Finance For Development Fig 1: Consumer Price

Transcript:Finance For Development Fig 1: Consumer Price:
Finance For Development Fig 1: Consumer Price Inflation (Annual %) Source: World Development Indicators Fig 2: Current Account Balance (% GDP) Source: World Development Indicator Fig 3: Currency[1] to Deposit[2] ratio Back Fig 4: Currency-to-Deposit Ratio (6 Month Moving Average) Fig 5: Gross Domestic Savings (as % of GDP, 2017) Source: World development Indicators Fig 6: Bank deposits as a percentage of GDP (%) Back Source: Global Financial Development Fig 7: Pakistan’s Relative Standing in Credit-to-GDP ratio (2010-17 Average) Source: World Development Indicator Fig 8: Net Budgetary Borrowing from Sched. Banks (% - GDP) Fig 9: Shares of SME Financing in Total Financing Source: SBP Fig 10: Public Debt Management Fig 11: Corporate Bond Market Size (as % of GDP, 2018) Source: Asiabondonline.com Fig 12: Ownership Matters Suggestions for Government Policy priorities: 1. Restructure of GoP domestic debt management and objectives, to widen distribution, and to develop liquid Sovereign yield curve. 2. Empower and facilitate current public sector development lenders – ZTBL, Housing, and SME – key aim is advisory effectiveness. 3. Mobilise apex Infrastructure lending organizations for raising Public/PPP debt in Project finance structure, versus issue of Government guarantees. 4. Facilitate financial inclusion via Digitization: digitize Government payments; licensing payment companies; fiscal concessions; permit use of global Cloud; crowd funding, etc. Fresh Spectrum auction must be at market clearing prices. Government Debt Management: DMO has been appointed, candidates sought for key supporting positions. DMOs operational targets should be to reduce reliance on Bank funding, from 82% to 50%; and increase debt maturity profile, from 1.6 to 3.5 years – within 2 years. Development sector (Agri, SME, Housing): International experience in major EMs shows that Public institutions lead, and private banks follow. The reason is - these segments handicapped by limitations in “soft” and “hard” infrastructural support - For example: + Product perishability, and distance from price discovery, for farmer reduces his ‘margin’ to subsistence level and reduces production efficiency; + SMEs need to be guided into clusters/supply chains, and partly be financed via factoring; + Mortgage finance requires clear title; repossession assurance; refinance and interest risk insurance etc.; Supporting effort is best led by Institutions with Public stakeholder interest, and capacity to influence needed changes in rules, regulations, and laws. Once development sectors enjoy this development and advisory support, Private banks will be willing to look at cash-flow based finance, and raise their lending profile. Infrastructure: Early establishment of