Financial flows and the developing countries 1 (4)

t. , N S C*4 0 | | 1 1 i 6LU > W.~~~~~~~J a~~~~~~~~~~a CY) C,)  ! _ 4N D S LJ MNI A R Y INTER NATIONAL LENDING Venezuela a lower rating. Derivatives market AND CAPITAL MARKETS participants are focusing increasingly on counterparty credit risk information. UI D EVE LOP I NG-C OUNT RY BORROWING PAGE 4 Developing countries raised $19.8 billion in EQUITY PORTFOLIO AND bonds and loans in the first quarter of 1994, FOREIGN DIRECT INVESTMENT down about a fifth on the previous quarter. In the second quarter bond issues declined E EMERGING STOCK MARKETS PAGE 10 to a six-quarter low of $8.6 billion, pulled The IFC's dollar-based composite index rose down by cyclical and secular global factors. 0.8%. Comovement between emerging and With rising interest rates and market volatil- industrial stock market prices is increasing. ity, investors favored floating-rate notes, shorter maturities, and smaller issues. India returned to the international bond market N NEW EQUITIES, QUASI-EQUITIES, with a eurobond issue by the IDBI; the first AND DERIVATIVES PAGE 12 Dragon bond by an Indonesian corporation, In the second quarter international equity Kalbe Farma, was issued (in July). issues by developing countries tumbled on weak global market conditions and low par- ticipation by US investors. An offering by * GLOBAL BORROWING PAGE 7 Anglovaal marked South Africa's return to According to the OECD, $216.1 billion was the international equity markets. A continu- raised in international capital markets in the ing stream of new funds are seeking unlisted first quarter of 1994, most of it prior to the stocks with high potential returns. February 4 raising of the Federal Funds (short-term) rate by the US Federal Reserve. Bond issues were 8% higher than in the pre- * FOREIGN DIRECT INVESTMENT vious quarter. Large refinancings and merg- AND PRIVATIZATION PAGE 15 ers and acquisitions supported new Developing countries are relying more on for- syndicated lending. eign direct investment to finance infrastruc- ture, says the World Bank's recently published World Development Report 1994. Russia begins E COMMERCIAL BANK CLAIMS PAGE 8 its second phase of privatization, and some Cross-border claims of BIS reporting banks other countries report progress on public (including local foreign currency lending) divestment programs. rose by $175.2 billion in the fourth quarter of 1993. Claims on developing countries were also higher, led by lending to high-credit SECONDARY MARKETS Asian countries. The share of project finance FOR DEVELOPING - in bank lending is rising, and banks are COUNTRY DEBT PAGE 17 assuming a larger role in infrastructure financing. Weakness in bond markets worldwide con- tributed to a further decline in secondary market debt prices in the second quarter, but * MARKET CREDITWORTHINESS PAGE 9 market volatility fell back after reaching a In the second quarter Moody's upgraded the record high in April. Secondary market Czech Republic. Moody's and S&P both returns on developing-country new issues downgraded Turkey, and Moody's also gave were also down. 2 FINANCiAL FLOWS AND THE DEVELOPING COUNTR!ES  : . . -; _, A .. .,-r OFFICIAL FLOWS: expected to be higher. Japanese banks write C/>- MULTILATERAL AND off more bad loans as they experience a fifth B I LATERAL year of declining profitability. 7 m MULTILATERAL FLOWS PAGE 18 World Bank loan commitments for the year FINANCIAL BRIEF: ending June 30, 1994, were lower as private THE HOWS, WHYS, AND capital flows to developing countries WHERES OF PRIVATE expanded. CAPITAL INFLOWS PAGE 21 (9d The recent wave of private capital flows to 4 BILATERAL ODA AND EXPORT developing countries is differentiated by the CREDITS PAGE 18 uses to which the flows are put in recipient ODA was sharply down at $54.8 billion in countries and the composition of these flows. 