The finance ministers of the Association of Southeast Asian
Nations (ASEAN) as well as China, Japan and South Korea (ASEAN+3)
concluded their 10th meeting on Saturday afternoon in Kyoto, vowing
to further deepen financial cooperation.
The finance ministers unanimously agreed in principle to build
up a self-managed reserve pooling arrangement governed by a single
contractual agreement with a step-by-step approach to better
protect the fast-growing Asian economy from possible currency
upheavals.
The ministers regarded the prospective arrangement as an
appropriate form of multilateralization of the Chiang Mai
Initiative (CMI), which now governs only bilateral currency swaps,
and recognized the consensus reached as a significant achievement
towards an advanced framework of regional liquidity support
mechanism, according to a joint statement released after the
meeting.
The CMI, introduced in 2000, is aimed at preventing a recurrence
of the 1997-1998 Asian financial crisis. Under the initiative,
central banks from participating countries are allowed to swap
foreign exchange reserves to fight speculative attacks on their
currencies.
"The expression of willingness to set up the reserve pooling is
a tangible progress achieved after a series of negotiations over
the CMI multilateralization, which was brought forward at last
year's meeting in Hyderabad, India, and is a positive result of the
10th meeting," said Chinese Finance Minister Jin Renqing in a joint
interview with Chinese media.
While describing the new plan as a development of regional
financial cooperation, Jin mentioned that further discussions on
issues such as scale, allocation, supervision, management and
operational institution of the prospective reserve pooling are
necessary.
"We have instructed the Deputies to carry out in-depth studies
on key elements, and all of us have been positive on these
efforts," Jin said, adding that "a much clearer scheme" may be
produced during the ASEAN+3 summit meeting later this year.
According to the statement, the ministers reiterated their
commitment to maintain the two core objectives of the CMI, in
specific to address short-term liquidity difficulties in the region
and to supplement the existing international financial
arrangements.
The ministers were pleased to see that the Bilateral Swap
Arrangement (BSA) network has increased to US$80 billion,
consisting of 16 BSAs among eight countries, said the
statement.
The 13 ministers also reiterated their commitment to accelerate
and deepen structural reforms and implement appropriate
macro-economic policies including domestic demand-driven measures
to strengthen the region's resilience and to support its
sustainable economic growth in the context of the increased
globalization of economies.
In general, the ministers said they welcomed continued strong
growth of the regional economy, whose outlook for 2007 remains
favorable.
While being optimistic about a "broadly supportive external
environment" for the regional economic expansion in coming years,
they warned that challenges posed by main downside risk factors,
including possible spillover effects from potential slowdown in
major world economies, large global imbalances, greater financial
market volatilities and a recurrent rise in oil prices are still
visible.
The meeting was held in the Japanese ancient capital on the
sidelines of the four-day annual meeting of the Asian Development
Bank (ADB) started Friday. The finance ministers agreed to meet in
Madrid, Spain, in 2008.
(Xinhua News Agency May 7, 2007)
