1. We, the ASEAN Finance Ministers, convened our 13th Annual Meeting in Pattaya on 8-9 April 2009, under the chairmanship of H.E. Korn Chatikavanij, Minister of Finance of the Kingdom of Thailand.
2. We welcomed the participation of the troika of Central Bank Governors from Thailand, Viet Nam and Brunei Darussalam representing the 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 ideas on ASEAN finance cooperation. We had fruitful exchange of views with Secretary General of ASEAN, Dr. Surin Pitsuwan, President of the Asian Development Bank, Mr. Haruhiko Kuroda and Vice-President for Asia-Pacific Region of the World Bank, Mr. James Adams.
3. We discussed the challenges faced by the region and our responses amid the current global financial crisis and agreed that the key priorities for ASEAN are to enhance regional financial stability and further integrate our financial markets to achieve the goals of the ASEAN Economic Community (AEC) by 2015. In line with these priorities, we discussed the progress made in the implementation of the Roadmap for Monetary and Financial Integration of ASEAN (RIA-Fin) and other regional initiatives such as the Chiang Mai Initiative Multilateralisation (CMIM) and the Asian Bond Markets Initiative (ABMI). On the CMIM, we underscored the importance and urgency of launching the CMIM and agreed to work closely with our Plus Three counterparts to resolve the remaining issues in order to finalize the multilateralised initiative in our next meeting in May 2009.
Recent Economic Developments
4. We are pleased to note that despite the unprecedented crisis in the global economy the ASEAN economies continued to grow by 5% last year. The positive but moderate economic growth was underpinned by resilient domestic demand, strong macroeconomic fundamentals, sound balance sheets of banks and the corporate sector, and on-going structural reforms since 1997. Nevertheless, we remained vigilant against downside risks such as further contraction of external demand, tighter global financing conditions and volatile global capital flows. We have implemented forceful monetary and fiscal measures needed to stabilize economic and financial conditions in the region.
5. Against this volatile financial environment and difficult economic condition, we are committed to act in a decisive, timely and coordinated manner to sustain market confidence and promote growth. We stand ready to pursue expansionary policies as long as needed while maintaining medium term fiscal sustainability. We also stand firm on our commitment against protectionism, and continue to support our free trade agenda.
Cooperation with International Partners
6. We welcomed the announcements and recommendations made by the G20 Leaders at the recently concluded G20 London Summit to restore credit, growth and jobs to further boost market confidence and to reinvigorate efforts for the conclusion of the Doha Round.
7. We recognized the efforts made by the ADB, WB and IMF to support the region and play a proactive role in overcoming the current global economic downturn. In particular, we welcomed:
- Recent initiatives to increase resources of IFIs, including the trebling of funds available to the IMF to US$750 billion as well as the general capital increase of 200% for the ADB;
- The increased commitments by the ADB and World Bank towards infrastructure, trade finance, and other needs in the region;
- Recent reforms in the IMF’s lending framework, including the introduction of the New Flexible Credit Line (FCL);
- The reforms underway at the IFIs in governance, voice and decision making processes.
8. We recognized the importance of tapping on regional and international resources to support ASEAN growth and stability. Going forward, we encouraged the ADB, WB and IMF to work in close partnership with each other, as well as to work collectively with ASEAN to advance regional economic, financial, and trade integration goals. This could include the regional initiatives leveraging on the IFIs.
Roadmap for Monetary and Financial Integration of ASEAN
9. Amid continued financial turbulence, we recognized the urgent need to further enhance financial resilience in the region through greater integration of our financial markets. The current global financial crisis presents a clear opportunity to promote further integration of our financial markets. To this end, we reaffirmed our commitment to financial integration under the AEC Blueprint, particularly in the areas of Capital Market Development, Financial Services Liberalisation and Capital Account Liberalisation. We agreed to work together to preserve what has been achieved so far and to expedite efforts to enhance the competitiveness and depth of ASEAN financial markets.
Capital Market Development
10. We will continue to broaden and deepen the regional capital markets through measures that enhance market access, liquidity and linkages and promote ASEAN as an asset class. We agreed that well-regulated and efficient capital markets are essential for effective allocation of regional savings that will strengthen the region’s resilience to external shocks. To foster cross-border financial flows and linkages, our immediate priority is to create an enabling environment and market infrastructure to facilitate cross border investments, strengthen institutional capacity in the markets, and maintain outward-oriented policies.
