Madagascar - Financial policies for diversified growth
Barghouti, S. | Cromwell, E. | Pritchard, A.J. [editors]
This report has three objectives: (1) to identify strengths and weaknesses of Madagascar's financial systems; (2) to formulate policy options which could enable the financial system to better serve the country's objectives of sustainable and diversified growth; and (3) to recommend an appropriately sequenced strategy for financial system development that could be implemented within the 1990s. An important financial system is important to Madagascar. An efficient financial system can play a major role in expansion of domestic and foreign trade, stimulation of domestic savings and appropriate channeling of available sources to productive uses. A system of appropriate financial institutions, instruments and markets enables economic agents to pool price and trade the risks associated with economic activites which individual entrepreneurs may not wish to bear entirely. A well developed financial system with adequate depth and range of financial instruments can help address the concern of Malagasy policy makers to more effectively conduct macroeconomic policy and adjust to internal and external shocks. The report describes the current Malagasy financial sector and focusses on the key economic challenge of resource mobilization and allocation in the financial sector. The financial polices, the financial infrastructure, and the financial system are analyzed and an outline of a financial sector develop strategy based on the analysis is provided.
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