Ministers predict recovery soon
Published on: Monday, July 07, 2003
NUSA DUA (Indonesia): Asian and European finance ministers on Sunday forecast a pick-up in world economic growth soon as the fallout from war, terrorism and SARS eases.The ministers also agreed to step up cooperation, examine the role of the euro, develop Asian bond markets and increase the role of regional financial institutions.In a closing statement after a two-day gathering of finance ministers from ASEM (the Asia Europe Meeting), they also reaffirmed their commitment to combat money-laundering and terrorism financing.
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ASEM’s Asian members are Brunei, China, Indonesia, Japan, South Korea, Malaysia, the Philippines, Singapore, Thailand and Vietnam, while the 15 European Union members make up the other side of the grouping.“Though growth among the developed countries remains subdued and the world economy continues to face short-term uncertainties and challenges, ministers expressed confidence that growth would accelerate in the near future, in part as a result of the dissipation of some of the geopolitical uncertainties,” the statement said.It did not mention the potentially deflationary impact of a weak dollar on the European economies, although delegates on Saturday told AFP there is a general acceptance by EU members that the dollar must weaken further to shrink the gaping US trade deficit.Nor did it touch on ways to ensure currency stability in Asia despite calls for China to unleash its tight control on the yuan and for countries such as Thailand and the Philippines to let their currencies rise further to better reflect market forces.
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“In particular, ministers emphasised the importance of strengthening cooperation among ASEM partners in order to maintain the momentum of the world economic growth,” the statement said.Reading the statement at a press conference, Indonesian Finance Minister Budiono said this cooperation includes examining the role of the euro and drawing on Europe’s experience in moving towards an integrated financial system.
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The ministers agreed to work together to strengthen Asia’s bond markets and ease dependence on short-term bank loans.“Ministers emphasised the importance of fostering bond markets denominated in local currencies that will enhance mobilisation of savings for long-term investments in Asia,” the statement said.The launch of the Asian Bond Fund by 11 Asian economies would “play a catalytic role in increasing Asian capital market activity”.Thai Premier Thaksin Shinawatra last month announced the launch of the fund.Acknowledging that well-trained staff are a “critical element” in a sound financial system, ASEM members agreed to investigate ways to improve training of public finance officials through internships, exchange programs, scholarships and training, under a “Bali Initiative” proposed by Indonesia.Ministers also welcomed the 40 recommendations of the Financial Action Task Force which tackle money-laundering, urging prompt compliance.Noting the “increased reliance of terrorists and money-launderers on informal channels and opaque patterns of financing”, ministers welcomed a German and Malaysian initiative to co-host a symposium later this year on fighting underground banking in Asia and Europe.They reaffirmed their commitment to reduce poverty and achieve the Millennium Development Goals. Ministers of creditor countries reaffirmed their pledge to give debt relief to poorer partners under the Heavily Indebted Poor Countries initiative.Stay up-to-date by following Daily Express’s Telegram channel.
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