1993, reversing a generally upward trend. At 0.29%, DAC members' average share of GNP devoted to aid slipped to the lowest level STATISTICAL APPENDIX S*C since 1973. In fiscal 1993Japan's Ex-Im Bank ak commitments were lower at Y1,251 billion. BANK AND TRADE-RELATED NONBANK CLAIMS PAGE 24 A41 2 4 DFEBT RELIEF UPDATE : COMMERCIAL BANK CLAIMS ON DEVELOPING COUNTRIES PAGE 25 0 OFFICIAL CREDITORS PAGE 19 In the second quarter Paris Club creditors COMMERCIAL BANK CLAIMS rescheduled debt of Congo, Ecuador, and ON DEVELOPING COUNTRIES, Jordan on Houston terms, and debt of the BY COUNTRY OF ORIGIN PAGE 26 Central African Republic on enhanced Toronto terms. They also rescheduled debt MATURITIES OF BANK CLAIMS of Algeria, Bulgaria, Gabon, and Russia. In ON DEVELOPING COUNTRIES PAGE 30 July the Philippines and Sierra Leone also rescheduled debt with the Paris Club. FUNDS RAISED ON INTER- NATIONAL CAPITAL MARKETS PAGE 31 D COMMERCIAL CREDITORS PAGE 20 SECONDARY MARKET DEBT Commercial bank creditors selected options PRICES PAGE 32 for debt restructuring under Brady-style debt agreements for Bulgaria. In May Ecuador 3; EMERGING STOCK MARKETS PAGE 33 reached an agreement on "heads of terms" to restructure its commercial bank debt. t COUNTRY GROUPS PAGE 34 COMMERCIAL BANK The tables on external debt, aggregate long-term PROVISIONING AND resource flows, and net foreign direct investment, CAP ITAL ADEQUACY PAGE 20 included in previous issues, will be published only as data are updated, usually once a year in First-quarter results of US banks show lower February. profits, but second-quarter earnings are AUGIS- 1 99- 3  iN FERNATIONAL LENN C AND CAPITAL MARKETS DEVELOPING-COUNTRY TABLE 2 BORROWING BOND ISSUES BY TYPE OF BORROWER * IN THE FIRST QUARTER DEVELOPING US$ millions COUNTRIES RAISE JUST UNDER $20 BILLION 1992 1993 Qi Q2 IN MEDIUM- AND LONG-TERM DEBT Alldevelopingcountries 21,244 55,762 14,756 8,598 According to the OECD, developing coun- Private 9,771 20,192 6,202 2,995 According to the OECD, developing coun- ~~~Sub-Sanaran Africa 73 0 0 0 tries raised $19.8 billion on international East Asia and Pacific 2,121 4,503 2,858 2111 bond and loan markets in the first quarter of South Asia 0 556 239 140 Europe and Central Asia 65 290 100 I 9 1994, down about a fifth on the previous Latin America and Caribbean 7,512 14,843 3,005 725 quarter but a third higher than a year ago. Middle East and North Africa 0 0 0 0 Lower bond volumes accounted for all of the Sovereign 5,761 19,904 3,495 2,677 Sub-Saharan Africa 315 0 0 0 decline. Even so, bond issues continued to EastAsia and Pacific 300 907 1,190 0 outpace bank credit, totaling almost three- South Asia 0 0 0 0 Europe ard Central As a 4,446 15, I I5 1,605 2357 quarters of funds borrowed (table 1). For Latin America and Caribbean 700 3,882 700 320 Asian countries, which raised more than $10 Middle East and North Africa 0 0 0 0 billion, the share of bond financing was little Other public 5,712 15,666 5,060 2,926 SUa-Saharan Africa 336 0 0 0 more than half. All of the $6.1 billion raised East Asia ann Pacific 2,818 8,156 1,854 1 ,776 by Latin American countries was bonds. South Asia 0 0 200 100 Europe and Central Asia 123 894 29 250 Borrowing by Easterni Europe and Central Latin America and Car bbean 2,435 6,616 2,700 800 Asia was $233 million, mostly bonds. Middle Eastand North Africa 0 0 278 0 Source: Euromoney Bondware. X IN THE SECOND QUARTER BOND ISSUES BY DEVELOPING COUNTRIES CONTINUE TO anticipation of higher interest rates in the SLIDE United States and other major industrial In the second quarter a combination of cycli- countries prompted investors to shift out of cal and secular trends depressed bond issues bonds, pulling prices down. Because of a by developing countries. Inflation fears and strengthening yen,Japanese investors moved out of foreign investments to avoid capital TABLE I losses. These factors, along with continuing INTERNATIONAL BORROWING BY SELECTED DEVELOPING large public deficits in industrial countries COUNTRIES and a turnaround in OECD economic activ- US$ millions 1992 1993 1993Q4 1994Q1 ity at a time of falling savings ratios, raised Totol Bonds Total Bonds Total Bonds Total Bonds concerns that demand for capital would out- Argentina 1,529.2 1,529.2 6,473.2 6,097.2 3,440.1 3,440.1 1,410,0 1,410.0 strip supply. Brazil 3,010.0 2,830.0 6,449.4 6,120.4 2,155.4 2,155.4 1,170,9 1,170.9 In thesecondquarterdeveloping-country Chile 350.0 0 774.6 432.6 100.0 100.0 0 0 China 4,043.2 1,273.2 6,756.0 2,956.8 1,082.1 770.8 2,548.7 1,500.0 bond volume fell to a six-quarter low of $8.6 Czech Repubiic 39.5 1 5.5 902.6 702.6 0 0 0 0 billion (a decline of about 40% over the pre- Hungary I,446.1 1,234.8 5,070.7 4,808.5 2,041. 