Sustainable Recovery in Asia : Mobilising Resources for Development.

193 Pages·2000·0.591 MB·English

by  OECD

«
Development Centre
Seminars
Sustainable Recovery
in Asia
Mobilising Resources
for Development
INTERNATIONAL DEVELOPMENT
Preface by Jorge Braga de Macedo
and Tadao Chino
© OECD, 2000.
© Software: 1987-1996, Acrobat is a trademark of ADOBE.
All rights reserved. OECD grants you the right to use one copy of this Program for your personal use only.
Unauthorised reproduction, lending, hiring, transmission or distribution of any data or software is prohibited.
You must treat the Program and associated materials and any elements thereof like any other copyrighted
material.
All requests should be made to:
Head of Publications Division
Public Affairs and Communication Directorate
2, rue André-Pascal, 75775 Paris
Cedex 16, France.
Development Centre Seminars
Sustainable Recovery
in Asia
MOBILISING RESOURCES
FOR DEVELOPMENT
Preface by
Jorge Braga de Macedo and Tadao Chino
ASIAN DEVELOPMENT BANK
DEVELOPMENT CENTRE OF THE ORGANISATION
FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
ORGANISATION FOR ECONOMIC CO-OPERATION
AND DEVELOPMENT
Pursuant to Article 1 of the Convention signed in Paris on 14th December 1960, and
which came into force on 30th September 1961, the Organisation for Economic Co-operation
and Development (OECD) shall promote policies designed:
– to achieve the highest sustainable economic growth and employment and a rising
standard of living in Member countries, while maintaining financial stability, and thus
to contribute to the development of the world economy;
– to contribute to sound economic expansion in Member as well as non-member
countries in the process of economic development; and
– to contribute to the expansion of world trade on a multilateral, non-discriminatory
basis in accordance with international obligations.
The original Member countries of the OECD are Austria, Belgium, Canada, Denmark,
France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway,
Portugal, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States.
The following countries became Members subsequently through accession at the dates
indicated hereafter: Japan (28th April 1964), Finland (28th January 1969), Australia
(7thJune1971), New Zealand (29th May 1973), Mexico (18th May 1994), the Czech Republic
(21st December 1995), Hungary (7th May 1996), Poland (22nd November 1996) and Korea
(12th December 1996). The Commission of the European Communities takes part in the work
of the OECD (Article 13 of the OECD Convention).
THE OPINIONS EXPRESSED AND ARGUMENTS EMPLOYED IN THIS PUBLICATION ARE THE SOLE
RESPONSIBILITY OF THE AUTHORS AND DO NOT NECESSARILY REFLECT THOSE OF THE OECD OR OF
THE GOVERNMENTS OF ITS MEMBER COUNTRIES.
*
* *
Publié en français sous le titre :
Pour une relance durable en Asie
MOBILISER DES RESSOURCES POUR LE DÉVELOPPEMENT
© ADB/OECD 2000
Permission to reproduce a portion of this work for non-commercial purposes or classroom use should be
obtained through the Centre français d’exploitation du droit de copie (CFC), 20, rue des Grands-Augustins,
75006 Paris, France, Tel. [phone], Fax [phone], for every country except the United
States. In the United States permission should be obtained through the Copyright Clearance Center,
Customer Service, [phone], 222 Rosewood Drive, Danvers, MA 01923 USA, or CCC Online:
http://www.copyright.com/. All other applications for permission to reproduce or translate all or part
of this book should be made to OECD Publications, 2, rue André-Pascal, 75775 Paris Cedex 16, France.
Asian Development Bank
Established in 1966, the Asian Development Bank (ADB) is a multilateral,
development finance institution owned by 59 members, mostly from Asia and the Pacific.
ADB’s fundamental goal is to reduce poverty in the Asian and Pacific region. To this
end, it fosters economic growth, supports human development, improves the status of women,
and protects the environment. ADB’s principal assistance for developing member countries
comprises loans and technical assistance. While a large portion of the assistance is used in
public projects and programmes, ADB also pays special attention to private sector development.
ADB headquarters is in Manila, Philippines. The Bank has resident missions in
13Asian countries, a regional mission for the Pacific, and three representative offices in
Frankfurt, Tokyo, and Washington, D.C. ADB’s staff numbers 2000 employees from nearly
50 countries.
Headquarters Mailing Address
6 ADB Avenue, Mandaluyong City P.O. Box 789
0401 Metro Manila, Philippines 0980 Manila, Philippines
Tel: [phone]
Fax: [phone]
E-mail: [email protected]
Website: http://www.adb.org
OECD Development Centre
The Development Centre of the Organisation for Economic Co–operation and
Development was established by decision of the OECD Council on 23rd October 1962
and comprises twenty–three Member countries of the OECD: Austria, Belgium, Canada,
the Czech Republic, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy,
Japan, Korea, Luxembourg, Mexico, the Netherlands, Norway, Poland, Portugal, Spain,
Sweden and Switzerland, as well as Argentina and Brazil from March 1994, and Chile
since November 1998. The Commission of the European Communities also takes part in
the Centre’s Advisory Board.
The purpose of the Centre is to bring together the knowledge and experience available
in Member countries of both economic development and the formulation and execution
of general economic policies; to adapt such knowledge and experience to the actual needs
of countries or regions in the process of development and to put the results at the disposal
of the countries by appropriate means.
The Centre has a special and autonomous position within the OECD which enables it
to enjoy scientific independence in the execution of its task. Nevertheless, the Centre can
draw upon the experience and knowledge available in the OECD in the development field.
3
Foreword
This publication was undertaken in the context of the International Forum on
Asian Perspectives, jointly organised by the Asian Development Bank and the OECD
Development Centre. It forms part of the Centre’s research programme on Capital
Flows, Financial Crises and Development, and the Centre’s External
Co–operation activities. The Forum held its sixth meeting in Paris on 3 and 4July 2000
