A. OVERVIEW OF PUBLIC-PRIVATE SECTOR PARTNERSHIP WITHIN CURRENT BOND MARKET DEVELOPMENT INITIATIVES IN THE REGION

The public and private sectors each have proper roles to play in development. A healthy market economy is normally one where the private sector engages in robust innovation and competition, while the public sector provides sound legal and policy frameworks, regulation and supervision. However, there is much scope for both sectors to enhance each other's effectiveness in playing their respective roles. There are also areas where direct collaboration can be fruitful, such as in infrastructure development. It is in this sense that public-private sector partnership is understood in this report.

The development of bond markets is highly relevant to the Asia-Pacific region's current situation. In a defensive sense, robust bond markets strengthen economies against financial instability. In the offensive sense, they play a crucial role in economic development, meeting the needs of ageing populations, and critical infrastructure financing. Such markets also provide better opportunities to a wide range of private sector market players such as institutional and retail investors, borrowers, intermediaries and other related professionals and service providers.

Experiences of bond market development efforts in East Asia and Latin America, as well as in the broader Asia-Pacific region, illustrate the importance of cooperation between public and private sectors. Policymakers in the Asia-Pacific region are conscious of the need to design financial systems and market infrastructure in cooperation with the private sector, especially global, regional and domestic market players. The involvement of organized private sector-led groups such as ABAC and PECC in APEC initiatives, as well as that of regional industry groupings such as the ABA and ACRAA, is part of this growing cooperation.

Within East Asia, in the context of ABMI, there is a growing realization that public sector priorities must be made to converge with private sector needs, if the initiative is to succeed.