ASEAN finance ministers pledge to intensify cooperation

PHNOM PENH, March 30 (Xinhua) -- The 16th ASEAN finance ministers' meeting wrapped up here on Friday with an agreement to intensify economic and financial cooperation for realizing the ASEAN Economic Community by 2015, said a joint statement released after the meeting.

"The ASEAN finance ministers together with the troika of ASEAN central bank governors of Indonesia, Cambodia, and Brunei reaffirmed our commitment to maintain growth and development momentum and financial stability of the region in the face of difficult global challenges," said the statement.

It added the ministers exchanged views with the Asian Development Bank, World Bank, and International Monetary Fund on policies to maintain stability in the current environment and called on them to continue to pursue innovative projects and assistance to better serve the needs of the ASEAN economies.

ADB President Kuroda To Address Asean Finance Ministers In Cambodia

MANILA, March 29 (Bernama) -- Asian Development Bank (ADB) President Haruhiko Kuroda will travel to Phnom Penh to address the 16th gathering of the Association of Southeast Asian Nations (ASEAN) Finance Ministers Meeting on Friday.

Kuroda will brief the ministers on current ASEAN and global economic issues, the Manila-based ADB said in a statement here.

During his visit, Kuroda will also meet with the Cambodian Prime Minister Hun Sen as well as finance ministers from the region.

ASEAN finance, central bank deputies meeting kicks off in Cambodia

PHNOM PENH, March 27 (Xinhua) -- The ASEAN finance and central bank deputies meeting kicked off here on Tuesday in order to update financial cooperation toward an ASEAN Economic Community by 2015, according to a press release of Cambodia's Ministry of Economy and Finance.

The meeting would focus discussion on financial cooperation in the ASEAN framework in order to continue expediting financial integration toward the establishment of ASEAN Economic Community in 2015, it said.

It would review the progress of the Roadmap for Monetary and Financial Integration of ASEAN including Capital Market Development, Financial Services Liberalization, Capital Account Liberalization, and ASEAN Capital Market Forum.

ASEAN+3 to cushion financial meltdown

Mon, 02/23/2009
Rendi A. Witular
THE JAKARTA POST
PHUKET, THAILAND

Finance ministers of Southeast Asian nations, as well as Japan, China and South Korea, agreed Sunday on steps to prevent the region falling into financial meltdown.

In its joint statement after a meeting in the Thai resort island of Phuket, the ASEAN+3 countries agreed to prepare the precautionary measures by expanding their cooperation fund to US$120 billion from $84 billion worth of foreign exchange reserves under the Chiang Mai Initiative framework signed in 2000.

Japan, China and South Korea will supply 80 percent of the fund, and ASEAN members the remaining 20 percent. Details on the contribution of each countries are still undecided.

“The immediate effect of the agreement is that there will be a positive signal to the financial market in which we reassure them that we have sufficient backup and ammunition to face possible financial turmoil,” said Indonesian Finance Minister Sri Mulyani Indrawati.

She added that ASEAN+3 had noted that while Asian economies were in a better position to face challenges, due to the structural reforms undertaken since the Asian financial crisis, it recognized the regional economy was now facing great challenges.

“The current severe economic downturn of the global economy, coupled with heightened risk aversion in financial markets, has adversely affected the region,” Mulyani said.

ASEAN+3 includes the 10 member states of ASEAN — the Philippines, Indonesia, Thailand, Malaysia, Singapore, Brunei, Vietnam, Myanmar, Cambodia and Laos — and the three East Asian nations of Japan, China and South Korea.

The group has a total population of 2 billion people, a combined GDP of $9.09 billion, and foreign reserves of $3.6 trillion. Effectively, ASEAN+3 represents one-third of the world’s population, 16 percent of the world’s GDP, and holds more than half of the world’s reserves.

As the first concrete joint action in Asia to cope with the global economic downturn, the foreign exchange reserve pool is accessible to members in a swap mechanism to boost their foreign exchange reserves and to address short-term liquidity problems.

Members in dire need of the foreign exchange reserve fund, however, will be subject to an independent surveillance mechanism by other members.

A surveillance by member countries is preferred because most of the ASEAN+3 nations have suffered a traumatic experience from tapping financial support from the International Monetary Fund (IMF), which is regularly tied with seemingly unfavorable and ineffective terms and condition.

After the surveillance mechanism takes full effect in its function, members can use more of the fund without having to worry about being put under IMF supervision.

Under existing rules, members withdrawing the fund by more than 20 percent of their real need are required to have IMF supervision.

ASEAN+3 is still working on expanding the 20 percent tolerance level to enable members to get more funds but still remain under the surveillance of other members.

The group will also speed up measures to better manage the region's bond market by accelerating the completion of the Asian Bond Markets Initiative (ABMI) road map.

Asian finance ministers to broaden regional liquidity fund

22 Feb 2009
IANS (India)

PHUKET: Finance ministers from Japan, China, South Korea and across South East Asia agreed on Sunday to broaden and increase a regional liquidity fund, in the wake of the global financial crisis.

