A. CONCLUDING SUMMARY

This conference focused on promoting private sector participation in the development of local currency bond markets and in facilitating the emergence of a regional bond market in the Asia-Pacific region. Building on the conclusions of the ABAC/PECC 2004 Taipei bond market conference about the necessary conditions for attaining these objectives, public and private sector participants conducted an assessment of the extent to which such conditions are met in individual emerging markets and in the APEC region.

Considering first the experiences of developed economies, a number of issues have been found relevant.

1. • The first is that private long-term debt markets should be the ultimate focus of efforts, given their importance to the overall process of economic development.

2. • Second, the experiences of advanced economies provide useful lessons and a body of continuously evolving international best practice that could benefit emerging markets, which makes it important for developed economies to participate actively in regional collaborative efforts.

3. • Third, appropriate pricing of risk by market participants is crucial to the growth of bond markets, and can be achieved through sound macroeconomic policies, an open economy and financial sector, and a sound institutional framework.

4. • Fourth, a broad institutional and retail investor base is needed in addition to the above policies and institutional framework, with government bond markets and investor education playing important roles.

5. • Fifth, public-private sector cooperation is indispensable for the success of efforts to develop the institutional framework and promote adequate supply and demand in the market.

Focusing on the extent to which emerging markets in APEC are able to provide a conducive environment for private sector participation in local currency bond markets, the presentations and discussions yielded the following assessment:

1. • There are wide disparities among developing APEC economies, but they may be broadly classified into two groups — a number of more developed emerging markets that have made significant advances, and a second group of markets that are still in the early stages of development.[…]