Barriers and Opportunities for Enhancing Capital Flows
In the COMCEC Member Countries
2
-- Flows by banks – which appear in a single category in the IIF dataset as ‘“Commercial
Banks”’ – are split into two categories in the IMF dataset: ‘“Portfolio Debt”’ for banks’ bond
purchases and ‘“Other Debt Instruments”’ for bank loans.
-- The IMF dataset has a statistical break from 2005-08, resulting from methodological
changes implemented in 2012.
-- The IIF and IMF also differ in their treatment of countries. For example, South Korea is
included in the IIF’s sample of emerging markets but not part of the IMF’s.
The focus of this study is on capital inflows, which are typically split into the following types:
Private inflows
 Foreign direct investment (FDI) – usually undertaken with the intention of making a
greenfield investment, or new investment in a physical company-related structure
where no previous facilities existed
 Portfolio equity – purchasing stocks in an enterprise, with no degree of managerial
control
 Bond issuance – flows from non-bank sources into bond markets (bonds issued by
companies or governments)
 Cross-border bank lending – lending from commercial banks, usually including bond
purchases by commercial banks
Official inflows
 International financial institutional lending – loans from organisations such as the IMF,
World Bank or regional development banks. These are often extended on concessional
terms either through interest rates below those available on the market or by long
grace periods, or a combination of these
 Bilateral lending – financing from bilateral creditors e.g. government-to-government
loans
GROUPS
The 57 Member States of the Organisation of Islamic Cooperation have been analysed in this
study according to particular groupings. The main grouping used is that applied by the World
Bank, which divides countries into four income groups – the low-income group, lower-middle
income group, upper-middle income group and high-income group – based on gross national
income (GNI) per capita.
For the purposes of this study, the Member States were analysed according to their World
Bank income grouping for the following sections of the study:
 Trends and current state of play with respect to capital flows
 Barriers to and opportunities for enhancing capital flows
 Conclusions and options for enhancing capital flows