1,860.0 232.8 57.8 India 200.6 0 475.0 445.0 320.0 320.0 509.0 439.0 vious quarter). Following a fall of 27% in the Indonesia 2,641.2 611.0 3,726.0 1,725.9 1,691.4 1,195.9 1,354.2 159.0 firstquarter,privateborrowingcontractedby Korea, Rep. of 5,204.0 3,181.6 7,718.8 5,646.2 3,480.6 2,924.5 1,655.4 1,273.5 Malaysia 1,270.6 0 1 ,61 1 1 0 292.0 0 800.9 330.0 nearly half in the second quarter (table 2). Mexico 3,373.6 2,923.4 9,751.5 9,351.4 2,710.9 2,710.9 3,085.0 3,085.0 Sovereign borrowers issued a quarter less, Pakistan C 0 92.3 92.3 92.3 92.3 0 0 Poland 8.7 0 0 0 0 3 0 0 and public sector borrowing was also lower Thailand 2,718.3 646.1 5,550.4 2,166.5 1,766.7 1,005.6 2,636.5 1,681.0 by about 40%. Korea led Asian borrowers Turkey 4,579.9 2,777.1 5,762.7 3,858.8 2,1 68.9 1,644.5 842.3 7 1 9.8 with billion, followed China Venezuela 1,035.4 830.4 2,931.3 2,142.9 187.2 187.2 0 0 $1 by (almost Zimbabwe 115.0 0 90.0 0 90.0 0 0 0 $750 million) and Indonesia ($625 million). Note: Bonds include both nternational issues (euromarkets) and traditional foreign isscies. At $900 million, Argentina topped the Latin a. Data before April 1 993 refer to Czechoslovakia. Source: OECD, Financial Statistics (monthly), April 1 994. American bond league table. Mexican issuers 4 FINANCIAL FLOWS AND THE DEVELOPING COUNTRIES  IN ERNA-T KONAL '_ENDtNG AND CAPITAL MARKETS raised $825 million, much less than the first issues were under $250 million (and the aver- quarter's $3.5 billion. age size was $150 million). An exception was a $500 million offering out of Indonesia: U IN UNCERTAIN MARKETS INVESTORS SHIFT Indah Kiat's $500 million issue had a five- INTO FRNs; SHORTER MATURITIES AND year, $150 million noncallable tranche, an SMALLER ISSUES GAIN FAVOR eight-year, $200 million noncallable tranche, With rising interest rates and market volatil- and a 12-year, $150 million tranche callable ity in the second quarter of 1994, investors after seven years. The end of the quarter also preferred floating-rate notes. The share of saw a DM 2.5 billion global floating-rate note FRNs, which are less price-sensitive than by the Republic of Portugal. fixed-rate bonds to interest rate movements, more than doubled from the preceding l EMERGING-MARKET BORROWERS SEEK TO quarter, to 43%; FRNs represented less than DIVERSIFY FUNDING SOURCES; INDIA 10% of all bond issues in 1993 (figure 1). RETURNS TO THE BOND MARKET Depressed demand for bonds, including Developing-country borrowers financed most those by developing-country issuers, widened of their bond issues in dollars, but patterns average borrowing spreads, signaling higher costs for borrowers. Secondary market FIGURE 1 spreads also widened sharply. Benchmark BOND ISSUES FROM DEVELOPING issues, such as China's global, were trading at COUNTRIES, BY TYPE US$ billions about 150 basis points in May, widening from 55.8 85 at launch; Mexico's Banco Nacional de * Floating-rate Exterior's global, which had widened to 350 _EC Convertible basis points in April, saw spreads of about 300 _ Fixed-rate basis points in May, compared with 163 basis points at launch. Investors also responded to uncertain _ markets by shifting portfolios toward short- dated assets. Maturities on developing-coun- _ 6 try issues, which continued to lengthen in 1993 and averaged seven years in the fourth 1993 1994Q1 I994Q2 quarter of last year, have seen a declining S5vcn Eromey Rodaare a,d Wold Bank. trend this year: nearly 70% of issues in the second quarter were of one to five years' FIGURE 2 maturity (figure 2). Market activity suggests BOND ISSUES FROM DEVELOPING that investors in Asia and Europe have a COUNTRIES, BY MATURITY US$ billions demand for only short-dated (mostly three- 55.8 * Over 15 years year) issues and that only US investors will F _ I -IS years absorb five-year and longer maturities, El 6-10 years though reluctantly. A recent five-year, $150 I1-5 years million issue by Argentina's Sodigas saw spreads wideii 25 basis points to 400 basis points on trading, a reflection of weak mar- ket conditions for long-dated paper. 