Accra (Greater Accra), 11 Jan. '99-

The World Trade Organisation (WTO) has identified the liberalisation of Ghana's financial market as one of the major take-off points of the country's economy.

In a study made available to the Ghana News Agency in Accra today, the WTO said the greatest benefits came from allowing foreign institutions to establish local commercial presence rather than just supplying a limited number of services from abroad.

The study, based on an analysis of 27 developing economies including Morocco, Argentina, Czech Republic, Slovakia and Hungary looked at each country's commitment to the financial services agreements, which are due to take off this year.

It also discussed how far foreign commercial presence has been allowed to enjoy the most stable foreign direct and portfolio investment flows.

However, the study noted that, policies that restricted international competition to the supply of financial services across board increased the risk of financial instability by encouraging foreign institutions to focus on short-term business, which relies heavily on foreign financing.

The findings of the study challenged conventional wisdom in some troubled developing countries, where recent turbulence has induced caution towards further financial services liberalisation and in the case of Malaysia, has led to the re-introduction of capital controls.

Developing countries with policies likely to produce financial volatility include Indonesia, Korea, Poland, Romania, Brazil and Venezuela.