Collaborative Efforts on the Development of ASEAN’s Financial Market

The 18^th ASEAN Finance Ministers Meeting recently took place in Nay Pyi Taw, Myanmar, within the framework of ASEAN financial cooperation under the chair of Myanmar. Delegates participating in this event are the ASEAN Finance Ministers, the ASEAN Deputy Secretary General, Vice President of the Asian Development Bank (ADB), Chairman of the World Bank (WB), Deputy Managing Director of the International Monetary Fund (IMF), Chairman of the World Bank (WB), Director of the ASEAN +3 Macroeconomic Research Office (AMRO) and finance officials of member countries. Finance Minister Dinh Tien Dung led the delegation of the Vietnamese Ministry of Finance to attend the meeting.

 

The meeting discussed the regional and global economic development situation, progress of initiatives under the Roadmap for Monetary and Financial Integration of ASEAN towards realising the goals of the ASEAN Economic Community 2015 in three areas, namely capital market development; capital account liberalisation; financial services liberalisation; infrastructure financing; cooperation on customs, insurance and taxation; and agreed on ASEAN’s viewpoints on financial cooperative initiatives within ASEAN+3 framework.

 

In the meeting, delegates highly appreciated the growth rate in ASEAN countries in 2013, reaching 5.1 percent; the export growth recovered during the last six months despite the unsustainable global economy. The economy looked optimistic due to the increase of domestic demand derived from private consumption and infrastructure investment. The ASEAN countries, however, need to address external risks such as withdrawal, exchange rate fluctuations, rising inflation pressures and the tightening of financial conditions, which are likely to weaken the regional economic growth.

 

The ministers reaffirmed commitments to implement appropriate fiscal and monetary policies which would sustain economic growth and maintain financial market stability. Macroeconomic policies would continue to address the level of development of each country and country-specific issues. Ministers agreed to further strengthen domestic demand, pursue structural reforms, encourage private sector investment, and aim for equitable economic development throughout the region. They also committed to strengthening cooperation and integration efforts to improve Asean’s resilience against external threats.

Besides, the ministers acknowledged great efforts in the implementation of the Roadmap for monetary and financial integration of ASEAN and encouraged countries to intensify their efforts in the development of financial market integration to achieve the objectives of the ASEAN Economic Community in 2015. In the field of capital market development, the ministers believed that a strong capital market is the key factor to stabilise finance and to promote the capital flow distribution efficiently. They noted achievements in strengthening and building a long-term infrastructure for the development of ASEAN capital markets and the performance of initiatives of the ASEAN Capital Markets Development Forum in harmonisation and mutual recognition towards regulations on capital markets. Countries agreed to continue the efforts to deepen and integrate their capital markets to ensure that the flow of capital is geared towards productive sectors.

Regarding the financial services sector, attendees were delighted with the result of the 6^th negotiation round on finance services. The signing of the Protocol to implement the Sixth Package will take place in 2014 to start the Seventh Round of Negotiations thereafter. 

 

The Ministers recognised that the ASEAN Infrastructure Fund (AIF) is an integral component of ASEAN’s efforts to strengthen regional physical connectivity and narrow the infrastructure development gap in ASEAN. They also welcomed AIF’s first project in Indonesia last year and looked forward to new projects in Indonesia, Laos and Vietnam in 2014. The ministers wish Myanmar to join the fund in the upcoming time. Moreover, they appreciated the continued support from the ASEAN-World Bank Infrastructure Finance Network (IFN) and endorsed the programs for 2014.

In terms of customs and insurance cooperation, the ministers showed their pleasure with the progress of activities under customs cooperation, particularly the successful test of the ASEAN Single Window (ASW) Gateway connectivity by seven Member States, and the completion of the “scaled-down” version of Component 2 ASW pilot project, to be followed this year by the “full-fledged” pilot project. They encouraged customs officials to fully implement the outstanding initiatives, including the finalization of agreements and protocols, to support the establishment of a single market and production base under the AEC.