Proparco’s Jean-Baptiste Sabatié on rethinking emerging market risk
For years, private capital has stayed on the sidelines of frontier markets, citing a high-risk environment. But Proparco Deputy CEO Jean-Baptiste Sabatié says the data tells a different story. Speaking with Raj Kumar during the IDB annual meetings in Asunción, Paraguay, Sabatié highlighted new evidence from the Global Emerging Markets Risk Database, or GEMS, showing that the probability of default is often lower — and recovery rates stronger — than the market expects. “The risk is not about defining the correct pricing,” Sabatié notes. “It’s defining what you actually will lose.” As the “private sector pivot” takes center stage in development finance, bridging the gap between perceived risk and financial reality is the trillion-dollar challenge. Watch the clip to hear why Sabatié believes DFIs must be bolder in challenging these market assumptions.
