WASHINGTON, D.C., September 30, 1999 — The International Finance Corporation will hold a South Asia Regional Debt Market Symposium in Sri Lanka in order to build a shared regional view on the importance of local debt markets for economic development and to create specific action plans to develop each domestic market.
The East Asian crisis highlighted the serious problems that can arise when corporations and financial institutions rely too heavily on short-term funding and foreign currency borrowings. Local debt markets eliminate foreign exchange risk and provide longer term local currency financing in amounts that banks cannot often support, while providing the opportunity to reduce interest rate volatility. In addition, debt markets help reduce stress on the banking system during times of financial crisis, supply long-term investment opportunities for institutional investors (such as pension funds and insurance companies) and support infrastructure financing. In recent years, numerous emerging market countries have been developing local debt markets, although the pace of development remains slow due to many regulatory and institutional problems. The symposium aims to address these impediments head on so that South Asian countries can learn from one another's experience and work together.
Participants will be regulators and key market players from five South Asian nations—Bangladesh, India, Nepal, Pakistan, and Sri Lanka—along with special guests from other emerging markets and developed countries. The program will consist principally of working sessions where small groups will discuss obstacles to market development, and how to resolve and remove them. Experienced special invitees will actively participate in working groups and contribute towards generating practical solutions.
The symposium complements IFC initiatives related to debt markets, including funding and implementation of in-depth studies of each market, provision of technical assistance, and making institution-building investments in the region's financial sector.
The seminar emerges from a five-country study of local debt markets. The study and the seminar in Sri Lanka, were supported through IFC-managed trust funds established by the governments of New Zealand and Sweden. New Zealand finances the part of the study focusing on India and Pakistan, while the component financed by Sweden focuses on Bangladesh, Nepal, and Sri Lanka. The seminar itself was supported through IFC's Technical Assistance Fund, which is generally used to co-finance trust fund grants.
The mission of IFC, part of the World Bank Group, is to promote private sector investment in developing countries, which will reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses.
The Symposium will take place at the Taj Exotica Hotel in Bentota, Sri Lanka from October 6-8, 1999.