on the theme “Development Resource Mobilisation in the Post–Crisis Period”.
Contributions to that meeting are included in this volume.
4
Table of Contents
Preface
Jorge Braga de Macedo and Tadao Chino........................................................ 7
Introduction
Colm Foy, Yun–Hwan Kim and Helmut Reisen................................................... 9
PART ONE
FINANCIAL RESOURCES FOR DEVELOPMENT
Post–Crisis Policy Agenda for Reforming the Financial Sector in Asia
Yun–Hwan Kim ................................................................................................... 19
Fiscal Outcomes and the East Asian Economic Crisis
J. Edgardo Campos and David Jay Green......................................................... 43
The Need for Foreign Savings in Post–Crisis Asia
Helmut Reisen and Marcelo Soto....................................................................... 65
Best Practices for Promoting Private Sector Investment in Infrastructure
Sean O’Sullivan.................................................................................................. 87
PART TWO
PUTTING POLICIES INTO PRACTICE
Inaugural Address
Stéphane Pallez................................................................................................... 109
Welcoming Remarks
Jorge Braga de Macedo ..................................................................................... 113
Keynote Address
Tadao Chino........................................................................................................ 119
Post–Crisis Asia: Resource Mobilisation through Capital Markets,
IFIs and the Private Sector
Christine Wallich ................................................................................................ 123
5
Towards Sustainable Growth of the Asian Economy
Ken Yagi .............................................................................................................. 129
Complacency is Out of Place
Norbert Walter .................................................................................................... 135
Public Expenditure Reform
Hafiz Ahmed Pasha............................................................................................. 141
Risk–Informed Capital Flows — A Global VaR Approach
José Braz............................................................................................................. 151
Foreign Direct Investment in Korea: The Role of the Ombudsman
Kim–Wan Soon ................................................................................................... 159
Lessons from the Asian Crisis
Philippe de Fontaine Vive.................................................................................. 173
Programme .......................................................................................................................177
List of Authors and Participants .....................................................................................183
6
Preface
The Sixth International Forum on Asian Perspectives met in early July 2000 to
discuss ways in which fresh and sustainable financing could be found in the wake of Asia’s
economic crisis specifically for development projects. The Forum, founded in 1995 by
the Asian Development Bank and the OECD Development Centre, provides a venue for
the discussion of contemporary Asian economic problems by experts and other concerned
individuals from the political, business, academic and media communities.
The causes of the financial crisis of the late 1990s will remain a matter for
discussion for many years, but there is no doubt that a major element was the volatility
of financial flows. Fast–developing East Asia built its growth largely on domestic
savings, but it also benefitted much from foreign inflows; when these flows were
reversed, the economies faltered. This had important implications for public resources,
causing revenues to shrink even as demands on the budget soared. It also revealed the
inadequacy of the public sector to pay for development projects.
The supply of public services and infrastructures has increasingly become
dependent on input from the private sector. This input can consist of partnerships in
service delivery, or the privatisation of parts of the economy formerly assumed to be
the state domain. For the private sector to become — and to stay — involved in the
provision of public goods and services, sound sources of financing need to be found
and a business environment conducive to long–term investment has to be created.
The broad conclusions of the Sixth International Forum on Asian Perspectives
point to the imperative of finding innovative solutions to the problem of development
funding. At the same time, the Forum reinforced the view that, beyond growth,
economic development depends upon reducing poverty and providing employment.
We hope that this book will also contribute to the adoption of appropriate poverty–
reduction strategies throughout the region.
Jorge Braga de Macedo Tadao Chino
President President
OECD Development Centre Asian Development Bank
Paris Manila
October 2000
7
List of Abbreviations and Acronyms
ADB Asian Development Bank
BLS Bank–led Governance System
BOOT Build–own–operate–transfer
BOT Build–operate–transfer
CPI Consumer Price Index
CSD Central Securities Depository
DVP Delivery versus Payment
EFB Exchange Fund Bill
EFN Exchange Fund Note
EFP Exchange Fund Paper
EMBI Emerging Market Bond Index
FDI Foreign Direct Investment
GDP Gross Domestic Product
IMF International Monetary Fund
LIBOR London Interbank Offered Rate
LOI Letter of Intent
MLE Medium and Large Enterprise
MSE Micro and Small Enterprise
MTN Medium–term Notes
ODA Official Development Assistance
OECD Organisation for Economic Co–operation and Development
OIO Office of the Investment Ombudsman
PPP Purchasing Power Parity
PSP Private Sector Participation
SDDS Special Data Dissemination Standards
SOE State–owned Enterprise
S&P Standard & Poor’s
Special Note: Country Nomenclature
a. China refers to the People’s Republic of China (PRC).
b. Hong Kong, Hong Kong, China (ADB convention) and Hong Kong (China) (OECD
convention) are interchangeably used.
c. The Republic of Korea is usually called Korea throughout.
d. Taipei, China (ADB convention) and Chinese Taipei (OECD convention) are
interchangeably used.
8