ASIAN PUBLIC DEBT MANAGERS LAUNCH REGIONAL NETWORK

UNCLAS SECTION 01 OF 02 BANGKOK 000940

STATE FOR EAP/MLS AND EB
STATE PASS TO USTR
TREASURY FOR OASIA

SIPDIS

E.O. 12958: N/A
TAGS: EFIN ECON EINV APECO TH

SUBJECT: ASIAN PUBLIC DEBT MANAGERS LAUNCH REGIONAL NETWORK

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1. (SBU) Summary: The second Asian Public Debt Management (APDM)
Forum, held in Bangkok April 2-3, brought together government debt
management officials from thirteen Asian countries to discuss the
challenges of raising and managing fiscal resources in these
volatile markets. The Forum participants overwhelmingly agreed to
launch an APDM Network, and the Asian Development Bank (ADB) agreed
to provide financial and organizational support to the Network for
its first three years, along with substantive support promised by
the International Monetary Fund (IMF). The launch and
institutionalization of this network was the culmination of two
years of effort by FINATT/Singapore and U.S. Embassy Bangkok to
respond to a request from the Thai Public Debt Management Office.
End Summary.

Asian Debt Managers Discuss Fiscal and Debt Challenges, agree to
launch Network
--------------


2. (SBU) Thailand's Public Debt Management Office (PDMO),in
conjunction with the International Monetary Fund, the Asian
Development Bank and the World Bank, held the second Asian Public
Debt Management (APDM) Forum in Bangkok April 2-3. This event
brought together government debt management officials from thirteen
Asian countries (Brunei, Cambodia, India, Indonesia, Japan, South
Korea, Lao PDR, Pakistan, Singapore, Sri Lanka, Thailand, Turkey and
Vietnam) to discuss the challenges of raising and managing fiscal
resources in these volatile markets. (Note: See the Forum website
for the full agenda and supporting background papers at
http://www.pdmo.mof.go.th/asianregionalpdmfor um/index.htm. End
Note).


3. (SBU) During the Forum, public debt managers and International
Financial Institution (IFI)debt experts held substantive
discussions covering issues such as how to raise fiscal resources in
challenging debt markets, how to balance the costs and benefits of
foreign currency denominated offshore debt, how to develop robust
repo markets and other market infrastructure, and how to properly
coordinate debt and monetary policy with the central banks. The
non-governmental Asian Securities Industry and Financial Markets
Association (ASIFMA) also organized a panel of private sector bond
market experts to discuss ongoing market developments and provide
feedback on how to improve government bond market infrastructure.
The Department of Treasury resident debt management advisor to
Indonesia made a presentation on the importance and various
modalities of securities lending. At the end of the Forum, the
Asian debt managers overwhelmingly endorsed the launch of an annual
APDM Forum and efforts to support ongoing communications among the
debt managers by institutionalizing the APDM Network.

Marshalling Resources in Response to Thai Debt Manager Request
--------------

4. (SBU) Discussions of an APDM Network began in early 2007 with the
Department of Treasury's regional APEC consultations on how the USG
could aid local currency bond market development in Asia, while
avoiding duplication of the ASEAN+3 Asian Bond Market Initiative's
extensive activities. During that outreach, the Pongpanu
Svetarundra, Director General of Thailand's Ministry of Finance's
Public Debt Management Office (PDMO),suggested launching a regional
network of his peers to share experiences and successful strategies
for government debt management which, by extension, would benefit
the development of government bond markets. In response,
Finatt/Singapore organized a private sector-sponsored networking
event in February 2008 in Singapore which included public debt
managers from four Asian countries and was supported by Treasury
debt management advisors. In mid 2008, other Treasury experts
provided a seminar on cash and debt management to Thai officials
which helped crystallize the importance of many debt management
issues to the region. Afterwards, the Thai PDMO offered to sponsor
a larger networking event for Asian public debt managers in
Bangkok.


5. (SBU) For this Forum, Finatt/Singapore and Embassy Econoff
coordinated an advisory panel of debt experts for the Thai PDMO to
advise on the program. These experts came from the IMF offices in
Washington and Singapore as well as two offices of the ADB. The
advisory panel provided substantive guidance on the agenda, helped
identify and lobby senior level participants, and provided
moderators with strong substantive knowledge for the panels. At the
end of the Forum, the ADB's Treasury Office offered to use its
technical assistance funds to organize annual APDM Forums (in
collaboration with a rotating country host) and develop a website to
support the APDM Network for the next three years. The ADB will
invite (and can financially support, if needed) all of its borrowing
members and also will invite non-borrowing ADB members, such as

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Japan and Korea, as resource people, so as to ensure that the Asian
countries with more developed debt markets continue to participate
in the Network. The ADB said it will continue to work with the IMF
to provide substantive expertise for future Forums and other Network
events.

JOHN