Partial text of ASEM statement on Asian economic crisis
Partial text of ASEM statement on Asian economic crisis
LONDON (Reuters): Following is a partial text of a statement on the financial and economic situation in Asia issued at the Asia-Europe summit last Friday:
1. Leaders discussed the recent financial and economic situation in Asia, emphasizing its impact on the global economy and stressing their concern about the human cost to the people of Asia. They reaffirmed the need to respond decisively to the crisis and welcomed the reforms being undertaken by the Asian countries concerned to promote financial and economic stability. They expressed confidence that with full implementation of the necessary policy reforms and strong mutual support, financial stability would be restored. Strong economic fundamentals would enable Asia's impressive growth performance to continue over the medium term.
2. Leaders agreed that it was important to reinforce the role of the IMF at the center of the global response to what is a global concern. They expressed their strong support for full implementation of the programs of reform agreed with the IMF, the World Bank and the ADB, which would be vital in restoring confidence in Asian economies and financial markets. They appreciated and encouraged the adjustment efforts in the Asian countries concerned. They emphasized that policies should be implemented in an open, transparent and non-discriminatory manner.
3. Leaders welcomed the timely response to date to the crisis from the international community...
4. Leaders discussed ways, including those contained in the Manila Framework, in which the international monetary and financial system could be reformed and strengthened, focussing on crisis prevention and reducing the vulnerability of domestic financial systems to potential shocks, including speculation- induced instability. They called for:
* a strengthened capacity of the IMF to respond to financial difficulties in a timely and decisive manner, and access to expanded levels of IMF resources through a quota increase and early ratification of the New Arrangements to Borrow (NAB);
* enhanced and more transparent global IMF surveillance, complemented in Asia by the establishment of a new regional surveillance mechanism;
* strengthened cooperation, regulation and supervision in financial sectors, and an examination by the IMF and international regulators' bodies of ways to improve transparency in financial and capital markets, including the possibility of monitoring short-term capital flows.
5. Leaders stressed the importance of devising strategies to secure private sector involvement in providing financial assistance as necessary and appropriate, in cooperation with and supporting the approach of the public sector...
6. Leaders recognized the importance of continued access to trade finance for economic recovery within the framework set by the IMF...
7. Leaders agreed that cooperation through ASEM on technical assistance could play a major role in support of the programs of reform agreed with the international financial institutions...
8. In addition to existing bilateral arrangements, Leaders welcomed the proposal to create a European network, associating Asian expertise, for increasing the quality and quantity of technical advice in reforming the financial sector...
9. Leaders noted the particular importance of strengthening and reforming domestic financial systems and economic structures including corporate sectors in order to realize Asia's underlying potential and achieve sustained economic development. They also noted that Asian efforts to undertake the necessary reforms in the financial sector could play a decisive role in restoring investors' confidence by ensuring transparency, predictability and proper surveillance...
10. Leaders recognized the need to consider the social impact of the financial difficulties in Asia. They noted that implementing comprehensive reform programs offered the opportunity to build a strong platform for sustainable future growth. But in doing so, it would be important to protect social expenditure wherever possible, and develop well-designed and affordable social safety nets to safeguard the poor.
11. Aware of the importance of complementarity between economic and social policies, they agreed to adopt a balanced approach in addressing the socio-economic impact...
12. Leaders also considered the impact of Asia's current difficulties on the world economy. They noted that with continued implementation of sound economic and financial policies, the overall impact on the world economy was likely to be material but manageable. There were already signs of substantial improvements in the external accounts of some Asian countries, but the difficulties were not yet over and the need for vigilance remained.
13. While expressing confidence about the prospects for recovery in Asia, all ASEM partners recognized the need to take appropriate measures to strengthen consumer and business confidence in order to overcome the crisis. It was also important more than ever for global economic stability for the European countries to keep their own economies in good order.
14. Leaders acknowledged that the crisis could trigger protectionist reactions as a result of shifts in trade and investment flows or of requirements for adjustment. They expressed their common resolve to resist any protectionist pressures and at least to maintain the current level of market access while pursuing further multilateral liberalization, which was recognized as the most effective means of overcoming protectionist pressures and helping to alleviate the crisis...
15. Leaders also acknowledged the vital contribution of economic reform programs, including reforms in the financial sector in Asia, to global efforts to resist protectionism, stimulate investment and strengthen the international trading system.
16. They noted that developments in Asian markets could lead to a drop in investments in both directions and pledged to do their best to facilitate the maintenance and expansion of FDI...