Latin American Capital Markets

492 KENROY DOWERS, RUBEN LEE, AND ANTONIO VIVESunderstand that the focus of pension reform should be to increase insurance for retirementThe same can be said for public policy regarding mutual funds and insurancemarkets. Vittas (1998) indicates that the promotion of private pension funds and insurancecompanies should be pursued for their own sake and for their potential economic,fiscal, and financial benefits; such promotion should not be dependent on theprior development of securities markets.hownershipThe concept of ownership in the context of capital market development projects iscomplex. It refers to the extent to which the recipients of aid, technical assistance, orother types of support for such projects, in both the private and public sectors, areinterested in the project, believe that they are involved in the project, and wish tocommit themselves to support the project. Given that the development of a marketrequires participation at many levels by both the private and public sectors in a jurisdiction,such ownership is vital for any project to succeed.At the most extreme level, without ownership of the projects, the relevantmarket participants do not support the development of capital markets. One exampleof where this occurred was in the provision of technical assistance programs inRussia. As noted by Cadogan Financial (1999, pp. 13-14):... Long delays between an initial request for help and the inceptionof projects have often meant that the problem for whose solutionaid had been requested had either gone away, been solved by othermeans, or mutated.The project nonetheless continued without variation,often with the result that the recipient ignored the consultantsor that the consultants simply didn't contact their client.Although there is no simple method to ensure the ownership of a developmentproject by local official and private sector counterparts, a range of techniquesmay be used to maintain their interest and involvement. Prior to the inception of theproject, all relevant parties need to be involved in the discussions regarding the goalsand implementation process of the project and how its success should be evaluated.Throughout the project, an ongoing dialogue is also required, both to communicateto recipients how the project is proceeding and to ensure that counterparts haveadequate input into the development of the project.Copyright © by the Inter-American Development Bank. All rights reserved.For more information visit our website: www.iadb.org/pub