14.8 With investors cautious, smaller issues are 8.6 favored. While the first quarter saw two large _ global issues of $1 billion each by China and 1993 1994Q I 1994Q2 by Mexico's Bancomext, most second-quarter Sonrce Euromney Bondware and World Bank. AUGUST 1994 5  FIGURE3 across regions varied (figure 3). Asian issuers marked the first 10-year non-investment- CURRENCY raised a large proportion of their borrowings grade emerging-market offering since COMPOSITION OF BOND ISSUES, (26%) in the yen sector, and developing January. Mexico's Grupo Durango tapped 1994Q2 Europe and Central Asia relied heavily on the Yankee market in July, the first borrow- Asia ($4.1 billion) the deutsche mark sector. Latin American ing by a Latin American issuer since borrowers also were active in the deutsche February, with a seven-year, $150 million Swfr 2%o DM 4% mark sector, led by a three-year, DM 500 mil- offering priced to yield a spread of 498 basis Y ,en 26% lion issue by the Republic of Argentina. points. Investors continue to be cautious, In the second quarter emerging-market however, and the seven-year, $125 million US dollars 67% issuers returned to the guilder market after Yankee by Polysindo (an Indonesian com- an absence of five years, with a five-year, 150 pany) was reportedly scaled back from a Latin America ($1.8 billion) million guilder issue by the Republic of planned 10-year, $200 million offering. DM 20% Hungary. The issue, launched at 235 basis points over guilder government bonds, saw IN JAPANESE INVESTMENT IN EMERGING spreads widen on trading because of weak MARKETS RISES US dollars 80% demand in the five-year range. The City of A country breakdown of the destination of Prague offered a debut five-year, $250 mil- Japanese portfolio flows is not available lion euro issue in April. Elsewhere, Indo- except for major OECD countries. But Asia ($2.6 billion) nesian corporations are increasingly looking broadly defined measures (based on an Others 8% to raise funds through bond and equity aggregate "other countries" category that DM82% USddollars l0% offerings, rather than relying on bank credit. covers all developing countries) suggest a In July Kalbe Farma issued the first Dragon recent turnaround in Japanese institutional bond by an Indonesian corporation. The investment in emerging-market securities- five-year, $100 million floating-rate issue was from a net -$1.8 billion in 1992 to a net $3.6 unrated, but attracted strong investor inter- billion in 1993. Most emerging-market Source: Eurononey Bondwareand Wodd est. As Latin American borrowers continue investments byJapanese investors have con- Bank to diversify funding sources, Argentina is centrated on first-tier Asian equity instru- also planning to debut in the Dragon mar- ments. Japanese investors have also been kct-as is Colombia. South Africa is looking investing in Samurai bonds issued by devel- to reenter international bond markets. oping countries, with retail investors pur- The second quarter also saw the return of chasing most of these bonds (52% in 1993). Indian borrowers to the international bond market after an absence of four years, with a 1 SECURED DEALS ATTRACT INVESTORS five-year, $100 million FRN (priced at 100 The quarter saw several privately placed basis points over the three-month LIBOR) issues secured by developing-country securi- issued by the Industrial Development Bank ties. Among these was a novel deal that of India. allowed Multiva Mexico Trust to borrow in dollars but pay interest in pesos. Principal on U THE YANKEE MARKET FOR EMERGING the $125 million dual currency bond is ISSUES SHOWS SIGNS OF REVIVAL secured by a put agreement with Mexico's After a few months of quiet, investors are Nacional Financiera, the state development returning to the Yankee market in emerging bank. A Mexican airline company, Aero- issues. In late May the Philippine Long mexico, raised $50 million through an issue Distance Telephone Company (PLDT), securitized by US-dollar-denominated ticket which is rated BB-, issued a 10-year, $250 mil- receivables. In July the National Commercial lion globally registered note at a spread of Bank of Jamaica raised $60 million through 350 basis points over US Treasuries; 80% of an issue that is securitized by credit card the issue went to US investors. PLDT's issue receivables. 