Taking a Step Forward - ADB Review

Taking a Step Forward
ADB Review [ August 2005 ]

On the sidelines of the Annual Meeting, ASEAN+3 ministers agreed on measures to strengthen financial cooperation, edging them closer toward enhanced Asian economic integration

By Graham Dwyer, (gdwyer@adb.org)
External Relations Specialist

The measures to strengthen financial cooperation announced by the Association of Southeast Asian Nations (ASEAN)+3 are a significant step forward toward East Asia’s economic integration, a senior Asian Development Bank (ADB) official said at the 38th Annual Meeting of ADB’s Board of Governors.

"The strengthening of the Chiang Mai Initiative and the enhancement of the ASEAN surveillance process will boost the resilience and economic growth of the region"

- Masahiro Kawai
ADB Economic Advisor

“The strengthening of the Chiang Mai Initiative (CMI) and the enhancement of the ASEAN surveillance process will boost the resilience and economic growth of the region,” said Masahiro Kawai, Economic Advisor to ADB President Haruhiko Kuroda. Mr. Kawai will head ADB’s newly created Office of Regional Economic Integration in October.

The Finance Ministers of the 13 ASEAN+3 countries expressed appreciation for ADB’s continued support as they announced their steps for strengthened financial cooperation in Istanbul.

“We thank ADB for its continued support for ASEAN+3 initiatives and welcome its new focus on regional economic integration,” the ministers said in a statement after the meeting, held on the sidelines of the ADB Annual Meeting in Istanbul.

The ASEAN+3 ministers agreed to strengthen the CMI, under which there are 16 bilateral swap arrangements totaling about $40 billion, into “a more effective and disciplined framework” by

integrating the CMI with an enhanced economic surveillance process for the ASEAN+3 countries;
adopting a collective activation and decision-making process on the current network of bilateral swap arrangements within ASEAN+3, as a first step toward multilateralization;
increasing the size of the available swaps by up to 100% while noting exact size could be flexibly decided by bilateral negotiations; and
doubling the size of the swaps that could be withdrawn without them coming under an International Monetary Fund program from 10% to 20%.

“Joint activation is one way to reduce problems of bilateral swap arrangements,” Mr. Kawai said. “The new arrangement is a first step toward multilateralism, under which all countries would pool resources.”

After the 1997 Asian financial crisis, ADB has been supporting ASEAN+3 initiatives such as the ASEAN+3 Informal Policy Dialogue Process, CMI, the Asian Bond Markets Initiative, and the ASEAN+3 Research Group.

President Kuroda told the ASEAN+3 ministers meeting that ADB stands ready to work with them and their governments in whatever way it can in their regional integration efforts.

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