The three, plus the ten members of the Association of South East Asian Nations (ASEAN) penned an agreement at a summit in Phuket, Thailand, to "multilateralise" the Chiang Mai Initiative (CMI) fund, and to increase it to $120 billion.

Until now the CMI has taken the form of multiple bilateral agreements on currency swapping.

Meeting at Thailand's premier vacation island, 550 km south of Bangkok, the finance ministers also agreed to beef up the regional surveillance mechanism for the CMI, by setting up an independent regional watchdog in conjunction with the International Monetary Fund.

How long it will take to implement the multilateralisation is not clear.

Thai Finance Minister Korn Chatinkavanij, who co-chaired the Phuket meeting with his South Korean counterpart Jeung Hyun Yoon, pointed out after the meeting that the various countries have differing approval processes.

"But we expect the approval schedules to be discussed in the next meeting in Bali (in May)," he added.

Until the surveillance mechanism is in place and all countries have approved the multilateralisation, the current bilateral system will remain in place.

It was also agreed at the meeting that the ASEAN countries - Thailand, the Philippines, Singapore, Malaysia, Vietnam, Myanmar, Laos, Cambodia, Indonesia and Brunei - will put up 20 percent of the $120 billion fund, with the remaining 80 percent being contributed by China, Japan and South Korea.

The country-by-country breakdown has not yet been finalised, said China's Finance Minister Xuren Xie said.

"We have a good idea of the splits, both among the ASEAN countries and among the plus-3 countries," Korn noted.

When asked whether the absence of the new Japanese Finance Minister, after the recent resignation of his predecessor in an alleged drunkenness scandal, had had any effect on the talks, Korn said, "As far as we were concerned, the Japanese government was represented," he replied. "There was no negative impact whatsoever."

The ministers also made a strong plea for Western countries not to increase protectionist trade barriers in a bid to shield their domestic industries, and to stabilise their own economies and financial markets.

"Free and fair trade must be maintained," Korn said, not only within Asia but globally.

He also called for the development in Asia of "relevant policies for the development of domestic economies in order to counter the effects of reductions in exports."

The ministers, in their joint statement at the end of the conference, noted the importance of the Asian Bond Markets Initiative (ABMI) and hinted at relaxation of international currency regulations: "We recognise the important role of the private sector in the development of bond markets, particularly in cross-border bond transactions and settlement issues. We will explore ideas for new arrangements that would provide development assistance to the region while addressing unexpected liquidity constraints."

Finally, the ministers called for "an immediate and substantial capital increase" for the Asian Development Bank, calling for agreement on this before the next annual meeting of the ADB, in three months' time.

Asian finance ministers meet on economic crisis

Sunday, February 22, 2009

PHUKET, Thailand (AFP) — Finance ministers and top officials from Southeast Asia, China, Japan and South Korea met here on Sunday to discuss how the region can soften the blow from the global financial crisis.

Topping the agenda is a proposed multi-billion-dollar credit line to help Association of Southeast Asian Nations (ASEAN) countries cope with the crisis, which members want to see expanded from 80 to 120 billion dollars.

"The meeting will send a very strong signal to the world that we are committed to alleviating the global economic slowdown," Thai Finance Minister Korn Chatikavanij said at the meeting on the southern resort isle of Phuket.

"Finance ministers in all countries need to work to find the base and most effective solutions and measures to tackle and underlie uncertainty."

Ministers and officials from ASEAN's Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam are meeting with Chinese and South Korean finance ministers and a top Japanese official.

ASEAN Secretary General Surin Pitsuwan said the long-discussed regional fund would be used to help members "badly affected" as the global economic downturn hits Asia's key trading partners in the United States and Europe.

"It is one of the mechanisms -- it is not to replace or compete with the IMF (International Monetary Fund), but it will be an alternative for Asian countries," Surin said on Thai television.

"If it materialises, it will be one of ASEAN's most tangible achievements."

ASEAN members plus China, Japan and South Korea agreed after the 1997-98 Asian financial crisis to set up a bilateral currency swap scheme known as the Chiang Mai Initiative to prevent a repeat of the turmoil.

Asian nations now want to expand that agreement into a multilateral fund pool to help member nations as the current economic climate threatens millions of jobs as well as the recent robust growth in Asia's developing economies.

Asian nations had previously discussed an 80-billion-dollar emergency pool, but last year mooted expanding that figure to 120 billion dollars.

"Unfortunately our region is currently facing enormous challenges including global economic slowdown and ... financial turbulence," said South Korean Finance Minister Yoon Jeung-Hyun.

"The environment calls for stronger cooperation among the ASEAN countries ... I believe the Chiang Mai Initiative and its multilateralisation is a prime example of such regional collaboration efforts."

As the morning session came to a close, Surin told reporters that the meeting was "good and positive," and said all ministers agreed in principle to expand the fund.

He said ASEAN members would equally contribute to make up 20 percent of the pool, with the remaining 80 percent coming from the big three Asia economies.

"This idea will be submitted to the ASEAN summit in Hua Hin next week," Surin said.

Sunday's meeting comes ahead of ASEAN's annual summit starting on February 27, which current chair Thailand will host at the seaside resort town.