1. We, the ASEAN Finance Ministers, convened our 14th Annual Meeting under the chairmanship of H.E. Ninh Vu Van, Minister of Finance of the Socialist Republic of Viet Nam.
2. We met together with the troika of ASEAN Central Bank Governors at a critical juncture of our recovery from the global economic and financial crisis. We discussed the significant policy challenges that lie ahead and reaffirmed our commitment to restore sustainable economic growth and financial stability. We had a fruitful exchange of views with Haruhiko Kuroda, President of the Asian Development Bank; Juan Jose Daboub, Managing Director of World Bank; and Shinohara Naoyuki, Deputy Managing Director of the International Monetary Fund, and we called on them to continue to support stronger regional cooperation through initiatives and commitments that will contribute towards sustained recovery and balanced growth.
3. We assessed the progress of our commitments to the ASEAN Economic Community (AEC) by 2015, including the various initiatives under the Roadmap for Monetary and Financial Integration of ASEAN. To facilitate the integration of our financial markets, we agreed that further actions are needed. We are encouraged by significant progress made in strengthening the financial system and achieving financial stability in the region. In this regard, we welcomed the entry into force of the US$120 billion swap facility under the Chiang Mai Initiative Multilateralisation (CMIM), and we look forward to the establishment of the CMIM regional surveillance unit early next year. We affirmed our commitment to establish the Credit Guarantee and Investment Facility (CGIF) in May 2010 to deepen local currency bond markets in the region.
Regional Outlook and Challenges of Post-Crisis Economy
4. We are pleased that ASEAN has emerged in good shape despite the unprecedented crisis in the global economy, reflecting the region’s continued dynamism. Our economies have rebounded strongly due to the resilience of domestic demand, a robust financial system, sound economic frameworks, recovery in global trade and financial markets as well as swift and appropriate policy responses. These favourable conditions and pro-business policies have cushioned ASEAN economies from the impact of the external shocks and helped to re-attract investments quickly. We are confident that the region will grow between 4.9% and 5.6% in 2010 from 1.5% last year.
5. However, as the challenges to stronger global economic recovery remain, we are committed to act in a decisive, timely and coordinated manner to maintain the growth momentum and to achieve a stable, efficient and resilient financial system in the region. We will continue to pursue supportive policies until recovery is secured, but at the same time, we will carefully withdraw our fiscal, monetary and financial sector support once private demand becomes self-sustained. Our exit strategies will be guided by our respective economic fundamentals, consistent with the goals of medium-term fiscal sustainability, price stability, and financial stability.
6. We remain committed to implement policies that could restore strong and sustainable growth, including policies to further promote domestic demand and services, boosting productivity, and enhance the integration of our markets. We recognised that mutually reinforcing intra-regional trade and domestic and regional demand will play important roles in sustaining growth. To achieve this it is vital that we further step up public and private investment, including investment in infrastructure and education, and technological innovation.
Roadmap for Monetary and Financial Integration of ASEAN
7. We are determined to work together to enhance the competitiveness and depth of ASEAN 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.
8. We are pleased with the progress of the study to develop a clear framework and roadmap for achieving greater financial integration in ASEAN by 2015. We look forward to the development of specific recommendations and timelines towards this end.
Capital Market Development and Integration
9. Strong, efficient and liquid capital markets are important in attracting more investment to the region, facilitating greater inter-regional trade flows, and ensuring ASEAN’s long-term competitiveness. To further develop our bond markets, we endorsed the formation of a set of “bond market development” indicators, which will serve as benchmark reference points to measure the state of ASEAN’s bond market development, and as a scorecard to identify key priorities for bond market integration and development in ASEAN. Recognizing the varying levels of bond market development across the region, we agreed for targeted capacity building initiatives to collectively enhance liquidity and efficiency in our capital markets. At the same time, promoting ASEAN as an asset class remains an important task. We will therefore step up our investor outreach efforts to deepen and broaden the investor base in the region.
10. We have also made substantial progress in integrating our capital markets to enhance our competitiveness in the global arena. Work is underway to create brand recognition for ASEAN products, lift standards of regulations, build mutual and global trust in ASEAN standards through mutual recognition regimes, and facilitate flow and access into our markets. The “ASEAN and Plus Standards” for multi-jurisdictional offerings of securities have been adopted in Malaysia, Singapore and Thailand. We will promote dual listing of securities and cross-border offerings of debt securities and collective investment schemes. We are encouraged by the progress made towards the establishment of ASEAN exchange linkages. We welcome the initiative to develop mutual recognition framework for capital market professionals across the region. Through the tax authorities, we will explore ways to address withholding tax issues affecting regional capital market development.
