 0.7 0.9 0.6Asian Tigers 5 48 83 137 0.5 2.3 2.2 1.7G4 279 611 613 1,503 0.8 1.3 0.9 1.0Equity Total 309 723 824 1,855 0.5 1.4 1.3 1.1

BondsEmerging Markets 9 34 119 162 0.1 0.4 0.8 0.4Asian Tigers 20 63 179 262 1.9 3.0 4.7 3.2G4 1,308 3,525 5,911 10,744 3.8 7.4 8.7 6.6Bond Total 1,337 3,622 6,209 11,169 1.9 3.6 4.8 3.4

Total Capital Maikets 1,646 4,345 7,033 13,024 2.4 5.0 6.2 4.5

Bank LoarseEmerging Markets 235 348 800 1,382 2.6 3.8 5.7 4.0Asian Tigers 55 221 606 881 5.2 11.2 16.9 10.1G4 1,611 5,145 3,266 12,285 4.5 11.2 4.8 6.8BankTotal 1,901 5,713 4,671 14,548 4.1 8.7 9.1 7.3

Grand Total 3,547 10,058 11,704 27,572 6.5 13.7 15.3 11.8

Source: Various national sources.

a These averages are calculated using GDP weights for each year and then talkng the simple average across years.b Defined as the change in credit by deposit money bank credit to the private sector (If IFS line 22d).

References

Glen, Jack and M. Sumlinski. 1995. Trends in Private Investment in DevelopingCountries 1995, IFC Discussion Paper Number 25 Washington, D.C.

Singh, Ajit. 1995. Corporate Financial Patterns in Industrializing Countries, IFCTechnical Paper Number 2 Washington, D.C.

13

Appendix 1Methods and Sources

1. Fixed Investment Data

National accounts normally do not break down gross domestic investment into itsprivate and public sector components. Private investment is defined in this publication asthe difference between total gross domestic investment (from national accounts) andconsolidated public investment. Consolidated public investment data for each countrywere compiled mainly from World Bank Country Economic Memoranda, PublicInvestment Reviews, Public Expenditure Reviews, and other World Bank countryreports. They reflect efforts by World Bank missions to compile public sector data.Where World Bank data are not available, country data were used.

The countries included in this edition represent all the developing countries forwhich the relevant data are available. Minor changes were made in the last two or threeyears for most countries as a result of revisions in their national accounts data. Updatesare not available through 1996 for Indonesia and Republic of Korea.

TableA2. 1 in Appendix 2 presents investment figures for each country, includingtotal fixed investment (GDFI/GDP); private fixed investment (PRIVATE I/GDP); andpublic fixed investment (Public I/GDP). The ratios are computed using local currencyunits at current priLces, except for Bolivia. For this country, constant price ratios are usedin order to correct for the effect of past high inflation. Weighted averages are calculatedusing country GDPs (in U.S. dollars) for included countries in each year as weights.Weighted and simple averages for each region are shown in Table A2. 1.

