How did developing countries fare during the crisis and what are their medium term prospects? These questions are at least partly answered in a new book covering 10 countries. Titled 'The Great Recession and the Developing Countries: Economic Impact and Growth Prospects
,’ the book analyzes the growth before, during and after the crisis of Brazil, China, Ethiopia, India, Malaysia, Mexico, Philippines, Poland, Turkey, and Vietnam.
The book’s editor, Mustapha Nabli, estimates that the average potential growth rate for the ten countries before the financial crisis was about 6 percent. Unlike the overheated financial sector, pre-crisis trade and remittance levels were sustainable.
Once the crisis hit, however, less diversified countries really felt the heat. Their financial sectors eventually recovered, but trade remained low, thus adversely affecting their growth. 13.6 percent of Turkey’s 2009 GDP, for example, was shaved off during the financial crisis. Possibly this was due in part to fears left over from past financial crises.