Inaugural Forum Aims to Improve Capital Markets Development in CAREC
ISLAMABAD, PAKISTAN (29 August 2019) — Capital market regulators from members of the Central Asia Regional Economic Cooperation (CAREC) Program met for the first time in Islamabad today to discuss ways to improve capital markets by enhancing access to finance, supporting private sector development, spurring economic activities, and strengthening regional cooperation and integration.
Jointly organized by the Securities and Exchange Commission of Pakistan (SECP), the Asian Development Bank (ADB), the Central Depository of Pakistan (CDC), and the National Clearing Company of Pakistan Limited (NCCPL), the CAREC First Capital Market Regulators Forum being held from 29 to 30 August 2019 attracted high-level officials, including Pakistan’s Adviser on Finance Mr. Abdul Hafeez Shaikh; SECP Chairman Mr. Aamir Ali Khan; ADB Vice-President Mr. Shixin Chen; and more than 150 regulators from the CAREC region.
“Capital markets can play a key role in financing economic growth through facilitating trade and investment flows,” said Mr. Hafeez Shaikh. “As economies develop and investment projects become larger and more complex, efficient resource allocation and risk-sharing are facilitated by the development of capital markets.”
Mr. Khan noted in his welcome speech that the forum is the first step to develop a strong network of capital market regulators in the CAREC region and a great step towards accelerated development of capital markets among countries in Central Asia.
The financial sector in most CAREC countries remains dominated by traditional financial institutions such as banks. Development of capital markets in the region is lagging, with some CAREC members ranked low in market capitalization, according to the 2018 Global Competitiveness Report. Improved capital markets can unlock much-needed resources to boost economic growth and help achieve sustainable development, while strengthening regional cooperation that promotes more effective and efficient cross-border trade and investments.
“This forum underscores the need to build strong and meaningful cooperation among our capital markets,” said Mr. Chen. “The region needs much more financing and investments than public sector resources can alone provide. Mobilization of private sector funds, including through capital markets and long-term institutional resources, is critical to meeting development financing gaps of the CAREC region.”
The forum included panel sessions and open discussions covering country case studies, as well as specific topics such as lessons from capital markets integration, derivative market development, and fintech’s regulatory and regional implications. Representatives from ministries of finance, central banks, capital market supervisory bodies from all CAREC countries, and relevant industry professionals participated as panelists in the various sessions to share and discuss best international practices with the participants.
The CAREC Program is a partnership of 11 countries—Afghanistan, Azerbaijan, the People’s Republic of China, Georgia, Kazakhstan, the Kyrgyz Republic, Mongolia, Pakistan, Tajikistan, Turkmenistan, and Uzbekistan—to promote economic growth and development through regional cooperation, and supported by development partners. ADB hosts the CAREC Secretariat in its headquarters in Manila.
Since its inception in 2001, the CAREC Program has invested heavily in improving regional connectivity, promoting energy trade, and facilitating regional trade, with a total financing of almost $34 billion. In 2017, a new long-term strategy—CAREC 2030—was adopted by the 11 countries. This strategy expands the objective of the program to strengthen economic and financial stability, including through promoting cooperation among capital markets and strengthening the investment climate in Central Asia.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. In 2018, it made commitments of new loans and grants amounting to $21.6 billion. Established in 1966, it is owned by 68 members—49 from the region.