15

Table A 2.1 Investment as a share of GDP (in %) Appendix 2

Region/Country 1990 1991 1992 1993 1994 1995 1996 7Average Average Average

EastAsiaIndonesia GDFIUGDP 284 28.1 27.3 25.9 27.8 28.8 25.4 27.7

PrivateIIGDP 19.2 18.5 17.7 16.1 18.1 19.3 15.7 18.2

Public /GDP 9.3 9.6 9.5 9.8 9.7 9.5 9.7 9.6

Republic of Korea GDFI/GDP 37.1 3.4 36.6 36.0 35.7 36.6 26.0 29.4 36.7

Private IIGDP 29.6 29.5 27.3 27.2 27.0 26.9 20.2 22.7 27.9

Publie GDP 7.4 9.0 9.3 8.8 8.7 9.8 5.9 6.7 8.8

Malaysia GDFUGDP 32.4 33.4 36.0 38.3 40.1 43.0 41.8 24.1 30.4 37.9

Private l/GDP 20.9 22.7 21.5 23.8 27.2 30.5 29.2 15.7 17.0 25.1

Public IGDP 11.5 10.7 14.5 14.6 13.0 12.6 12.6 8.4 13.4 12.8

Papua New Guinea GDFUIGDP 25.1 28.0 23.8 188 13.9 21.1 26.3 24.6 22.4

Private /GDP 20.0 23.3 18.6 12.5 11.1 17.7 22.5 18.4 17.9

Public I/GDP 5.1 4.7 5.2 6.3 2.8 3.4 3.7 6.2 4.5

Philippines GDFIUGDP 23.1 20.0 20.9 24.3 23.6 22.5 22.5 23.8 22.6 22.4

Private I/GDP 18.9 15.9 16.0 19.3 18.7 17.9 17.9 17.4 17.2 17.8

Public I/GDP 4.2 4.1 4.9 5.0 4.9 4.6 4.6 6.4 5.4 4.6

Thailand GDFIUGDP 40.2 41.6 39.4 40.2 40.9 42.9 42.4 24.7 28.6 41.1

Private I/GDP 34.1 34.4 31.2 32.3 32.6 34.1 32.9 17.8 21.2 33.1

Public I/GDP 6.1 7.2 8.1 7.9 8.2 8.8 9.5 7.0 7.4 8.0

Simple average GDFIUGDP 31.1 31.6 30.6 30.6 30.3 32.5 33.2 24.7 26.9 31.3

Private IIGDP 23.8 24.1 22.1 21.9 22.5 24.4 25.6 17.8 18.7 23.3

Public IIGDP 7.3 7.5 8.6 8.7 7.9 8.1 7.6 7.0 8.1 8.0

Weighted average GDFvGDP 34.3 35.1 33.9 33.9 34.3 35.5 37.6 24.7 27.7 34.9

Private IIGDP 26.6 26.6 24.6 24.9 25.4 26.2 28.4 18.0 19.5 26.1

Public IGDP 7.6 8.6 9.2 9.1 8.9 9.4 9.2 6.6 8.2 8.8

South AsiaBangladesh GDUGDP 12.8 11.5 12.1 14.3 15.4 16.6 17.0 8.7 13.6 13.8

Private /GDP 6.4 5.8 6.6 7.8 7.8 9.4 10.7 4.6 7.3 7.3

Public UGDP 6.4 5.7 5.5 6.4 7.6 7.2 6.3 4.1 6.3 6.5

India GDFI/GDP 23.2 22.1 22.5 21.6 22.4 24.3 24.0 17.3 20.6 22.7

Private /GDP 13.8 12.6 14.0 13.3 13.6 16.2 16.8 9.8 10.6 13.9

Public UIGDP 9.4 9.5 8.5 8.3 8.9 8.0 7.2 7.5 10.0 8.8

Paldstan GDFI/GDP 17.3 17.4 1S.6 19.1 17.9 16.9 17.0 15.0 16.9 18O

Private I/GDP 8.9 8.9 9.8 10.0 9.6 8.7 8.9 5.9 7.7 9.4

PublicU IGDP 8.4 8.5 8.8 9.1 8.3 8.2 8.1 9.1 9.3 8.5

Simple average GDFI/GDP 17.8 17.0 17.7 18.3 18.6 19.3 19.3 14.2 17.0 18.2

Private /GDP 9.7 9.1 10.1 10.4 10.3 11.4 12.1 7.0 8.5 10.2

Public IIGDP 8.0 7.9 7.6 7.9 8.3 7.8 7.2 7.2 8.5 8.0

Weighted average GDFIIGDP 21.9 20.8 21.3 20.7 21.4 22.8 22.6 16.5 19.8 21.6

Privatel/GDP 12.8 11.7 12.9 12.4 12.7 14.7 15.3 9.1 10.0 13.2

Public IGDP 9.1 9.1 8.3 8.3 8.7 8.0 7.2 7.5 9.7 8.4

Note: Complete time series for private and public investment reported in table A 2.1 are available from IFCs web site (http://ifc.org/DEPTS/OPS/ECON/ECONHOQMHTM.)

17 (cantlraed)

Table 2 (continued)

RegionfCountry ~~1990 1991 1992 1993 1994 1995 1996 Average Average AverageRegion/Country -1 ~ ~~~~~~~1970- 79 1980-89 1990-96

Europe, Middle East, and North AfricaEgypt GDFIGDP 27.0 22.3 19.1 16.3 16.9 16.8 16.6 31.9 19.3

