the corresponding challenges has an inverse relationship with the level of development. allow me to provide some additional information in this regard : • the international monetary fund estimates that the median food share in total spending in advanced economies is 17 percent, compared to 31 percent in emerging and developing countries. 4 in addition, it is important to keep in mind that in a number of these countries, or in specific sectors of the population, the corresponding figure is much higher. 5 oecd - fao agricultural outlook 2013. shaun k. roache, “ what explains the rise in food price volatiliy? ”, imf working paper, wp / 10 / 129, may 2010. s. k. roache, op. cit. international monetary fund, world economic outlook, september 2011. k. anderson, m. ivanovic and w. martin, “ food price spikes, price insulation and poverty ”, policy research working paper, wps6535, the world bank, july 2013. bis central bankers ’ speeches • in this context, it is not surprising that, according to world bank calculations, the rise in food prices in 2010 – 2011 resulted in a net increase of 44 million in the number of people living in extreme poverty in developing nations. 6 • additionally, some recent studies conclude that increases in international food prices may give rise to a significant deterioration of democratic institutions, and to a higher number of internal conflicts, in poorer countries. 7 this underlines the importance of clearly understanding the factors that affect both the level and the volatility of food prices, as well as the challenges that public policy must confront in this respect. clearly, fluctuations in food prices are largely determined by supply and demand factors inherent to these markets, such as the pace of world economic activity, demographic changes, the implications of higher income levels in some countries for eating habits, climate related factors, and the availability of water and arable land, among others. however, the analysis becomes more complicated given that there are events outside the strict sphere of food markets which are affecting food price developments. it is worth to highlight in this regard that developments in energy markets affect food prices through a more intense use of energy in the production, processing, storage, and transportation of these commodities, as well as through the more widespread production of biofuels and the resulting rise in the use of food and agricultural inputs for this purpose. second, a growing interconnection is being observed between financial and food markets, as reflected

manuel sanchez : emerging markets amid heightened uncertainty remarks by mr manuel sanchez, deputy governor of the bank of mexico, at the credit agricole central bank seminar, rome, 23 october 2014. * * * i am honored to join you here today in the magnificent city of rome, a cradle of western civilization, one of europe ’ s great cultural centers, and a muse for poets and artists throughout the centuries. thank you for the invitation to share a few words with you on the topic of emerging markets. emerging economies now confront a new reality, one in which some apparent certainties have disappeared, and different challenges have arisen. i would like to touch on three subjects in this context, starting with the performance of emerging economies, moving on to financial market conditions, and concluding with a brief overview of mexico in particular. as always, my views are entirely my own and do not necessarily reflect those of the bank of mexico or its governing board. developments and the outlook for emerging economies two distinctive trends characterize developments in emerging economies during the last few years. the first is higher growth since the beginning of this century, relative to the previous decade. economic expansion has surpassed that of developed nations substantially, with china and india playing prominent roles. what forces have driven this phenomenon? although emerging economies are not all alike, as a group they seem to have benefited from generally sound policies implemented in the 1980s and 1990s. these include the strengthening of macroeconomic and financial frameworks and the liberalization of markets, reduced regulations, and greater openness to international trade. additionally, high and rising commodity prices and ample access to external credit during the 2000s have helped. by and large, better policy and institutional settings seem to be responsible for the fact that emerging economies were relatively resilient to the shocks of the great recession. indeed, in 2009, while the advanced economies contracted more than 3 percent, the emerging economies grew slightly above 1 percent. 1 nonetheless, since 2011, growth in emerging economies has been declining, the second notable trend for the group as a whole. although still above that of advanced nations, average output change in the last four years has been less than that observed prior to the crisis in this century. several factors may contribute toward an explanation of the slowdown. one possibility is structural. some emerging economies such as china may be reaching the production frontier derived from their reforms. they cannot grow at constant extraordinarily high rates indefinitely. another possibility, which could be complementary to the first, is that