compared to our Asian neighbors like Malaysia and Thailand, we have a smaller savings-to-GDP ratio at 21 percent. Domestic savings onshore are channeled to productive output crucial to economic development like infrastructure projects. A sound capital market also improves the financial environment with the offer of alternative financial instruments.
At present, government papers dominate the local capital market with minimal alternative for other financial instruments. A marked difference with other countries where private debt issuance is far more significant. Also, the 1997 Asian financial crisis was a painful reminder of our vulnerability to external shocks due to our excessive dependence on the local banking system.