Privwtel/GDP 12.9 9.2 9.4 9.2 10.7 11.1 9.S 12.7 10.3

Public LGDP 14.0 13.1 9.7 7.1 6.2 5.6 6.8 19.3 8.9

Iran GDFItGDP 15.5 21.6 22.0 22.0 21.5 17.3 20.5

Private I/GDP 8.3 13.2 13.0 11.4 13.1 9.6 11.8

Public LJGDP 7.1 8.5 9.0 10.6 8.4 7.8 8.7

Morocco GDFI/GDP 25.4 22.2 22.5 22.1 20.5 22.0 20.5 27.1 23.0 22.2

Privat J/GDP 16.4 13.6 13.2 9.5 9.5 12.4 11.5 12.4 12.1 12.3

PublicLJGDP 9.0 8.7 9.4 12.6 11.0 9.6 8.9 14.7 10.9 9.9

Poland GDFI/GDP 20.7 20.8 17.5 15.8 16.1 21.3 19.8 16.0 18.9

Private I/GDP 4.1 8.5 7.7 6.8 7.1 8.5 10.2 2.7 7.6

Pubtic J/GDP 16.6 12.3 9.8 9.1 9.0 12.8 9.5 13.3 11.3

Romania GDFI;GDP 14.2 14.7 14.1 16.1 21.8 21.8 17.1

Private JIDP 1.4 2.8 4.3 6.7 11.0 12.0 6.4

Public TAGDP 12.9 11.9 9.8 9.4 10.8 9.8 lO.S

Slovenia GDFI/GDP 17.6 1S.1 20.2 25.0 23.5 20.9

Privat LGDP 4.7 4.S 5.3 5.9 6.2 5.4

Publich/GDP 12.9 13.2 15.0 19.1 17.3 15.5

Tunisia GDF7/GDP 24.4 24.1 24.6 25.5 24.9 24.8 27.5 24.7

Private J/GDP 12.3 12.7 13.2 12.7 13.1 10.5 13.6 12.B

Public I/GDP 12.0 11.4 11.4 12.8 11.8 14.3 13.9 11.9

Turkey GDFTIGDP 22.9 23.7 23.0 25.5 24.5 23.7 25.3 22.3 21.8 24.1

Priate I/GDP 15.8 16.1 15.6 18.3 19.4 19.5 20.2 12.3 12.9 17.8

Publicl/GDP 7.0 7.6 7.4 7.3 5.0 4.2 5.2 10.0 8.9 6.2

Simple average GDFItGDP 22.6 21.3 20.1 19.9 20.1 21.7 21.3 24.3 23.8 20.9

Privatel/GDP 11.6 10.7 9.9 9.6 10.6 11.4 11.7 11.6 11.5 10.7

Public /GDP 11.0 10.6 10.2 10.3 9.5 10.3 9.6 12.7 12.3 10.2

Weighted average GDFIIGDP 21.7 21.9 21.0 21.2 20.3 21.9 21.8 22.8 22.1 23.4

Private IGDP 11.9 12.3 12.0 12.3 12.5 13.6 14.1 12.1 11.4 14.7

Public /GDP 9.8 9.6 9.0 S.9 7.8 8.3 7.7 10.7 10.7 8.7

18 conuamud

Table 2 (continued)

Region/Courtr 1990 1991 1992 1993 1994 1995 1996 Average Average Average~~~~_________________L_____ 1970- 79 1980-89 1990-96

Latin America and the CaribbeanArgentina GDIIGDP 14.0 14.6 16.7 18.2 19.9 18.3 18.5 22.7 19.9 17.2

