Financial markets program development in the Near East and Asia : an operational guide for AID project officers

project officers. The guidebook also provides a summary of the policy context for financial markets programming within A.I.D., as well as a summary of our experience in financial market development to date. This guidebook does not prescribe areas for financial markets development. Given the diversity of political, economic and social conditions in which A.I.D. operates, there is no one approach to financial markets development that is suitable for all countries. Rather, the guidebook is intended to provide some practical programmatic suggestions for project officers, and in the process to encourage greater sharing of ideas on financial markets strategies within A.I.D., between A.l.D. and other donors, and between A I.D. and the private business community. The guidebook is structured in four parts. Part One explores what we mean by "financial markets development". It includes a discussion of the international evolution of financial markets in order to provide a historical context for A.I.D."s financial markets programs, as well as a brief summary of financial markets in the Near East and Asia. The heart of the guidebook -- Chapter 3 of Part One -- examines potential areas for activities in financial markets development. The areas examined include macroeconomic policy, commercial banking, expansion of securities markets, quality of information, other financial institutions, privatization, and informal financial markets. Part Two of the guidebook examines policies and programs in financial markets development, including those of A.I.D. and other major multilateral donors and U.S. Government agencies. We begin by looking at the policy framework for financial markets development in the U.S. Government and A.I.D. and then examine the types of interventions A.I.D. missions have undertaken over the past decade. A key theme of this part of the guidebook is how A.I.D."s financial market policy and programs have evolved over time -- and how they continue to evolve. Based on our review of A.I.D."s financial markets activities, we have identified some of the key trends and directions for future programming. Areas for collaboration between A.I.D. and other institutions are highlighted at the conclusion of this part of the guidebook. Part Three of the guidebook explores the "how-to"s" of financial markets programming. It describes how to conduct a financial sector assessment, a critical first step toward defining options for financial markets programming. This part also provides some general guidelines for the design of financial markets programs, as well as guidance on how to evaluate such programs. Part Four of the guidebook describes resources for financial markets development that may be useful. It provides an illustrative list of technical assistance and training resources, a calendar of up-coming events focusing on financial markets, and an annotated bibliography of sources of information on financial markets development. (Author abstract)