6 FINANCIAL FLOWS AND THE DEVELOPING COUNTRIES  $.S3.g-F:rA:S.T '4 \7: (r_ i .'iTAL SA XFIVETFS Z INTERNATIONAL INVESTORS CAUTIOUS FIGURE4 IN LOCAL CURRENCY BOND MARKETS US DOLLAR RETURNS IN SELECTED LOCAL MARKETS, 1993-94 IN DEVELOPING COUNTRIES Annuci percentage yield 40 Foreign investor participation in domestic 9--d- y Mex-c- n Cetes ^~~~~~~~~ ./9-day Mexican Cetes I fixed-income markets was reportedly low in 20 / ... the second quarter. Investors were appar- ently concerned by falling returns in dollar ".......***'*'*****.... terms on local-currency-denominated instru- ments and problems in hedging currency 3-month US Argentne Bonex89 -20 Treasury bill rate risk in many developing countries, as well as --. ---- ------------ ------------- ----------- ------ - --------1- --- uncertainty in global markets (figure 4). -40: In July Korea partially opened the domes-tt tic bond market to foreign investors. As a 9 I 9 91-day YenezuelanZCII result, foreigners can now invest directly (up --60 - - - - - to 30%) in convertible issues of small and medium-size companies that are listed on the -80 - - - - | Korean stock exchange. /993 99m4 1993 1 994 Source Vestcorp Partners, GLOBAL BORROWING ors were reluctant to invest in lower-rated, illiquid assets. The quarter saw big issues by X INTERNATIONAL CAPITAL ACTIVITY OECD banks and financial institutions, espe- CONTINUES TO RISE IN THE FIRST QUARTER cially in FRNs (as these matched floating-rate OF 1994 assets with similarly structured liabilities). According to the OECD, $216.1 billion was Central and regional government bond raised on world capital markets in the first issues rose in January, as funding programs quarter of 1994, up slightly on the fourth were pushed up to benefit from low rates. quarter of 1993 but down a little on a year ago Borrowings by supranationals were lower, as (table 3). Gross bond issues rose by 8% over these institutions postponed issuances rather the previous quarter, to $127.6 billion. The than issue FRNs. bulk of first-quarter bond issues were in A downward trend in yields on instru- January, prior to the US Federal Reserve's ments denominated in European currencies, raising of the Federal Funds (short-term) __ _ _ rate on February 4; issues contracted appre- TABLE 3 INTERNATIONAL CAPITAL MARKET ciably thereafter. Because of interest rate FLOWS uncertainty, there was a significant shift US$ billions toward floating-rate issues; fixed-rate bonds Instrument 1990 1991 1992 1993 1994QI accounted for about 72% of all bond issues, Bonds 229.9 308.7 333.7 481.0 127.6 compard wit 81 %in theprevius qurter. Equity 7.3 23.4 23.5 40.7 11.2 compared with 81% in the previousquarter Syndicated loans 124.5 116.0 79 136.7 22.5 Medium-term note programs were sharply NIF' and other higher in the first quarter, but eurocommer- back-up fac ties 7.0 7.7 6.7 8.2 0.2 ECP5 and other non- cial paper facilities, despite rising short rates, underwrittenfacilites 66.2 80.2 127.9 152.0 54.6 were lower. Total 434.9 536.0 609.7 818.6 216.1 Inflation concerns and expectations of Flows to developing higher demand for capital (stemming from a countriesc (percent) 7.6 9.1 8.0 11.2 1 1 Od revival of economic activity in OECD coun- a. Nte ssuance facil ties. a. Euracammerc al paper. tries) made investors increasingly sensitive to c. Including Eastern European countries. d. Estimate. issuers liquidity and credit quality-invest- Source. OECD, Financial Market Trends. AUGUST 1994 7  INT ERNATIONAL LENDING ANtD C:APITAL MARKETS in the midst of rising US rates, boosted the which spurted by $55 billion. A slowdown in share of the European currency sector US refinancing constrained the expansion of (although the DM sector share shrunk) to new syndicated credit facilities, which were 45%, compared with 40% in the previous only slightly higher at $55 billion. quarter. The US dollar remained the most Japanese banks' international claims (not popular currency of issue, with a market adjusted for exchange rate changes) fell by share of 42%. 