1. We, the ASEAN Finance Ministers, convened our 11th ASEAN Finance Ministers’ Meeting (AFMM) in Chiang Mai on 4-5 April 2007 under the Chairmanship of H.E. Dr. Chalongphob Sussangkarn, Minister of Finance of the Kingdom of Thailand.
2. We welcomed the participation of the troika of Central Bank
Governors (comprising past, present and future Chairs of ASEAN Central Bank Governors Meeting) and their assessment of the recent economic and monetary developments as well as their inputs on ASEAN finance cooperation.
3. We exchanged views on global and regional economic developments and discussed progress in the implementation of the Roadmap for Financial and Monetary Integration of ASEAN and other regional initiatives. We also explored how finance cooperation could further contribute to the realisation of the ASEAN Economic Community (AEC) by 2015.
Recent Economic Developments
4. We are pleased to note the robust economic performance in our region, reflecting sound underlying economic fundamentals, prudent macroeconomic management and ongoing structural reforms. Exports remained the main driver of growth, contributing to a regional GDP growth of 5.8 percent in 2006. More importantly, growth has become more balanced between external and domestic demand. In addition, our strengthened financial system continued to exhibit greater resilience, which, in part, is reflective of our significant efforts to further deepen the financial markets in the region.
5. We also discussed the external challenges to the region arising from the global imbalances and volatile capital flows. We resolved to remain vigilant to these risks and to maintain sound fiscal and monetary policies, while continuing to implement policies that will sustain domestic demand as an important anchor of growth.
6. We had a fruitful dialogue with the ADB President, Mr. Haruhiko Kuroda, following his presentation on economic outlook and policy issues for the ASEAN region. We appreciate ADB’s continued support for the ASEAN economic integration.
ASEAN Economic Community
7. Over the last ten years of the AFMM, we have strengthened regional financial resilience and stability by deepening regional capital markets and facilitating progressive liberalisation of our financial services sector. Going forward, we agreed that financial cooperation would be to serve to achieve a highly competitive region and equitable development in ASEAN. We therefore agreed to task the Senior Officials to review and identify the key financial sector tracks that could be accelerated to serve the above objectives. We also stressed the importance of capacity building in the financial sector towards narrowing the development gaps among the ASEAN member countries.
Strengthening Capital Market
8. We noted the progress made in capital market development. We agreed to establish an ASEAN bond portal that will provide a centralized platform containing information on ASEAN’s bond markets. This will be the first step towards facilitating deeper bond market linkages, as more ASEAN bond markets adopt e-bond trading platforms. In this light, Thailand and Singapore agreed to move ahead with bilateral cooperation on establishing an electronic bond trading linkage between our two bond trading platforms.
9. We agreed to strengthen our dialogue mechanisms with the key market participants operating in ASEAN capital market. This will enable us to keep abreast of capital market developments, and ensure that our markets remain responsive to the needs of issuers, investors and financial intermediaries.
Reinforcing Financial Services Liberalisation
10. We reiterated our commitment to facilitate intra-regional trade and investment by progressively opening up our financial services sector to one another. To this end, we are committed to conclude the fourth round of negotiations under the ASEAN Framework Agreement on Services (AFAS) by the end of 2007. We also tasked our Working Committee to facilitate financial services negotiations with our Dialogue Partners, including China, Korea, Australia and New Zealand.
Enhancing Infrastructure Financing
11. Recognising that infrastructure investment would accelerate regional growth and integration, we believe that establishing a new infrastructure financing mechanism would help attain this goal by mobilising regional savings and international capital for regional development and to increase intra-regional flows of investment and services. To promote greater and competitive levels of investments in ASEAN infrastructure projects, we agreed to set up a Task Force to work out the details of establishing a new infrastructure financing mechanism.
Promoting ASEAN as an Asset Class
12. Following the success of the previous ASEAN Finance Ministers’ Investor Seminars, we agreed to organize the Fourth Investor Seminar in Washington DC in October 2007, to further enhance the profile of ASEAN as an attractive investment destination.
Cooperation in Taxation
13. We agreed to strengthen cooperation on taxation under the AFMM to accelerate the completion of bilateral agreements on avoidance of double taxation and cooperation in other tax matters. We agreed to establish a forum on ASEAN Cooperation in Taxation to be represented by Heads of ASEAN Tax Administration Units.
14. We expressed our appreciation to the Government and people of the Kingdom of Thailand for their excellent arrangements and warm hospitality accorded to all delegates. The 12th AFMM will be held in Danang, Viet Nam tentatively on the first week of April 2008.