Financial Services Liberalisation
11. We agreed to adopt a Safeguard Framework that will allow Member States to maintain pre-agreed flexibilities for financial services sub-sectors to be liberalised by 2015 as specified in the AEC Blueprint. We will use this Framework as the modality to guide the 5th Round of Negotiations on the ASEAN Financial Services Liberalisation under the ASEAN Framework Agreement on Services (AFAS). We took note that Member States had commenced the 5th round of negotiations towards the completion of negotiations by the end of this year. We will continue to engage with our Dialogue Partners on our negotiations on trade in services, and we will work toward a successful outcome of on-going trade in services negotiations of our Free Trade Agreements with China and India.
Capital Account Liberalisation
12. We are encouraged by the return of capital to the region, which has supported our improved economic and financial conditions. We are also cognizant of the risks involved and the need to manage large and volatile capital inflows by strengthening our monitoring system. In this regard, we reaffirmed our commitment to further capital account liberalisation. We are pleased with the conduct of our mutual assessment process and identification of rules to further promote foreign direct and portfolio investments.
Strengthening ASEAN Finance Cooperation and Economic Integration
Enhancing Regional Surveillance
13. The post-crisis global economy presents new challenges to the region. It is therefore critical that we continue to enhance our regional surveillance capacity to support regional economic and financial integration. To this end, we reiterated our support for the establishment of the Macroeconomic and Finance Surveillance Office (MFSO) at the ASEAN Secretariat.
14. We are committed to the full and timely establishment of the ASEAN+3 Macroeconomic Surveillance Office (AMRO), an independent regional surveillance unit to support the successful implementation of CMIM. We unanimously decided that AMRO would be located in Singapore, and to cooperate with our counterparts from China, Japan and South Korea to ensure this unit would be operational by early next year.
Infrastructure Financing
15. Following the Leaders’ Declaration on ASEAN Connectivity, we reaffirmed our commitment to infrastructure development to support the medium-term and long-term growth prospects of the region. To this end, we agreed to work closely with the ADB to work out an appropriate structure for the ASEAN Infrastructure Fund that could catalyse the necessary financing. We took note and appreciated continued support from the World Bank of the Infrastructure Finance Network (IFN). We also endorsed the proposed programmes offered by the World Bank under the IFN for 2010.
Insurance Cooperation
16. We are pleased with the progress of insurance cooperation and committed to further strengthen cooperation in the future.
Customs Integration
17. ASEAN customs integration has continued to advance with our signing of the Second Protocol to Amend the Protocol Governing the Implementation of the ASEAN Harmonised Tariff Nomenclature. We are pleased that almost all Member States have implemented the regional system of tariff nomenclature for uniform classification of traded goods that will facilitate regional trade and investment. We welcome the efforts in the simplification and streamlining of customs procedures to international standards through the implementation of the ASEAN Customs Declaration Document. We noted the progress in other customs issues, particularly the implementation of the Strategic Plan of Customs Development and ASEAN Single Window.
18. We also urged the ASEAN Customs Directors-General to expedite the work on amendments to the ASEAN Agreement on Customs and finalisation of Protocols 2 and 7 under the ASEAN Framework Agreement on Facilitation of Goods in Transit, accelerate the implementation of customs related measures in the AEC Blueprint and look into mutual recognition arrangement among customs authorities in ASEAN.
Engaging and Building a Stronger ASEAN
19. Building on the progress of our economic integration, our strategies will continue to be driven by greater policy collaboration and deeper economic engagement. In this regard, we welcome the proposal by Malaysia to host the 2010 ASEAN Finance Ministers’ Investors Seminar in Kuala Lumpur in the fourth quarter, to promote ASEAN as an asset class and to create greater cross-border investment opportunities.
20. We are pleased that Asia is leading the global economic recovery. We are committed to transform the recovery into a stable and sustainable growth for the region. We will work to maintain the momentum of our reforms and enhance the resiliency and stability of our financial system. We will continue to contribute to the shaping of the post-crisis global economic landscape, and to actively participate in international efforts to build a stronger global economy. To this end, we look forward to the chairmanship of Korea in this year’s G-20 Summit.
21. We also reaffirmed the importance of tapping on regional and international resources to support ASEAN growth and stability. We agreed that international financial institutions (IFIs) like the ADB, World Bank and IMF could play positive roles in advancing regional economic, financial, and trade integration goals. In particular, we agreed to explore possible ways to enhance synergies between regional initiatives such as the CMIM and IFI financing facilities.
22. We expressed our appreciation to the Government and people of the Socialist Republic of Viet Nam for their excellent arrangements and warm hospitality accorded to all delegates. The 15th AFMM will convene in 2011.