13th February 2022, Skopje – Benefits from liberalization of financial markets and mobilizing financial resources are considerable for both the business sector and the economy. Mobilizing capital and allocating it to more productive positions: new projects, start-ups, export-oriented companies, SMEs, underpin economic activity and encourage growth. Hence, capital market development will play a crucial role in accelerating the economic growth.
Minister of Finance, Fatmir Besimi, wrote in his article published yesterday, stating that clear vision and plan are set to achieve the goal – continuously higher economic growth rates of around 5% annually, which could be attained with the Growth Acceleration Plan placing special emphasis on access to capital, to be used to finance projects in both the public and the private sector, all to the end of scaling up total investments, boosting the economy’s competitiveness and encouraging the growth.
“Against a background of scarce financial resources, economic growth should be financed with a more efficient allocation of funds. This implies increased possibilities to finance more risky projects which the banks (due to objective limitations) are not able to participate in more intensively, and the efforts for economic development should be aimed at other segments of the financial markets with such mechanisms already put in place, the Minister pointed out.
According to him, the more the national capital market is developed, the easier and more successfully the companies will cope with each new situation, they will not depend on the banking financing alone and will boost their international competitiveness.
He pointed out that mobilizing capital and allocating it to more productive positions: new projects, start-ups, export-oriented companies, SMEs, underpin economic activity and encourage growth. Hence, as he says, capital market development will play a crucial role in accelerating the economic growth.
In the light of this context, four strategic guidelines are identified in the Strategy, translated into specific goals and measures, part of which are in preparatory stage already. The guidelines include increased participation of individual and institutional investors by expanding the demand for domestic securities, broadening the investment alternatives by increased offer of equity securities and debt securities, strengthening the regulations for the purpose of their harmonization with the EU Directives, and raising the awareness and advancing the financial education of the corporate sector and the households. Set of measures are envisaged as regards the offer, the demand, the regulations and the financial education, geared towards their achievement.
In his article, he points out that demand is envisaged to be encouraged through generating higher returns as a result of the measures aimed at reducing transaction, information and tax costs.
As regards increased offer, issuance of new instruments by the Government is envisaged, which are geared towards the accomplishment of the goals under the Growth Acceleration Plan, and will also add value to the offer on our capital market and the manner of financing of the Government. Moreover, as the Minister explains in the article, introduction of development, inflation-indexed, green, project and regional bonds is envisaged.
Changes in terms of the regulatory framework are in support of increased efficiency in the operations of the regulatory bodies, comprehensiveness, as well as fast adjustment to the changeable and innovative environment in the financial sector. As the Minister says in the article, by recognizing the good practices of the developed countries, a need to merge the regulatory bodies of the non-banking institutions has been acknowledged, all to the end of enhancing their capacities and operating efficiency.
Financial sector and instruments, subject to continuous improvement and adjustments responding to the new needs, according to Besimi, require good knowledge by the investors. Therefore, the last defined strategic commitment incorporates raising the public awareness through financial education, with various programs being envisaged therefore, geared towards strengthening the capacities, such as establishing an interinstitutional body for implementation of activities to increase the level of financial education, as well as long-term implementation of comprehensive programs focusing in particular on the young people, all to the end of encouraging their participation on the capital market.
Minister of Finance Fatmir Besimi underlined that coordinated institutional approach, inclusiveness and harmonization with the global trends we adhere to when designing the solutions envisaged in the Strategy, as well as the strong commitment of the Ministry of Finance to implement them, will be recognized and reflected through increased confidence in the financial markets and by utilizing their potential in the economy.