The Impact of the Financial Crisis on Developing Countries: Evidence from Sudan
Abstract
The financial Crisis that built up in financial markets in the developed world three years back has spread in a variety of ways into developing countries. While the global crisis has taken a little longer to reach developing and low-income countries, those countries are in the front line when it comes to suffering its bitter effects. This paper aims to appraise in a critically manner the impact of the global financial crisis on the Sudanese economy and the responses undertaken by the national authorities to mitigate its impact.
The paper reviews and discusses the three mechanisms that play a key role in transmitting the crisis from developed to developing countries; trade, capital flows and remittances. The research identifies global trade as the main channel of transmission of the crisis to Sudan. Foreign Direct Investment (FDI) and workers’ remittance appear to be resilient to the financial chaos, while the Official Development Assistance flows (ODA) to the country undergo minor declines since the blast of the crisis.
The analysis reveals that the Sudanese economy has been hard hit by the financial turmoil; the GDP growth rate reveals a steep declining trend, the depreciation in the exchange rate for the Sudanese pound is high, the acceleration in the inflation rate is noticeable and the fiscal and current account deficits worsen.
The responses to the negative impacts of the crisis are slow and seem to lie in taking monetary and fiscal measures aiming at sustaining economic growth and maintaining monetary and financial stability. The paper suggests a number of recommendations to enhance the measures adopted and introduces new ones.
References
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(43) www.tradingeconomics.com/sudan/indicators/
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(45) www.sudantribune.com/Sudan says financial crisis fallout will impact oil revenue.
(1) Ali, S., (2009), “Impact of the Financial Crisis on Africa”, International
Economic Bulletin, available at http://carnegieendowment.org/2009/04/15/impact -of-financial-crisis-on- africa/4hfb.
(2) Arab Monetary Fund database, (2005-2010).
(3) Arieff, A., Weiss, M. A. and Jones, V. C., (2010), “The Global Economic Crisis: Impact on Sub-Saharan Africa and Global Policy Responses”, Congressional Research Service, available at http://fpc.state.gov/documents/ organization/14159 .pdf.
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(5) Boorman, J., (2009), “The Impact of the Financial Crisis on Emerging Market Economies: The Transmission Mechanism, Policy Response and Lessons”, Global
Meeting of the Emerging Markets Forum, Mumbai, India, June 23, 2009.
(6) D'Aloisio, T., (2009), “Regulatory Response to the Financial Crisis”, Asia
Securities Forum, Sydney, October 2009.
(7) Economic Commission for Africa, (2009), “ The Global Financial Crisis: impact, responses and way forward”, Twenty-eighth meeting of the Committee of Experts, Cairo, Egypt, June 2009.
(8) Global Economic Prospects, (2010), “Regional appendix: Middle East and North Africa, Available at http://siteresources.worldbank.org/INTGEP2010/ Resources/GEP2010
Summer2010- MENAAnnex.pdf.
(9) Good hurt, C. A. E., (2008), “The Regulatory Response to the Financial Crisis”, CESIFO Conference on Financial Market Regulation in Europe, Working Paper NO. 2257, January, 2008.
(10) Green, D., King, R., and Dawkins, M., M., (2010), “The Global Economic Crisis and Developing Countries, Impact and Response”, Oxfam GB, and Oxfam Australia, May, 2010.
(11) Heuty, A., ( 2009), “Five Recommendations for Managing Natural Resource Revenue in Times of Crisis”, Revenue Watch Institute, February, 2009.
(12) Horhota L., and Matei, N. (2009), “Impact of Financial Crisis on Developing Countries”, Faculty of Commerce, Finance and Banks, `` Romanian America University.
(13) IMF, World Economic Outlook Database (2010).
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(16) IMF Staff (2009), “The Implications of the Global Financial Crisis for Low- Income Countries”
(17) IMF (2009), “Sudan Staff-Monitored program for 2009-2010” Country Report No. 09/218.
(18) IMF International Financial statistics,(2008).International Trade Statistics, 2010
(19) Jones, S., G., and Ocampo, J., A., (2009), “The Financial Crisis and its
Impact on Developing Countries, United Nations Development Program, Working Paper No. 53, April, 2009.
(20) Kahn,D., S., (2009), “The Impact of the Financial Crisis on Low-Income Countries”, International Monetary Fund at Brookings Institution, Washington, D.C.
(21) Khartoum Stock Exchange Annual Reports (2005-2009).
(22) Loser, C., M., (2009), “Global financial Turmoil and Emerging Market Economies: Major contagion and a shocking loss of wealth?, Global Journal of Emerging Market Economies, Vol. 1(2), pp. 137.–158.