2% on an unwinding of their short-term interbank positions. A pickup in new lend- U REFINANCINGS AND MERGERS AND ing, as well as higher cross-border lending in ACQUISITIONS FUEL NEW SYNDICATED the interbank market in Europe, expanded LENDING cross-border claims of German and US In the first quarter of 1994 gross new syndi- banks. cated loans were $22.5 billion, the same as in the previous quarter. The share of syndicated U BIS BANKS' EXPOSURE IN DEVELOPING loans in total financing was virtually COUNTRIES SHARPLY HIGHER IN THE unchanged at about 10%. Large refinanc- FOURTH QUARTER OF 1993 ings, especially by US corporations, and a BIS banks' outstanding claims (adjusted for pickup in mergers and acquisitions were exchange rate changes) on non-OPEC devel- behind the corporate demand for credit: cor- oping countries, OPEC countries, and porations accounted for more than four- Eastern Europe and the former Soviet Union fifths of borrowing. Asian borrowers, too, were up $14.5 billion in the fourth quarter, were active. following a $5.1 billion decline in the previ- Although bank competition for top-tier ous quarter. Claims on non-OPEC develop- borrowers has grown, the average spreads on ing countries rose by $13.6 billion, compared international bank loans have widened. with a $1.6 billion increase in the third quar- According to the OECD, these spreads were ter. BIS banks' claims on OPEC countries 86 basis points in the first five months of the also rose (by $2.9 billion), reversing the year, compared with 81 for all of 1993. OECD decline of the previous two quarters. By con- borrowers saw spreads climbing to 84 basis trast, claims on Eastern Europe and the for- points in the first five months of 1994 from mer Soviet Union fell a further $2 billion, 82 basis points in the same period last year, following a $1.4 billion decline in the third while developing-country borrowers' spreads quarter. fell 8 basis points to 98 basis points. At five Most of the new lending remained con- years and eight months, average maturities centrated in the major developing countries were shorter than a year ago. of Asia, even though individual countries dis- played uneven credit activity between quar- ters. Claims on China, one of the biggest COMMERCIAL BANK CLAIMS developing-country borrowers, shot up by $5.6 billion, following a small increase in the U BIS BANKS' CROSS-BORDER CLAIMS third quarter. Malaysia continued to draw on CONTINUE TO CLIMB bank loans, and BIS banks' claims rose by $2 Cross-border and local foreign currency billion. Credits to Thailand slowed, however, claims of BIS reporting banks rose by $175.2 and claims rose by $705 million, compared billion in the fourth quarter of 1993 and by with a $2.2 billion rise in the third quarter. $261.3 billion for the year. Although banks Claims on the Philippines were also higher- continued to be selective, there were signs of by $460 million. a rebound in net international bank credit The sharp increase in claims (up $3.7 bil- (or new lending) adjusted for redeposits, lion) on Latin American countries most 8 FINANCIAL FLOWS AND THE DEVELOPING COUNTRIES  INT'ERNATIONAL LENDING AND CAPITAL MARKETS likely reflected trade credits, since private assume a bigger role in the $200 billion spent FIGURE 6 foreign bond and equity flows predominate each year on infrastructure in developing INFRASTRUCTURE FINANCING UNDER over medium-term bank loans. Argentina countries. PROJECT FINANCING, saw claims rise by $1.4 billion, and Mexico by Project financing tends to be concen- 1993 $1 billion. In a reversal of the recent trend, trated in a handful of middle-income coun- East Asia claims on OPEC countries were also higher tries, with China the low-income exception. on a pickup in lending activity in some coun- East Asia accounts for more than two-thirds Nonnfro structure 46% tries. After falling for five quarters, claims on of project finance committed for infrastruc- African countries rose by $333 million. But ture, developing Europe and Central Asia / claims on Eastern Europe and the former almost 20%, and Latin America about 10%. Soviet Union contracted further, led by a $2 Telecommunications dominates project Latin America billion decline in claims on the former Soviet finance commitments for infrastructure Union (partly due to a repayment of short- among East Asian borrowers, followed by