to help ensure that the infrastructure will allow the market to develop if borrowers and lenders wish it to, rather than to force the pace artificially. i believe, however, that there may be a stronger underlying interest in debt instruments among prospective borrowers and lenders than is currently visible on the surface. the move to list exchange fund notes on the stock exchange and the advent of the mandatory provident fund are examples of potential significant new sources of demand for debt instruments. it is a challenge for all of us to identify and exploit these and any other pockets of latent interest. the hong kong monetary authority is in regular dialogue with the hong kong capital markets association and we maintain an open mind, and an even more open ear, to ideas which people like you may have about the development of our markets. i should mention that we have regular contact also with the authorities of other centres in the region in order that we can gain from each other ’ s experience in such matters. summing up, although i described our market infrastructure in hong kong as relatively mature, you will have realised - if you were ever in any doubt - that there is no shortage of change and of potential new opportunities, although possibly not so many as in one or two of the other economies, which i reviewed earlier. i hope that all of you will participate in the continuing evolution of hong kong ’ s capital markets, and use hong kong as your base for incursions into other territories where similar or greater opportunities exist. our aim in hong kong is to provide an open and welcoming environment for business, and to be judged on our merits as a truly international centre which possesses that all important critical mass across the full range of financial, professional and commercial services and is ideally located as a hub for the region ’ s future development. note : fdi = inward foreign direct investment ; for india the first three columns are 198896, and the fourth 1991 - 96.

on small and medium enterprises credit in the asian region globalisation can be simply understood as the way in which the world has become a small ‘ village ’ or ‘ community ’ as a result of faster transport, communication and technological advancement which in turn resulted in the reduction in the cost of international trade, investment and in doing business ( time and space / distance ) between places and people. the asia - pacific region is part of this globalisation process, which has influenced the pace of growth and patterns in the region over the past decades. today we see vibrant and strong economies that are in the forefront of influencing the globalisation process itself through increased world trading, capital transfers and investments, skilled labour movements, and technological innovations and their use. there are many that argue, including those in our region, that globalisation has very limited impact on small and medium enterprises in the developing countries compared to those in the developed economies. there are also those who critically argue that globalisation has disadvantaged the small and medium enterprises in countries that do not have appropriate policy framework, regulations, entrepreneurial and managerial skills, finance and technology necessary for competition and survival. although this view has some merit, the reality about globalisation is that, among other positive changes, it eased capital transfers which provided for relatively easier access to funds by credit and supplementation institutions for on - lending to small and medium enterprises in the asia - pacific region. as international trade and investments increase, this trend is likely to continue and grow. innovative policies and practices of credit supplementation institutions in the asian region one of the major challenges to foster growth and sustainability, particularly in the developing economies, is the design and implementation of appropriate policies on developing small and medium enterprises. in economies where sound policies are in place, the problem may be due to the failure by the government to seriously ensure that those policies are implemented. as most small and medium enterprises in the developing economies do not have comparative advantage compared to large established companies, any attempts to capture niche markets, domestic as well as international, would be difficult unless appropriate government policies are in place and are effectively implemented to provide relief, particularly in the ‘ infant ’ stages of their growth cycle. observations from other economies, including japan, china and republic of korea showed that these countries have done very well because of their governments ’ policies and focus on encouraging small and medium enterprises to contribute towards economic growth. these are experiences worth noting and studying. regulation of small and medium enterprises small and medium enterprises in most countries do not have a