Pension reform and capital market development -"feasibility"and"impact"preconditions

The link between pension reform, and capital market development, has become a perennial question, raised every time the potential benefits, and pre-conditions of pension reform are discussed. The author asks two questions. First, what are the basic"feasibility"pre-conditions for the successful launch of a pension reform program? And second, what are the necessary"impact"pre-conditions for the realization of the potential benefits of funded pension plans for capital market development? His main conclusion is that the feasibility pre-conditions, are not as demanding as is sometimes assumed. In contrast, the impact pre-conditions are more onerous. The most import feasibility pre-condition is a strong, and lasting commitment of the authorities to maintaining macroeconomic, and financial stability, fostering a small core of solvent, and efficient banks, and insurance companies, and creating an effective regulatory, and supervisory agency. Opening the domestic banking, and insurance markets to foreign participation, can easily fulfill the second requirement. The main impact pre-conditions include the attainment of critical mass; the adoption of conducive regulations, especially on pension fund investments; the pursuit of optimizing policies by the pension funds; and, a prevalence of pluralistic structures. The author argues that pension funds are neither necessary, nor sufficient for capital market development. Other forces, such as advances in technology, deregulation, privatization, foreign direct investment, and especially regional, and global economic integration, may be equally important. But pension funds are critical players in"symbiotic"finance, the simultaneous and mutually reinforcing presence of many important elements of modern financial systems. They can support the development of factoring, leasing, and venture capital companies, all of which specialize in financing new, and expanding small firms.Infrastructure Finance,International Terrorism&Counterterrorism,Pensions&Retirement Systems,Payment Systems&Infrastructure,Non Bank Financial Institutions,Pensions&Retirement Systems,Economic Theory&Research,Infrastructure Finance,Infrastructure Finance,Non Bank Financial Institutions

An empirical investigation on EDI determinants and outcomes in Malaysian industry

Government involvement is the main cause for the EDI acceptance in Southeast Asian countries (United Nation of Economic and Social Commission for Asia and Pacific - UNESCAP, 1996). This is significantly different from the EDI developments in the western countries in which private sector involvement in EDI is substantial (UNESCAP, 1996). As an initial step to spur EDI implementation in private sector, the Malaysian Government has imposed all companies that engage in international trade to implement EDI by doing electronic customs declarations through CIS (Customs Information System) DagangNet. For this, the Government also spent over RM 300 million to fully implement EDI nationwide (Star, 2003 December 3). Nevertheless, such implementation is not successful and it has been claimed that “EDI is not yet fully implemented even though it had been initiated since late 1990s, besides electronic data is also still not recognized for legal customs declaration purposes even if it was meant for paperless and electronic customs declarations” (Star, 2003 December 3). To date, there are dual customs declarations, both electronic and manual, in practices where the sole typical electronic transaction is registration of the customs form (Jimmy, 2005; Star, 2005 July 11). This is in contrast with electronic customs declarations by other countries such as Hong Kong, Korea and Singapore where there is a full electronic declaration including electronic payment for declarations charges (Jimmy, 2005; Star, 2005 July 11; Chau, 2001)

The political economy of convergence: The case of IFRS for SMEs.

This paper examines the processes used by the International Accounting Standards Board (IASB), in achieving widespread convergence to the International Financial Reporting Standards (IFRS) by developing economies. Global convergence of financial reporting standards is a politically motivated agenda. The movement towards standardisation of financial reporting has been described in various ways including, adoption, application, transitioning, implementation (Brown and Tarca 2012), harmonization (Strouhal 2012) and convergence (Stevenson 2012; Street 2012; Pawsey, Brown and Chatterjee 2013). In this paper the term convergence encapsulates the efforts by developing countries to revise their national standards to be the same as IFRSs. The IFRS for Small and Medium sized Enterprises (IFRS for SMEs) was partly to facilitate developing economies’ commitment to convergence (UNCTAD 2009). Introducing a two-tier system implied by a special IFRS for SMEs is the first synthesis of the international convergence process (Rodrigues and Craig 2007). Given that small and medium sized enterprises (SMEs) are increasingly important in the global economy, it is equally important that there is a clear set of principles underpinning financial reporting for these entities. However, there is limited discussion on the development of the IFRS for SMEs in the academic literature. Only very recently have academics from developing countries engaged in discussions on IFRS for SME adoption (Phang and Mahzan 2013). Therefore, this paper provides an understanding of the activities that led to the promulgation of the standard and the efforts of the World Bank, the United Nations and other international organisations to bring this issue onto IASB’s agenda since early 2000. This paper is timely as the IASB has commenced its comprehensive review of the IFRS for SMEs (IASB 2012)

