I. Introduction
1. We, the Finance Ministers and Central
Bank Governors of ASEAN, China, Japan and Korea (ASEAN+3), convened our
16th meeting in Delhi, India, under the co-chairmanship of H.E. Pehin
Dato Abd Rahman Ibrahim, Minister of Finance II at the Prime Minister’s
Office of Brunei Darussalam, and H.E. Zhu Guangyao, Vice Minister of
Finance of the People’s Republic of China. The President of the Asian
Development Bank (ADB), the Director of ASEAN+3 Macroeconomic Research
Office (AMRO) and the Deputy Secretary General of ASEAN were also
present at our meeting.
2. We exchanged views on the recent
global and regional economic developments and policy responses. We
reviewed the progress of regional financial cooperation achieved since
our last Meeting, including the Chiang Mai Initiative
Multilateralisation (CMIM), AMRO, the Asian Bond Markets Initiative
(ABMI), the ASEAN+3 Research Group (RG), and Future Priorities. We also
discussed measures to further strengthen our regional financial
cooperation in the future.
3. We are pleased to announce that we
have finalized the amendment of the CMIM Agreement, reached consensus on
the draft Agreement to transform AMRO to an international organization,
and endorsed the work plan to implement the ABMI New Roadmap+. These
achievements will be a significant step forward in our efforts to
strengthen the regional financial safety net and contribute to
sustainable economic growth and integration in the region.
II. Recent Economic and Financial Developments in the Region
4. We are pleased to note that, despite
uncertainties in the global economy and financial markets, the ASEAN+3
region posted steady growth last year and is poised to sustain this
momentum in 2013. Resilience of the regional economy has been
underpinned by robust domestic demand, effective financial
intermediation by the healthy banking system, and appropriate
macroeconomic policies.
5. Global economic and financial
conditions have been improving, but we recognize the remaining risks.
Policy uncertainty, private deleveraging, fiscal drag and impaired
credit intermediation continue to weigh on global growth prospects. We
are also well aware that continuing global liquidity infusion could
potentially induce excessive risk taking and leverage, credit expansion,
and asset bubble. We shall remain vigilant on the unintended negative
side effects stemming from extended periods of global monetary easing on
the region as well as on the risk-on, risk-off sentiment in global
financial markets that could amplify volatility in capital flows and
adversely affect regional financial stability. We agree that monetary
policy should remain oriented towards domestic purposes, namely domestic
price stability, continuing to support economic recovery and securing
financial stability according to the respective mandates of central
banks.
6. Under these circumstances, we are
strongly committed to enhancing our efforts to respond to such risks by
making the necessary macroeconomic policy adjustments and where
appropriate, adopting macro-prudential policies, and by further
strengthening financial cooperation in the region.
III. Strengthening Regional Financial Cooperation
[Chiang Mai Initiative Multilateralisation (CMIM)]
7. We appreciated the work done by our
Deputies to amend the CMIM Agreement to reflect the measures to
strengthen the CMIM as agreed in May 2012. In this connection, the
Finance Ministers welcomed the Central Bank Governors’ involvement in
the fundamental decision making process of the CMIM. At the same time,
we remain committed to ensuring that the CMIM is operationally ready,
and we instructed the Deputies to continue work on the necessary
revisions of the current CMIM Operational Guidelines by the next ASEAN+3
Finance Ministers and Central Bank Governors' Meeting in 2014.
8. We welcomed the work of our Deputies
and AMRO to develop the “Economic Review and Policy Dialogue (ERPD)
Matrix”. The matrix will consist of economic indicators of all ASEAN+3
members and will facilitate the assessment of members’ qualification for
the CMIM’s crisis prevention facility. We instructed the Deputies and
AMRO to continue work on the ERPD Matrix for the smooth implementation
of the CMIM should the need arise.
9. We reaffirmed our commitment to
further strengthening the CMIM as part of the regional financial safety
net. Recognizing that enhancing the use of local currencies for
settlement in trade, investment and capital transactions, and reducing
the volatility of capital flows in and out of the region would help
mitigate the impacts of external risks, we endorsed further studies on
“Ways to Improve the Use of Local Currencies under the CMIM” and “Joint
Response to the Capital Flows at the ASEAN+3 Level”. We instructed the
Deputies to consider ways to seek an effective cooperative relationship
with the International Monetary Fund (IMF) and other multilateral
financial institutions in the areas of surveillance, liquidity support
arrangement and capacity development.
[ASEAN+3 Macroeconomic Research Office (AMRO)]
10. We were pleased with the solid
progress of AMRO as an independent regional surveillance unit since its
establishment in 2011, particularly in conducting regional economic
surveillance and contributing to effective decision-making of the CMIM.
We encouraged AMRO to continuously find ways to properly, and in a
timely manner, identify risks and challenges facing the region. We are
committed to enhancing the organizational capacity of AMRO.
11. To further consolidate our endeavor,
we agreed to transform AMRO to an international organization. This
marks an important milestone in our joint efforts to enhance the
effectiveness of our ASEAN+3 financial cooperation. We have reached
consensus on the draft of “AMRO Agreement” and will proceed with the
necessary domestic processes as early as possible for its prompt
signature and entry into force. This would enable AMRO to conduct
objective surveillance as a credible, independent international
organization, contributing further to the regional financial stability
along with the strengthened CMIM.
