Foreword

Arthur M Mitchell
General Counsel
Asian Development Bank

For more than a decade, the Asian Development Bank (ADB) has been providing assistance to its developing member countries (DMCs) to create sound insolvency regimes designed to deal meaningfully with bad debts. One might ask why a regional development institution such as ADB, whose over-arching goal is poverty reduction, should be concerned with insolvency law reforms. Simply put, by ensuring that potentially profitable economic assets are not wasted, sound insolvency regimes contribute to wealth creation and are vital to sustained economic development, without which there can be no sustainable reduction in poverty.

Since 1997, there have been real and substantial reforms in insolvency laws in ADB’s DMCs. Some have called it the ‘insolvency revolution’. Yet, while the Asia-Pacific region has seen dramatic law reforms, there remains an ‘implementation gap’, or a difference between the laws on the books, and law in practice. Good insolvency laws are important. But even more essential is their effective implementation. Parties must come to believe that adherence to the rule of law will enhance wealth creation and lead to more rapid economic development. We can all name countries that have well-established legal systems based on principles that, in theory, meet international standards in some respects. In practice, however, corruption, excessive bureaucracy and political interference may stymie the legal systems in these countries. Until the ‘implementation gap’ is narrowed, reforms in insolvency laws will not be fully implemented.

Meanwhile, the ‘implementation gap’ creates pitfalls for the insolvency practitioner and stakeholder. In the ADB Guide to Restructuring 2001, ADB and White Page, in collaboration with PricewaterhouseCoopers and participating law firms, provided an all-in-one guide to the reality of the practice of insolvency laws in 11 Asia-Pacific jurisdictions. This year, ADB is pleased to join Globe White Page, PricewaterhouseCoopers and Morgan Stanley in introducing The Asia-Pacific Restructuring and Insolvency Guide 2003/2004, which similarly provides realistic and updated assessments of the insolvency regimes of 14 jurisdictions, explains the commercial context and attempts to answer basic Frequently Asked Questions on the processes affecting creditors and debtors in each jurisdiction. We have revised the format to address both the accounting and legal issues for each jurisdiction in the same chapter.

We hope this new publication will serve as your favoured reference book on Asia-Pacific insolvency and will contribute to the further development of restructuring and insolvency in the region.

© Asian Development Bank 2003