11. We endorsed the Implementation Plan to Promote the Development of Integrated Capital Market in ASEAN to achieve the objectives of AEC Blueprint by 2015. The Plan provides for a comprehensive approach at building an integrated regional capital market, with strategic initiatives and milestones, to strengthen financial intermediation, enhance capacity and manage risks to support national and regional growth. We believe the core strategies of the Plan, which include a mutual recognition and harmonisation framework of expanding scope and country coverage, supported by efforts to establish the trading and settlement alliances and infrastructure, and a strengthened coordination and monitoring processes at both regional and country levels, are essential components of our efforts to integrate our capital markets.
Financial Services Liberalisation
12. Recognising the different levels of financial services development and readiness among ASEAN countries, we agreed to undertake a Study on Assessing the Financial Landscape in ASEAN that will review and map the current financial sector regimes within ASEAN, identify the gaps and constraints that inhibit financial integration, and develop a comprehensive framework with specific recommendations and timelines for achieving the progressive liberalisation of financial services. At the same time, we shall formulate the pre-agreed flexibilities that will allow us to complete on time the 5th Round of Negotiations on the ASEAN Financial Services Liberalisation under the ASEAN Framework Agreement on Services (AFAS) by 2010. We welcomed the conclusion of the services negotiations including Finance in our Free Trade Agreements with Australia and New Zealand, and we will continue to engage other dialogue partners to ensure the increase of overall market access between ASEAN and our trading partners.
Capital Account Liberalisation
13. International capital flows are important for the efficient mobilisation and allocation of capital in the region in this highly integrated global economy. In this regard, we reaffirmed our commitment to capital account liberalisation. We resolved to take all necessary actions, including regional cooperative efforts, to manage and cope with sudden reversals and large volatilities in international capital flows.
Strengthening ASEAN Finance Cooperation and Economic Integration
ASEAN+3 Finance Cooperation
14. We are committed to reach an early conclusion on major components of the Chiang Mai Initiative Multilateralisation (CMIM) by our meeting with Plus Three Counterparts in Bali in May this year. In this regard, we are pleased to announce that individual contributions for ASEAN Member Countries have been finalised. We will closely collaborate with our Plus Three partners in finalizing the CMIM in May 2009 in Bali.
Enhancing Regional Surveillance
15. We are committed to further strengthening the surveillance capacity of the ASEAN Secretariat. In this regard, we welcomed the establishment of the Macroeconomic and Finance Surveillance Office (MFSO) and agreed to provide the necessary resources for its timely and effective operations.
Infrastructure Financing
16. We remain committed to creating a facilitative environment for infrastructure financing to strengthen the medium-term and long-term growth prospects of the region. Engaging the private sector and multilateral institutions to facilitate fund raising and mitigate risks will be pivotal to support higher levels of infrastructure development. As such, are pleased to announce the World Bank-ASEAN Partnership to establish the Infrastructure Finance Network as an important regional knowledge exchange platform to strengthen policy dialogue with a view to broadening approaches in mobilising financing for infrastructure, building capacity and establishing a credit culture in public sector infrastructure operations. We tasked our Deputies to explore ways to mobilise regional resources to finance infrastructure projects in the ASEAN region.
Cooperation in Customs Matters
17. We are pleased to note the continued progress in the implementation of the Strategic Plan of Customs Development and ASEAN Single Window, including the ASEAN Customs Declaration Document and the ASEAN Cargo Processing Model, design of the ASEAN Customs Transit System, and development of a new Customs Agreement that will enhance regulatory cooperation among customs administrations in the region. We encouraged Customs Administrations and relevant agencies to expedite the operationalisation of National Single Windows of Member States and ASEAN Single Window in line with commitments under the Agreement and Protocol to develop and implement the ASEAN Single Window.
Showcasing ASEAN
18. Recognising the importance of promoting ASEAN as an asset class, we agreed to participate at the ASEAN Investment Day to be held during the ADB Annual Meeting in Bali, Indonesia in May 2009. This event will feature investors’ seminars, regional-finance related seminars, and exhibitions.
ASEAN Economic Community
19. Given the global nature of the financial crisis, we recognised that managing the challenges is a joint responsibility. As such, we reaffirmed our commitment to maintain regional financial stability and strengthen financial integration and resolved to take all necessary actions to assist in bringing an end to the global crisis, including rejecting all forms of trade and financial protectionism. We agreed that the current crisis should not deter the progress that the region has made toward economic integration.
20. 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 14th AFMM will be held in Socialist Republic of Viet Nam in 2010.