Mon, 07 Jul 2003

Asia, EU ministers to boost partnership

Dadan Wijaksana, The Jakarta Post, Nusa Dua, Bali

The fifth Asia-Europe finance ministers meeting concluded on Sunday with participants endorsing the Bali Initiative, aimed at strengthening the partnership for growth and development between the two regions.

Under the Bali Initiative, countries in the ASEM (the Asia- Europe Meeting) will boost cooperation among the fiscal and financial authorities of both regions through programs such as internships, staff exchanges, provision of scholarships, training and others.

Well-trained public officials are "critical elements" in a sound fiscal and financial system, the ministerial statement said.

Indonesia had proposed the initiative as a way to prevent a repeat of the financial crisis that hit most Asian countries in the late 1990s. Some blamed it on the absence of a sound early warning system in the countries.

The finance ministers agreed to use the ASEM Trust Fund II to support the program's financing, Indonesian Minister of Finance Boediono said.

"No figures as yet. But I'm guessing the amount will not be much different from what we received under the ASEM Trust Fund I," Boediono told reporters after the meeting ended.

Indonesia received around US$7.5 million from the ASEM Trust Fund l after it was badly hit by the economic crisis. Thailand and Malaysia received similar amounts.

The trust fund was established to provide financial support to countries in need in the two regions, as well as other purposes deemed beneficial to strengthening relationships among countries in Asia and Europe.

Ministers gathered at the two-day meeting painted an upbeat picture of global economic development.

"Although growth among developed countries remains subdued and the world economy continues to face short-term uncertainties and challenges, ministers expressed confidence that growth would accelerate up in near future," the ministers said in a closing statement.

Ministers remained committed to global efforts to accelerate development, to achieve the global poverty-eradication program called Millennium Development Goals, to reduce the proportion of people living on $1 per day from 29 percent in 1990 to 14.5 percent in 2015.

Jemal-ud din Kassum, the World Bank vice president for Asia and the Pacific, said during the ministerial meeting that East Asian countries were on track to meet their Millennium Development Goals despite the setback suffered in the economic crisis.

The meeting also reaffirmed strong commitments to the fight against money laundering and combating the financing of terrorism.

With regards to money laundering, the ministers welcomed plans by Germany and Malaysia to co-sponsor a symposium in Germany this October on fighting underground banking in Asia and Europe.

Another important issue discussed during the meeting was the planned creation of the Asian Bond Market.

"The ministers stressed the importance of fostering a bond market denominated in local currencies, as it could enhance mobilization of savings for long-term investments in the region," the statement said.

Asia has planned to create $1 billion worth of Asian Bond Fund, to be used to buy out bonds issued by countries in the region. The first batch of the fund was launched two weeks ago by 11 Asia-Pacific nations, including Indonesia.

The ministers described the Thai-initiated bond fund as "catalytic" in stimulating the region's capital markets.

The Bali meeting was attended by 10 ASEM Asian member states, 14 European countries, the European Commission, the European Central Bank, and three international financial institutions: The World Bank, Asian Development Bank (ADB) and the International Monetary Fund (IMF).

The Asian countries were: Indonesia, Brunei, China, Japan, Korea, Malaysia, the Philippines, Singapore, Thailand and Vietnam. The 14 European nations were: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden and the United Kingdom.

ASEM, which was first held in Thailand in 1996, is a biennial informal meeting of heads of state and governments of 10 Asian countries and 16 EU member states, including the president of the European Commission.

In order to facilitate cooperation in various fields, finance, economic and foreign ministers meet annually. The ASEM foreign ministers meeting will be held in Bali on July 23-24.