Private IGDP 9.4 12.4 14.8 16.0 17.5 15.5 15.9 13.6 15.0 14.5

Pu6blic BGDP 4.6 2.2 1.9 2.3 2.4 2.8 2.6 9.1 4.9 2.7

Belize GDFUIGDP 25.6 29.5 29.3 29.9 24.0 20.6 19.4 26.7 21.9 25.3

PrinvatlGDP 11.4 8.1 10.0 16.3 13.0 12.8 12.9 15.1 12.0 12.1

PubflIkGDP 14.2 20.4 19.3 13.5 11.1 7.8 6.5 11.7 9.8 13.3

Bolivia GDFIDGDP 1) 12.6 14.5 16.3 16.3 14.8 15.4 16.9 12.3 15.2

Private 1/GDP 5.0 5.8 6.6 7.4 6.4 7.1 8.9 4.5 6.7

Public BGDP 7.6 8.7 9.7 8.9 8.4 8.2 8.0 7.8 8.5

Brazil GDFIIGDP 2) 22.9 19.6 19.6 20.4 20.7 20.5 19.1 21.6 22.2 20.4

Private 1/GDP 17.6 14.4 13.9 15.5 15.8 16.8 15.3 14.6 16.0 15.6

Public 1/GDP 5.3 5.2 5.7 4.9 4.9 3.7 3.9 7.0 6.2 4.8

Chile GDFIDGDP 23.3 20.9 22.7 25.6 24.3 23.2 24.5 14.9 17.1 23.5

Prfvat, 1/GDP 18.5 16.0 17.0 19.7 19.1 18.2 19.6 7.0 12.1 18.3

PubliclSGDP 4.8 4.9 5.7 5.8 5.1 5.0 4.9 7.9 5.0 5.2

Colombia GDFI/GDP 16.6 14.6 15.6 18.8 21.6 20.8 18.0 16.0 17.6 18.0

Private YGDP 10.2 8.4 8.3 10.8 13.2 12.1 8.6 10.3 9.7 10.2

Public IIGDP 6.4 6.2 7.2 8.0 8.4 8.7 9.4 5.7 7.9 7.8

Costa Rica GDFlfGDP 22.4 19.7 20.8 23.3 19.8 19.3 18.2 22.1 20.3 20.5

PrIvle /GDP 17.7 15.5 16.6 18.4 15.0 14.2 13.6 15.4 14.0 15.8

PublIc I/GDP 4.7 4.2 4.1 4.9 4.9 5.1 4.5 6.7 6.4 4.6

Dominican GDFDGDP

Republic 24.9 21.6 22.2 22.9 22.5 23.4 24.1 21.6 22.7 23.1

Private IIGDP 18.2 16.1 16.8 14.7 13.2 15.6 16.1 15.1 16.0 15.8

Public GDP 6.7 5.6 5.4 8.2 9.4 7.8 8.1 6.4 6.7 7.3

Ecuador GDFIfGDP 18.4 19.7 19.5 19.9 18.8 18.6 21.1 20.0 19.1

Private /fGP 11.8 13.2 12.1 12.1 12.6 12.4 12.9 11.3 12.4

Public I/GDP 6.7 6.5 7.4 7.8 6.2 6.2 8.2 8.7 6.8

El Salvador GDFI/GDP 13.7 15.2 17.2 17.9 18.7 18.7 19.1 16.6 12.8 17.2

Private JIGDP 11.2 12.3 13.2 13.9 15.0 15.3 15.2 11.5 8.3 13.7

PublIcl/GDP 2.5 2.8 4.0 4.0 3.7 3.4 3.9 5.1 4.4 3.5

Guatemala GDDIGDP 13.0 12.2 15.6 16.2 14.2 14.7 13.6 16.1 12.9 14.2

Private I/GDP 10.3 10.0 12.6 13.4 11.7 12.4 11.2 11.9 8.9 11.7

Public I/GDP 2.7 2.2 3.0 2.7 2.5 2.3 2.4 4.3 4.0 2.6

Mexico GDFIIGDP 18.4 19.2 20.5 20.0 20.3 17.2 17.4 20.3 20.4 19.0

Pnivate 1GOP 13.6 14.7 16.3 15.9 16.1 14.0 14.0 12.7 12.9 14.9

Public l/GDP 4.8 4.5 4.1 4.1 4.2 3.2 3.4 7.6 7.5 4.1

Panama GDFW7DP 8.5 15.0 15.5 23.2 23.6 26.0 25.6 11.5 19.6

Privte 1/GDP 7.4 12.0 15.1 19.8 20.8 21.8 21.4 9.0 16.9

Public 1/GDP 1.1 3.0 0.4 3.4 2.9 4.3 4.1 2.5 2.7

Paraguay GDFI/GDP 22.0 22.0 19.8 18.6 18.9 22.4 21.7 19.6 23.4 20.8

Priate 1/GDP 16.3 19.5 17.2 15.9 15.9 18.3 18.1 14.3 17.3 17.3

Public JIGDP 5.7 2.5 2.6 2.7 3.0 4.1 3.6 5.4 6.1 3.4

Peru GDF1/GDP 14.7 14.5 15.2 16.8 21.0 23.5 22.9 21.5 18.4