(23) Massa. I., and Brambila, J., M., (2010), “The Global Financial Crisis and Sub-Saharan Africa: The Effects of Slowing Private Capital Inflows on
Growth", Overseas Development Institute, Working Paper No. 304, June 2009.
(24) Mohapatra, S., and Ratha, D., (2010), “The Impact of the Global Financial
Crisis on Migration and Remittances”, World Bank, Economic Premise, 2 010, issue 2.
(25) Ratha, D., Mohapatra, S. and Xul, Z., (2008), “Outlook for Remittance Flows 2008‐2010”, Migration and Development Brief 8, The World Bank Washington D.C.
(26) Sudanese Economy in Figures, (2008).
(27) Te Velde, D., W., (2009), “The Global Financial Crisis and Developing Countries: Taking stock, Taking action”, Overseas Development Institute, ODI Briefing, Paper 54.
(28) The State of the Nation’s Housing (2008), Joint Center for housing Studies of Harvard University, Harvard Kennedy School.
(29) The World Bank Global Economic Prospect ,( 2010), “International Trade
Statistics”.
(30) The World Bank, “World Trade Indicators (2010), Country Trade Briefs
2009/2010, Sudan Trade Brief”.
(31) United Nations World Economic Situation and Prospects, (2009, 2010)
(32) World Trade 2009, Prospects for 2010, WTO reports.
(33) www.oecd.org/dac/stats/regioncharts
(34) www.africaneconomicoutlook.org
(35) www.federalreserve.gov/releases/h15/data.htm, Federal Reserve Statistical Release, Selected Interest Rates.
(36) www.msnbc.com/how severe is subprime mess?
(37) www.nationalreview.com/articles, fixing mortgages/john-mastrobattista/
(38) www.ssd.com/usandglobalregulatoryresponsestothefinancialcrisis/
(39) www2 standardpoors.com/HomePriceRelease112555, S&P/Case-Shiller Home Price Indices
(40) www.tradingeconomics.com/sudan/indicators/
(41) www.sudantribune.com/Sudan downplays impact of world financial crisis on local economy.
(42) www.sudantribune.com/Sudan says financial crisis fallout will impact oil revenue.
(43) www.Wikipedia.org/wiki/File:Leverage Ratio.png, “Leverage ratios for major investment banks”.
(44) www.world bank.org./prospects/migration and remittances.
(45) Yifu, J., L., (2008), “The Impact of the Financial Crisis on Developing Countries”, The World Bank, Korea Development Institute. , Seoul, October, 2008.
(2) Ahmed, M. M., (2010), “Global Financial Crisis Discussion Series: Sudan Phase 2”, Overseas Development Institute, Paper No.19.
(3) Ali, S., (2009), “Impact of the Financial Crisis on Africa”, International
Economic Bulletin, available at http://carnegieendowment.org/2009/04/15/impact -of-financial-crisis-on- africa/4hfb.
(4) Arab Monetary Fund database, (2005-2010).
(5) Arieff, A., Weiss, M. A. and Jones, V. C., (2010), “The Global
Economic Crisis: Impact on Sub-Saharan Africa and Global Policy Responses”, Congressional Research Service, available at ://fpc.state.gov/documents/ organization/14159 .pdf.
(6) Bank of Sudan Annual Reports, (2005-2010).
(7) Boorman, J., (2009), “The Impact of the Financial Crisis on Emerging Market Economies: The Transmission Mechanism, Policy Response and Lessons”, Global
Meeting of the Emerging Markets Forum, Mumbai, India, June 23, 2009.
(8) D'Aloisio, T., (2009), “Regulatory Response to the Financial Crisis”,
Asia Securities Forum, Sydney, October 2009.
(9) Economic Commission for Africa, (2009), “The Global Financial Crisis: impact, responses and way forward", Twenty-eighth meeting of the Committee of Experts, Cairo, Egypt, June 2009.
(10) Global Economic Prospects, (2010), “Regional appendix: Middle East and North Africa,
Available at http://siteresources.worldbank.org/INTGEP2010/ Resources/GEP2010 Summer2010- MENAAnnex.pdf.
(11) Good hurt, C. A. E., (2008), “The Regulatory Response to the Financial Crisis”, CESIFO Conference on Financial Market Regulation in Europe, Working Paper NO. 2257, January, 2008.
(12) Green, D., King, R., and Dawkins, M., M., (2010), “The Global Economic Crisis and
Developing Countries, Impact and Response”, Oxfam GB, and Oxfam Australia, May, 2010.
(13) Heuty, A., ( 2009), “Five Recommendations for Managing Natural Resource Revenue in Times of Crisis”, Revenue Watch Institute, February, 2009.
(14) Horhota L., and Matei, N. (2009), “Impact of Financial Crisis on Developing Countries”, Faculty of Commerce, Finance and Banks, Romanian America University.
