Barriers and Opportunities for Enhancing Capital Flows
In the COMCEC Member Countries
80
certain macroeconomic and financial system preconditions, which can in turn facilitate some
of the practical recommendations which are made within each of the sections.
The degree to which each of these policy recommendations is applicable to each of the
COMCEC Member Countries depends on a number of factors. A country’s ability to both attract
capital flows and benefit from them depends on its degree of economic development, the
extent to which it has followed sequencing of reforms, and the reform phase they are currently
in.
The table lists a set of policy recommendations and provides an indication – for each country
within a specific income group – of how urgent a priority the recommendation may be, and
how significant the barriers are to implementing the recommendation.
5.1. ACHIEVING THE RIGHT POLICIES TO ENHANCE CAPITAL FLOWS
Policy recommendations High priority Degree of obstacle Medium
priority
Low priority
Change in general investor
perception of risk and
business environment
 Organise face-to-face
investor road shows to
improve investor
perception
 Disseminate
information on country
data, people, lists,
potential joint venture
partners
LICs and LMICs –
important because it
helps to change
investor perception of
the country
Low – especially if
there are well-
educated government
officials with good
networks and good
language skills
Development and
implementation of
guidelines and regulations
relating to the financial
markets
 Change date for end of
year reporting
 Introduce mandatory
requirements of bank
CEOs changing after ten
years
 Stipulate compulsory
change in external
auditors after ten years
 Require adoption of
International Financial
Reporting Standards
(IFRS)
LMICs – need to have
confidence in the
country properly
implementing;
transparency
important
LICs – although
important, other
measures need
to be in place
before
UMICs / HICs –
likely to have
strong existing
guidelines and
regulations, and
sound financial
authorities.
Much of this has
been adopted
already
Improvement in efficiency
and depth of the capital
market
 Extend trading days
 Permit short selling
 Introduce regulated
market making
 Update trading
LICs, LMICs and
UMICs – depends on
the development of
the stock exchange in
the country; probably
less necessary for LICs
that have no stock
market
High – potentially
expensive to adopt
technology platforms;
extending trading
days may imply
resource costs. The
cost of meeting stock
exchange
HICs – many of
the countries
within these
groups have put
such measures
in place