Pmvte /GDP 12.2 11.7 12.0 13.4 17.1 19.4 19.1 15.2 15.0

Public 1/GDP 2.5 2.7 3.1 3.4 3.9 4.1 3.8 6.3 3.4

Uruguay GDF/GDP 10.8 11.9 12.5 13.8 12.8 11.7 11.8 12.9 12.6 12.2

Privte 1/GDP 7.7 7.8 9.0 9.5 8.3 8.1 8.4 8.3 8.0 8.4

Public I/GDP 3.1 4.1 3.4 4.3 4.5 3.6 3.4 4.6 4.7 3.8

Venezuela GDFD1GDP 14.1 18.2 21.1 19.3 16.0 14.5 14.8 19.1 16.8

Privale IGDP 4.9 7.6 8.9 8.5 7.1 5.0 4.7 10.7 6.7

Public I/GDP 9.2 10.6 12.2 10.8 8.8 9.4 10.1 8.4 10.2

Simple average GDFI/GDP 17.4 17.8 18.8 20.1 19.5 19.3 19.1 19.3 18.7 18.9

Privte WIGDP 12.0 12.1 13.0 14.2 14.0 14.1 13.9 12.5 12.3 13.3

Public1GP 5.5 5.7 5.8 5.9 5.5 5.3 5.2 6.8 6.4 5.5

Weighted average GDFDGDP 19.4 18.1 19.1 19.7 20.3 19.4 18.8 20.5 20.7 19.3

Private GDP 14.2 13.4 14.3 15.2 15.7 15.3 14.7 13.1 14.2 14.7

Public 1GDP 5.2 4.7 4.8 4.6 4.6 4.1 4.2 7.4 6.5 4.6

19 contineued

Table 2 (continued)

Region/Country 1990 1991 1992 1993 1994 1995 1996 Average Average AverageRegion/Country ~~~~~~~~~~~~~1970 - 79 1980 -89 1990 -96

Sub - Saharan AfricaBerin GDIUGDP 13.4 13.5 13.3 15.0 15.5 17.3 16.6 14.9

Pnvatel/GDP 6.0 6.1 6.7 7.9 6.2 6.9 9.1 7.0PublicIGDP 7.4 7.4 6.6 7.1 9.3 10.4 7.5 8.0

Central African GDFI/GDP

Rep. 12.1 12.6 13.0 13.6 10.1 12.4 13.9 8.0 12.5

Private l/GDP 5.6 5.7 5.0 6.0 3.7 6.1 6.8 3.7 5.6Public IIGDP 6.5 6.9 8.0 7.6 6.4 6.3 7.0 4.3 7.0

C8te d'lvoire GDFI/GDP 10.3 9.1 8.6 7.9 11.1 12.9 13.9 13.7 10.5P,ivatel/GDP 4.9 5.1 4.4 4.0 7.0 8.6 9.6 6.8 6.2

Public LIGDP 5.3 4.0 4.3 3.8 4.1 4.3 4.3 6.9 4.3Kenya GDFUGDP 20.6 19.0 16.6 16.9 18.2 18.7 17.9 21.5 19.9 18.3

Priwve I/GDP 10.9 10.5 9.2 9.6 9.5 13.1 8.0 12.7 11.6 10.1

Public l/GDP 9.7 8.5 7.3 7.3 8.7 5.7 9.9 8.8 8.3 8.2Malawi GDFIUGDP 16.1 16.9 16.1 10.0 11.1 13.1 13.5 23.7 15.0 13.8

PrivaJe /GDP 8.4 8.8 6.7 2.6 1.8 3.3 6.1 8.7 5.4 5.4Public /GDP .7.8 8.1 9.4 7.4 9.3 9.8 7.4 15.1 9.6 8.4

Mauritania GDFItGDP 20.0 17.9 20.5 23.5 14.4 18.1 22.1 19.5

Private IGDP 9.2 7.9 6.8 10.4 4.8 9.6 15.1 9.1Public IIGDP 10.7 10.0 13.7 13.1 9.6 8.5 7.0 10.4

Mauritius GDFIUGDP 31.2 28.9 27.8 28.4 30.7 24.5 24.5 27.5 21.4 28.0

Private I/GDP 19.7 20.7 18.2 20.6 21.6 16.4 15.9 18.8 14.0 19.0Public /GDP 11.5 8.2 9.6 7.9 9.0 8.1 8.6 8.7 7.5 9.0

Narnibia GDFIUGDP 20.1 15.6 20.2 21.8 21.0 21.4 20.9 16.9 20.2

Private l/GDP 12.4 8.3 10.4 13.6 12.7 14.0 13.0 7.2 12.1Public 1GDP 7.8 7.4 9.8 8.2 8.3 7.4 7.9 9.7 8.1

South Africa GDFIUGDP 19.6 17.8 16.6 15.5 16.0 16.9 17.0 26.9 23.5 17.1Private lGDP 12.9 11.9 11.4 10.8 11.7 12.6 12.7 13.9 13.7 12.0Public fGDP 6.8 5.9 5.2 4.7 4.3 4.3 4.4 13.0 9.8 5.1