12. We also encouraged AMRO to further
enhance cooperation with relevant multilateral and regional financial
institutions including the Asian Development Bank (ADB), the IMF, and
the Bank for International Settlements (BIS) particularly in areas which
will be able to bolster institutional capacity of AMRO.
13. We welcomed the conclusion of the
Host Country Memorandum of Understanding (MOU) between Singapore and
AMRO, and expressed our appreciation to Singapore for its firm
commitment to provide AMRO with the necessary host country support. We
also welcomed the finalization of the text of the Headquarters Agreement
(HQA) between Singapore and AMRO concurrently with the AMRO Agreement,
which would be concluded once AMRO is reconstituted as an international
organization.
[Asian Bond Markets Initiative (ABMI)]
14. We acknowledged the continuous
progress under the ABMI in promoting issuance and facilitating demand of
local currency denominated bonds, as well as improving the regulatory
framework and related infrastructure for the regional bond markets.
Against the backdrop of heightened volatility in the global financial
market, our efforts under the ABMI to develop efficient and liquid
regional bond markets will help alleviate volatilities and contribute to
the economic and financial stability in our region.
15. We welcomed the inauguration of the
guarantee transaction of the Credit Guarantee and Investment Facility
(CGIF), and expect the CGIF to seek more opportunities to provide
guarantee to viable bond issuances in the region. We took note of the
ASEAN+3 Bond Market Forum (ABMF) second phase study report and look
forward to further discussion on the remaining key issues. We stressed
the importance of new public-private round table discussions among
market participants, the regulators and policy makers. We welcomed the
completion of the business feasibility reassessment for the
establishment of the Regional Settlement Intermediary (RSI). We agreed
to set up a Cross-border Settlement Infrastructure Forum, which will be
based on the voluntary participation of member countries, to discuss
detailed work plans and related process for the improvement of the
cross-border settlement in the region including the possibility of
establishing the RSI. As part of the effort to strengthen the region’s
credit rating capacity, we endorsed further study based on the findings
of the Research Group. We also welcomed the completion of the current
phase of technical assistance programmes for Indonesia, Lao PDR, Myanmar
and Vietnam and note the progress of the technical assistance programme
for the Philippines under the Technical Assistance Coordination Team
(TACT).
16. We endorsed the work plan prepared
by the ABMI Taskforces with the guidance of Deputies for the
implementation of the ABMI New Roadmap+ with nine priorities adopted in
May 2012. We expect the Taskforces to diligently carry out the work
plan, with the support from the ADB, to achieve more tangible outcomes.
17. Furthermore, we recognized the great
potential of the ABMI in developing debt instruments and fostering bond
investment to help channel the substantial savings into infrastructure
development in the region. In this regard, we endorsed an initiative on
“Fostering Infrastructure Financing Bonds Development”, which aims to
promote both issuance and demand of infrastructure financing bonds. We
expect the ABMI Taskforces to develop the detailed work plans while
encouraging private sectors’ involvement and taking into account current
efforts of the region to improve synergies.
18. We note that the Asian Bond Fund
(ABF) under the Executives’ Meeting of East Asia Pacific Central Banks
(EMEAP) has contributed to increasing the demand for the regional bond
market. We advised the Deputies to consider what additional types of
investment tools would further accelerate the development of the
regional bond market.
[ASEAN+3 Research Group (RG)]
19. We appreciated the efforts and noted
the findings made by the Research Group on the study for 2012/2013 on
“The International Discussions on the Credit Rating Agencies and
Enhancing Infrastructure to Strengthen the Regional Credit Rating
Capacity in the ASEAN+3 Region”. We endorsed two new study topics for
the 2013/2014 Research Group activities as follows: i) The Policy
Recommendations for the Expansion of the Securitization Market in the
ASEAN+3 Countries; and ii) SWOT Analysis on the Capital Market
Infrastructures in the ASEAN+3 Member Countries and its Implications.
[Future Priorities of ASEAN+3 Financial Cooperation]
20. We welcomed the progress of the
second phase studies on each of the three possible areas for ASEAN+3
financial cooperation: i) infrastructure financing, ii) disaster risk
insurance, and iii) using local currencies for the regional trade
settlement. We instructed the Deputies to continue in-depth studies,
with the continued support from the ADB and the World Bank, and put
forward policy recommendations that will contribute to the sustained and
inclusive growth and development of the region.
IV. Conclusion
21. We expressed our appreciation to the
governments of Brunei Darussalam and the People’s Republic of China for
their excellent arrangements as the co-chairs of the ASEAN+3 Finance
Ministers and Central Bank Governors’ Process in 2013. We also thanked
the government of India for its warm hospitality.
22. We agreed to meet in Astana,
Kazakhstan in 2014. Myanmar and Japan will be the co-chairs of the
ASEAN+3 Finance Ministers and Central Bank Governors’ Process in 2014.
