Predicating a program on the passage of a law should be minimized unless there is strong ownership to pass the law from both the executive and the parliament. Relying on development partners to complete the reform (revision of a law) introduces a risk that performance targets will not be achieved. Development partners may have different priorities and timelines that do not necessarily coincide with the requirements of ADB’s program. In the case of Indonesia, the reform agenda would have been better served if ADB had provided dedicated technical assistance to identify capital market development constraints, followed by advisory support to draft revisions to the law. Significant capacity building and exposure to international best practices are also important. In addition, since legislative reform involves the parliament, position papers that help the government highlight the importance of the legal amendment would also be useful.
Financial Market Development and Inclusion Program