Category Financial Sector Assessment

Strengthening Access to Foreign Capital

Effective strategies to enhance access to private foreign capital can provide a significant boost to economic growth and poverty reduction, but the benefits of such access can be realized only in proportion to a country’s level of institutional development.3 The rule of law, shareholder protection, adequate prudential regulation and supervision, and finan­cial transparency are significant determinants of whether capital account openness—to enhance access to foreign capital—is beneficial or harmful.

Enhanced access can be achieved by a combination of two approaches:

• Attracting foreign investors and lenders to a domestic market by promoting foreign direct investment, foreign portfolio investment, bank financing from abroad, and infrastructure financing through public-private partner...

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