Financial liberalization to top ASEAN meet
Financial liberalization to top ASEAN meet
Martin Abbugao, Agence France-Presse, Singapore
Southeast Asian finance ministers meeting here this week are expected to take stock of work done to liberalize the region's financial sector, seen as a cornerstone for an envisioned single ASEAN market, government sources said.
The review will come six months after the leaders of the Association of Southeast Asian Nations (ASEAN) agreed during their annual summit on a roadmap to achieve a European Union- style common market by 2020 or earlier.
Among the measures endorsed at the October meeting on the Indonesian island of Bali was a series of bold steps to develop, liberalize and integrate the region's capital markets and financial services.
Finance ministers drew up the measures during their annual meeting in Manila in August.
Singapore government sources involved in preparing this year's finance ministers' meeting, to be held on Tuesday and Wednesday, said the delegates were expected to "take stock" of work done since their last gathering in the Philippine capital.
"I don't think that you can expect any major breakthroughs. I don't think you're going to see any new initiatives that are going to come up," the official said.
Another official said discussions would look at progress on initiatives in four key areas, namely the development of capital markets, liberalization of financial services, the feasibility of an ASEAN common currency and liberalization of capital accounts.
These initiatives are aimed at bringing about a free flow of goods, services and investments as well as capital within ASEAN, which groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
Business executives say an integrated ASEAN market would do better to compete with China and a fast-rising India in terms of trade and attracting foreign investments.
A delegation from the U.S.-ASEAN Business Council, an American corporate lobby group, will also hold talks with the ministers.
Council sources said the delegation was expected to discuss the financing of small and medium enterprises and press the importance of financial services liberalization in free-trade agreements.
The finance chiefs will meet in an informal setting during a "retreat" on Tuesday ahead of their formal gathering on Wednesday.
On Monday, deputy finance ministers and central bank governors from ASEAN as well as China, Japan and South Korea will meet under the ASEAN Plus Three dialogue process.
Sources said a key topic at this meeting would be how to strengthen a mechanism called the Chiang Mai Initiative, which allows central banks from the 13 countries to swap foreign exchange reserves to fight speculative attacks on their currencies.
Bilateral swap arrangements, now totaling US$35 billion, have been signed under this scheme.
The initiative was launched in the northern Thai city of Chiang Mai in May 2000 as a response to speculative currency attacks that triggered the 1997/98 Asian financial crisis.
Any changes in the Chiang Mai accord are expected to be announced on May 15 after a meeting of the ASEAN Plus Three finance ministers in Jeju, South Korea, on the sides of the Asian Development Bank annual conference.
One ASEAN source said the ministers may also discuss improving exchange rate co-operation amid U.S. pressure on China to revalue the yuan against the dollar to reflect its supposed true value.
The United States, faced with a weakening dollar and a widening current account deficit, alleges the yuan rate is artificially suppressed to boost China's export economy.
Haruhiko Kuroda, a special adviser to the Japanese cabinet, said at a conference in Washington last month that East Asia should have an effective mechanism for exchange rate co-operation that can resist U.S. pressure on currency and trade policy.