Global Financial Regulatory Reforms:Implications for Developing Asia

The objective of global regulatory reform is to build a resilient global financial system that can withstand shocks and dampen, rather than amplify, their effects on the real economy. Lessons drawn from the recent crisis have led to specific reform proposals with concrete implementation plans at the international level. Yet, these proposals have raised concerns of relevance to Asia’s developing economies and hence require further attention at the regional level. We argue that global financial reform should allow for the enormous development challenges faced by developing countries—while ensuring that domestic financial regulatory systems keep abreast of global standards. This implies global reforms should be complemented and augmented by national and regional reforms, taking into account the very different characteristics of emerging economies’ financial systems from advanced economies. Key areas of development focus should be (i) balancing regulation and innovation, (ii) establishing national and cross-border crisis management and resolution mechanisms, (iii) preparing a comprehensive framework and contingency plan for financial institution failure, including consumer protection measures such as deposit insurance, (iv) supporting growth and development with particular attention to the region’s financial needs for infrastructure and for SMEs, and (v) reforming the international and regional financial architecture.financial regulatory reform; global financial architecture; G-20; Asia; national and regional reform

Foreign Capital Investment into Developing Countries: Some Economic Policy Issues

This paper analyses the role of foreign capital in the economic development of developing countries, particularly South Asian and East Asian countries. Mainstream economists suggest that foreign investment would benefit developing countries by increasing the availability of capital, and through their positive impact over productivity and the general economic wellbeing of the host country. After the Second World War, the rapid economic growth first of Japan and later on of South Korea, Hong Kong, Singapore, and Taiwan has been widely cited in support of foreign capital. It is true when we look at the records in terms of the removal of poverty, job creation, educational achievements and improving the overall living conditions. I find however, that such discussions have ignored the experiences of developed countries in their early phase of industrialisation. In addition there is a lack of attention to the analysis of the issue of capital inflows in the context of neoliberal economic reforms and financial deregulation. After the global financial crisis in 2008, capital inflows to developing countries have witnessed a sharp decline. Foreign investments are highly sensitive to foreign exchange rate fluctuations. Thus, under such a situation, it is difficult to build a long term industrialisation strategy

Electronic government procurement adoption behavior amongst Malaysian SMEs

The aim of this study is to investigate the relationship between a model of electronic procurement (e-procurement) adoption behavior and the level of Government e-procurement adoption amongst Small Medium Enterprise (SME) in Malaysia. Data was collected through questionnaires that were distributed to SME selected randomly in all SME in Malaysia.The data were analyzed using factor analysis, reliability analysis, independent-sample t-test, descriptive statistics, Pearson Correlation and multiple regressions. Regression results reveals that ‘power’, ‘trust’ and ‘value’ have a positive relationship with the level of e-procurement adoption amongst SME in Malaysia.All dimensions, namely; the power of supplier, power of procurement, trust on supplier, trust on information technology, value of implementation system efficiency and value of cost efficiency were also correlated with the level of e-procurement adoption amongst SME. Past studies on e-procurement are beset by problems of buyer-seller relationship perspective.In addition, these studies are skewed towards Government-SME relationship perspective which the Government possesses more power than SME and provide a better incentive to educate and influence SME to adopt e-procurement.In investigation the relationship between a model of e-procurement adoption behavior and the level of Government e-procurement adoption amongst SME in Malaysia, this study also tries to provides recommendation to Malaysian government for improving the level of e-procurement adoption amongst SME

Capital account regulations and the trading system: a compatibility review

This repository item contains a single issue of the Pardee Center Task Force Reports, a publication series that began publishing in 2009 by the Boston University Frederick S. Pardee Center for the Study of the Longer-Range Future. Spanish version produced by the Center for the Study of State and Society, Buenos Aires. Portuguese version coordinated by Daniela Magalhaes Prates, a contributing author of the report, in collaboration with Ana Trivellato (translator), and Maria Inês Amorozo (graphic designer).This report is the product of the Pardee Center Task Force on Regulating Capital Flows for Long-Run Development and builds on the Task Force´s first report published in March 2012. The Pardee Center Task Force was convened initially in September 2011 as consensus was emerging that the global financial crisis has re-confirmed the need to regulate cross-border finance. The March 2012 report argues that international financial institutions – and in particular the International Monetary Fund – need to support measures that would allow capital account regulations (CARs) to become a standard and effective part of the macroeconomic policy toolkit. Yet some policymakers and academics expressed concern that many nations — and especially developing countries — may not have the flexibility to adequately deploy such regulations because of trade and investment treaties they are party to. In June 2012, the Pardee Center, with the Center for the Study of State and Society (CEDES) in Argentina and Global Development and Environment Institute (GDAE) at Tufts University, convened a second Task Force workshop in Buenos Aires specifically to review agreements at the WTO and various Free Trade Agreements (FTAs) and Bilateral Investment Treaties (BITs) for the extent to which the trading regime is compatible with the ability to deploy effective capital account regulations. This report presents the findings of that review, and highlights a number of potential incompatibilities found between the trade and investment treaties and the ability to deploy CARs. It also highlights an alarming lack of policy space to use CARs under a variety of FTAs and BITs—especially those involving the United States. Like the first report, it was written by an international group of experts whose goal is to help inform discussions and decisions by policymakers at the IMF and elsewhere that will have implications for the economic health and development trajectories for countries around the world