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Managing Capital Flows: Lessons from Emerging Markets for Frontier Economies

High-level conference

Mauritius, March 2, 2015

Private capital flows to Frontier Markets (FMs) have increased substantially over the last decade, and are projected to rise further in the coming years. While still dwarfed in absolute size compared to flows to Emerging Markets (EMs), in relation to the economic size of the recipient country, flows to FMs are now often on par with those to EMs. In general, such flows, and capital mobility more broadly, provide much needed financing for productive investments, contribute to financial market development, and are largely welcome in FMs, but they also entail macroeconomic and financial-stability risks—which are amplified by the magnitude and volatility of flows. As FMs continue to attract flows, develop their financial markets, and rise to join the ranks of EMs, what are the challenges they confront? And can they learn from the experience of EMs to effectively manage the risks associated with large capital flows?

This high-level conference will provide a forum for policy makers from frontier and emerging markets to share their experiences in managing capital flows, learn from each other, and together with academics and market participants, engage in discussions about policy options for mitigating the risks associated with capital flows, while reaping the benefits of financial integration.

Participation to the conference is by invitation only. For further information, please contact:

Conference Photos

See the photo album for this conference on Flickr.

Monday, March 2


Registration and Coffee


Welcome and Opening Remarks

Seetanah Lutchmeenaraidoo, Minister of Finance and Economic Development, Mauritius
David Lipton, First Deputy Managing Director, IMF - Managing Capital Flows: Lessons from Emerging Markets for Frontier Economies


Keynote Speech

Dani Rodrik, Professor, Institute for Advanced Study





Session I—Trends, Dynamics, and Challenges of Capital Flows to Frontier Markets

This session will discuss the recent trends and behavior of capital flows to frontier markets, and the challenges posed by such flows. What are the factors driving capital flows to frontier markets—is the rise in private flows a structural phenomenon that defines a “new normal” or is it largely driven by lax monetary policy conditions in advanced countries, inducing investors to take on riskier bets? What are the main types of flows to frontier markets? Do they pose any risks and challenges? Are frontier markets likely to experience as much capital flow volatility as emerging markets? How does experience differ according to country characteristics?


Ramesh Basant Roi, Governor, Central Bank of Mauritius


Allah Malik Kazemi, Advisor to Governor; Former Deputy Governor, Central Bank of Bangladesh
Louis Kasekende, Deputy Governor, Bank of Uganda
Henry Rotich, Cabinet Secretary, The National Treasury, Kenya

Daniel Zelikow, Managing Director, Global Head, Public Sector Group, JP Morgan




Session II—Policy Responses to Capital Inflows

This session will discuss the policy tools deployed by frontier and emerging markets to manage the challenges posed by capital inflows: macroeconomic policies; macroprudential policy; and capital controls. How effective are the various tools? What can be said about the policy hierarchy among these various tools? Should countries intervene in foreign exchange markets to mitigate exchange rate volatility associated with capital flow volatility?


Jonathan D. Ostry, Deputy Director, Research Department, IMF


José De Gregorio, Professor, Universidad de Chile; Former Governor, Central Bank of Chile
Olivier Jeanne, Professor, Johns Hopkins University
Millison Narh, Deputy Governor, Bank of Ghana




Panel Discussion—Managing Capital Flows in Frontier and Emerging Markets: What are the Lessons?


Richard Davies, Economics Editor, The Economist


Okwu Joseph Nnanna, Deputy Governor, Central Bank of Nigeria
Subir Gokarn, Director Research, Brookings India; Former Deputy Governor, Reserve Bank of India
Tukiya Kankasa-Mabula, Deputy Governor, Bank of Zambia
Brian Kahn, Advisor to Governor, Reserve Bank of South Africa


Concluding Remarks

Antoinette Sayeh, Director, African Department, IMF


Reception and Dinner (by invitation only)