(15) IMF, World Economic Outlook Database (2010).
(16) IMF Annual Meetings, (2010), Sudan Statement, Press Release No. 33.
(17) IMF data base (2010).
(18) IMF Staff (2009), “The Implications of the Global Financial Crisis for Low- Income Countries”
(19) IMF (2009), “Sudan Staff-Monitored program for 2009-2010” Country Report No. 09/218.
(20) IMF International Financial statistics,( 2008).
(21) International Trade Statistics, 2010
(22) Jones, S., G., and Ocampo, J., A., (2009), “The Financial Crisis and its
Impact on Developing Countries, United Nations Development Program, Working Paper No. 53, April, 2009.
(23) Kahn,D., S., (2009), “The Impact of the Financial Crisis on Low-Income Countries "International Monetary Fund at Brookings Institution, Washington, D.C.
(24) Khartoum Stock Exchange Annual Reports (2005-2009).
(25) Loser, C., M., (2009), “Global financial Turmoil and Emerging Market Economies: Major contagion and a shocking loss of wealth?, Global Journal of Emerging Market Economies, Vol. 1(2), pp. 137.–158.
(26) Massa. I., and Brambila, J., M., (2010), “The Global Financial Crisis and Sub-Sahara Africa: The Effects of Slowing Private Capital Inflows on
Growth", Overseas Development Institute, Working Paper No. 304, June2009.
(27) Mohapatra, S., and Ratha, D., (2010), “The Impact of the Global Financial
Crisis on Migration and Remittances”, World Bank, Economic Premise, 2010, issue 2.
(28) Ratha, D., Mohapatra, S. and Xul, Z., (2008), “Outlook for Remittance Flows 2008‐2010”, Migration and Development Brief 8, The World Bank Washington D.C.
(29) Te Velde, D., W., (2009)," The Global Financial Crisis and Development Countries: Taking stock, Taking action", Overseas Development Institute, ODI Briefing. Paper 45.
(30) The State of the Nation’s Housing (2008), Joint Center for housing Studies of Harvard University, Harvard Kennedy School
(31) The World Bank Global Economic Prospect ,( 2010), “International Trade
Statistics”.
(32) The World Bank, Sudanese Economy in Figures, (2008).
(33) The World Bank, “World Trade Indicators (2010), Country Trade Briefs
2009/2010, Sudan Trade Brief”.
(34) United Nations World Economic Situation and Prospects, (2009, 2010)
(35) World Trade 2009, Prospects for 2010, WTO reports.
(36) www.oecd.org/dac/stats/regioncharts
(37) www.africaneconomicoutlook.org
(38) www.federalreserve.gov/releases/h15/data.htm, Federal Reserve Statistical Release, Selected Interest Rates.
(39) www.msnbc.com/how severe is subprime mess?
(40) www.nationalreview.com/articles, fixing mortgages/john-mastrobattista/
(41) www.ssd.com/usandglobalregulatoryresponsestothefinancialcrisis/
(42) www2 standardpoors.com/HomePriceRelease112555, S&P/Case-Shiller Home Price Indices
(43) www.tradingeconomics.com/sudan/indicators/
(44) www.sudantribune.com/Sudan downplays impact of world financial crisis on local economy.
(45) www.sudantribune.com/Sudan says financial crisis fallout will impact oil revenue.
(1) Ali, S., (2009), “Impact of the Financial Crisis on Africa”, International
Economic Bulletin, available at http://carnegieendowment.org/2009/04/15/impact -of-financial-crisis-on- africa/4hfb.
(2) Arab Monetary Fund database, (2005-2010).
(3) Arieff, A., Weiss, M. A. and Jones, V. C., (2010), “The Global Economic Crisis: Impact on Sub-Saharan Africa and Global Policy Responses”, Congressional Research Service, available at http://fpc.state.gov/documents/ organization/14159 .pdf.
(4) Bank of Sudan Annual Reports, (2005-2010).
(5) Boorman, J., (2009), “The Impact of the Financial Crisis on Emerging Market Economies: The Transmission Mechanism, Policy Response and Lessons”, Global
Meeting of the Emerging Markets Forum, Mumbai, India, June 23, 2009.
(6) D'Aloisio, T., (2009), “Regulatory Response to the Financial Crisis”, Asia
Securities Forum, Sydney, October 2009.
(7) Economic Commission for Africa, (2009), “ The Global Financial Crisis: impact, responses and way forward”, Twenty-eighth meeting of the Committee of Experts, Cairo, Egypt, June 2009.
(8) Global Economic Prospects, (2010), “Regional appendix: Middle East and North Africa, Available at http://siteresources.worldbank.org/INTGEP2010/ Resources/GEP2010
Summer2010- MENAAnnex.pdf.
