UN Newservice
August 8, 2000
Participants at a United Nations Asian regional conference on financing for development have agreed that sound domestic macroeconomic management and transparent governance must be complemented by similar transparency in the operations of global financial market operators such as hedge funds and investment banks.
This observation was one of the key outcomes of a High-Level Regional Consultative Meeting on Financing for Development, held from 2-5 August in Jakarta, Indonesia. Organized by the UN Economic and Social Commission for Asia and the Pacific (ESCAP), the UN Conference on Trade and Development and the Asian Development Bank, the conference attracted delegates from over 37 countries.
"The meeting has come up with some clear regional perspectives and actionable proposals," ESCAP Executive Secretary Kim Hak-Su said, adding that the discussions were a "good start" to the process of gaining consensus and collaboration between Member States, UN organizations and financial institutions.
According to the meeting's final report, the long-term economic prospects of the Asian region are "bright," but there is concern that foreign private capital will likely bypass the low-income and least-developed countries. The delegates agreed that foreign direct investment would be most desirable for low-income States, in particular given their limited absorptive capacity for portfolio investment and commercial bank loans.
The delegates also agreed that the mobilization of domestic resources was a central issue in economic development, and warned that adverse developments in prices of exports, sharp fluctuations in exchange rates, and instability in the international financial system could severely constrain such efforts.
On the question of managing foreign domestic financial markets, the participants highlighted the need for further capacity-building in the financial system -- both for government regulators and financial institutions -- in order to improve credit analysis and risk management, and to enforce the discipline of disclosure.
The role of small and medium enterprises is increasingly important, the delegates noted, proposing that such companies be financed through venture capital funds, second boards of stock markets, official loan assets and commercial credit reference agencies that could collect information on their debt exposure.
The meeting was the first in a series of five regional consultations in preparation for a global conference on financing for development to be held next year.
Download the complete UNESCAP Press Release G/29/2000 here. You need Adobe Acrobat to view it.
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