Togo GDFIUGDP 25.3 18.1 16.1 11.2 11.5 13.5 13.1 19.4 15.5

Private /GDP 11.7 7.8 9.8 7.7 8.4 7.9 8.2 7.3 8.8Public IIGDP 13.6 10.3 6.3 3.5 3.1 5.6 5.0 12.1 6.8

Sirmple average GDFIUGDP 18.9 16.9 16.9 16.4 16.0 16.9 17.3 24.5 18.3 17.0

Private 1/GDP 10.2 9.3 8.9 9.3 8.7 9.9 10.4 12.9 9.5 9.5Public/GDP 8.7 7.7 8.0 7.1 7.2 7.0 6.9 11.5 8.8 7.5

Weighted average GDFIUGDP 18.9 17.2 16.3 15.2 16.1 16.8 17.0 26.8 22.9 16.8Private 1IGDP 12.1 11.2 10.8 10.3 11.4 12.2 12.3 13.8 13.2 11.5Public LIGDP 6.9 6.0 5.5 4.9 4.7 4.6 4.7 12.9 9.8 5.3

Global GFI/GDP 20.5 20.0 20.2 20.5 20.2 21.0 20.4 20.4 20.6 20.4

Simple Averages Private I/GDP 13.0 12.7 12.5 13.0 13.1 14.0 13.7 12.5 12.5 13.2PubEsc/GDP 7.5 7.4 7.6 7.5 7.1 7.0 6.7 7.9 8.1 7.3

Global GFI/GDP 23.3 22.9 22.9 23.3 23.8 24.4 21.9 20.7 22.2 23.2

WeightedAverages Private I/GDP 16.2 15.9 16.0 16.5 17.2 17.8 16.2 12.8 14.0 16.6Public /GDP 7.1 7.0 7.0 6.8 6.6 6.5 5.7 7.9 8.2 6.7

Note: Unless otherwise noted the sources are: national authorities & World Bank/IMF staff eatitates.

Data for 1996 are prelintinaryyestirnates.1) Curent price series from revised National Accottts2) Source 1990-1996: FIBGE e Centro de Estudos de Economia e Govermo/IBREtFGV, previous years World Bank.Brazil -private investment includes investment by enterprises controled by state and local muncipalitiesIndonesia -privatetpublic delneation not available due to revision in the national accountsRepubEc of Korea -public investment = capital expenditure of consoEdated nonfinancial publc sectorMorocco - public investment are estimnated by investment of 14 bigBest public companiesSouth Afnica - Source: Quarterly Bullefin of South African Reserve Bank

20

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IFC Discussion Papers (continued)

No. 21 Radical Reform in the Automotive Industry: Policies in Emerging Markets. Peter O'Brienand Yannis Karmokolias

No. 22 Debt or Equity? How Firms in Developing Countries Choose. Jack Glen and Brian Pinto

No. 23 Financing Private Infrastructure Projects: Emerging Trends from IFC's Experience. Gary Bondand Lau:rence Carter

No. 24 An Introduction to the Microstructure of Emerging Markets. Jack Glen

No. 25 Trends in Private Investment in Developing Countries 1995: Statistics for 1980-93. Jack D. Glenand Mariusz A. Sumlinski

No. 26 Dividend Policy and Behavior in Emerging Markets: To Pay or Not to Pay. Jack D. Glen,Yannis Karmokolias, Robert R. Miller, and Sanjay Shah

No. 27 Intellectual Property Protection, Direct Investment, and Technology Transfer: Germany, Japan,and the Vnited States. Edwin Mansfield

No. 28 Trends in Private Investment in Developing Countries: Statistics for 1970-94. Frederick Z.Jaspersen, Anthony H. Aylward, and Mariusz A. Sumlinski

No. 29 InternationalJoint Ventures in Developing Countries: Happy Marriages? Robert R. Miller,Jack D. Glen, Frederick Z. Jaspersen, and Yannis Karmokolias

No. 30 Cost Benefit Analysis of Private Sector Environmental Investments: A Case Study of the Kunda CementFactory. Yannis Karmokolias

No. 31 Trends in Private Investment in Developing Countries: Statistics for 1970-1995. Lawrence Bouton andMariusz A. Sumlinski

No. 32 The Business of Education: A Look at Kenya's Private Education Sector.Yannis Karmokolias andJacob van Lutsenburg Maas

No. 33 How Businesses See Government: Responses from Private Sector Surveys in 69 Countries.Aymo Brunetti, Gregory Kisunko, and Beatrice Weder

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