(9) Good hurt, C. A. E., (2008), “The Regulatory Response to the Financial Crisis”, CESIFO Conference on Financial Market Regulation in Europe, Working Paper NO. 2257, January, 2008.
(10) Green, D., King, R., and Dawkins, M., M., (2010), “The Global Economic Crisis and Developing Countries, Impact and Response”, Oxfam GB, and Oxfam Australia, May, 2010.
(11) Heuty, A., ( 2009), “Five Recommendations for Managing Natural Resource Revenue in Times of Crisis”, Revenue Watch Institute, February, 2009.
(12) Horhota L., and Matei, N. (2009), “Impact of Financial Crisis on Developing Countries”, Faculty of Commerce, Finance and Banks, `` Romanian America University.
(13) IMF, World Economic Outlook Database (2010).
(14) IMF Annual Meetings, (2010), Sudan Statement, Press Release No. 33.
(15) IMF data base (2010).
(16) IMF Staff (2009), “The Implications of the Global Financial Crisis for Low- Income Countries”
(17) IMF (2009), “Sudan Staff-Monitored program for 2009-2010” Country Report No. 09/218.
(18) IMF International Financial statistics,(2008).International Trade Statistics, 2010
(19) Jones, S., G., and Ocampo, J., A., (2009), “The Financial Crisis and its
Impact on Developing Countries, United Nations Development Program, Working Paper No. 53, April, 2009.
(20) Kahn,D., S., (2009), “The Impact of the Financial Crisis on Low-Income Countries”, International Monetary Fund at Brookings Institution, Washington, D.C.
(21) Khartoum Stock Exchange Annual Reports (2005-2009).
(22) Loser, C., M., (2009), “Global financial Turmoil and Emerging Market Economies: Major contagion and a shocking loss of wealth?, Global Journal of Emerging Market Economies, Vol. 1(2), pp. 137.–158.
(23) Massa. I., and Brambila, J., M., (2010), “The Global Financial Crisis and Sub-Saharan Africa: The Effects of Slowing Private Capital Inflows on
Growth", Overseas Development Institute, Working Paper No. 304, June 2009.
(24) Mohapatra, S., and Ratha, D., (2010), “The Impact of the Global Financial
Crisis on Migration and Remittances”, World Bank, Economic Premise, 2 010, issue 2.
(25) Ratha, D., Mohapatra, S. and Xul, Z., (2008), “Outlook for Remittance Flows 2008‐2010”, Migration and Development Brief 8, The World Bank Washington D.C.
(26) Sudanese Economy in Figures, (2008).
(27) Te Velde, D., W., (2009), “The Global Financial Crisis and Developing Countries: Taking stock, Taking action”, Overseas Development Institute, ODI Briefing, Paper 54.
(28) The State of the Nation’s Housing (2008), Joint Center for housing Studies of Harvard University, Harvard Kennedy School.
(29) The World Bank Global Economic Prospect ,( 2010), “International Trade
Statistics”.
(30) The World Bank, “World Trade Indicators (2010), Country Trade Briefs
2009/2010, Sudan Trade Brief”.
(31) United Nations World Economic Situation and Prospects, (2009, 2010)
(32) World Trade 2009, Prospects for 2010, WTO reports.
(33) www.oecd.org/dac/stats/regioncharts
(34) www.africaneconomicoutlook.org
(35) www.federalreserve.gov/releases/h15/data.htm, Federal Reserve Statistical Release, Selected Interest Rates.
(36) www.msnbc.com/how severe is subprime mess?
(37) www.nationalreview.com/articles, fixing mortgages/john-mastrobattista/
(38) www.ssd.com/usandglobalregulatoryresponsestothefinancialcrisis/
(39) www2 standardpoors.com/HomePriceRelease112555, S&P/Case-Shiller Home Price Indices
(40) www.tradingeconomics.com/sudan/indicators/
(41) www.sudantribune.com/Sudan downplays impact of world financial crisis on local economy.
(42) www.sudantribune.com/Sudan says financial crisis fallout will impact oil revenue.
(43) www.Wikipedia.org/wiki/File:Leverage Ratio.png, “Leverage ratios for major investment banks”.
(44) www.world bank.org./prospects/migration and remittances.
(45) Yifu, J., L., (2008), “The Impact of the Financial Crisis on Developing Countries”, The World Bank, Korea Development Institute. , Seoul, October, 2008.
Published
2011-01-01
How to Cite
ABBAS, Nawal H..
The Impact of the Financial Crisis on Developing Countries: Evidence from Sudan.
Gezira Journal of Economic and Social Sciences, [S.l.], v. 2, n. 2, jan. 2011.
ISSN 1858-6023. Available at: <http://37.60.236.48/index.php/gjess/article/view/754>. Date accessed: 03 june 2026.
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Section
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