'ASEAN+3' Finance Ministers and Central Bank Governors "Support Strengthened Economic Integration"

On the afternoon of the 2nd, at the Sheraton Grand Incheon Hotel in Yeonsu-gu, Incheon, the "56th Annual Meeting of the Asian Development Bank (ADB) ASEAN+3 (Korea, China, Japan) Finance Ministers and Central Bank Governors Meeting" was held, where Masatsugu Asakawa, President of ADB, and the finance ministers and central bank governors of Korea, China, Japan, and ASEAN countries took a commemorative photo. [Image source=Yonhap News]

The finance ministers and central bank governors of the 'Association of Southeast Asian Nations (ASEAN) +3' gathered consensus at the 26th meeting held on the 2nd in Songdo, Incheon, to support the establishment of a multilateral trade system and a more strengthened regional economic integration.

At the meeting, the finance ministers and central bank governors of each country stated that despite the war in Ukraine and the aftermath of COVID-19, the global economy is expected to grow by 4.6% this year, and they assessed that the recent financial instability in the United States and Europe had a limited impact on the region.

Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho and Bank of Korea Governor Lee Chang-yong attended the ASEAN+3 Finance Ministers and Central Bank Governors Meeting, held face-to-face for the first time since the COVID-19 pandemic, exchanging views on global and regional economic trends and outlooks, policy responses to major risks, and strengthening financial cooperation.

ASEAN+3 consists of the 10 ASEAN countries (Malaysia, Indonesia, Thailand, the Philippines, Singapore, Brunei, Vietnam, Laos, Myanmar, Cambodia) along with South Korea, China, and Japan.

According to the joint declaration, despite the impact of the COVID-19 pandemic and the escalation of the Ukraine crisis, the regional economy grew by 3.2% last year and is expected to grow by 4.6% this year, supported by robust domestic demand.

They also evaluated that the recent banking instability in the US and Europe had a limited effect on the region.

However, they viewed tightening financial conditions, supply chain disruptions, and rising commodity prices due to the Russia-Ukraine conflict as downside risks to the outlook.

They emphasized the need for policy responses considering anchoring inflation expectations and maintaining financial stability, and agreed to support the establishment of a multilateral trade system based on principles of openness, freedom, fairness, and transparency, as well as a more strengthened regional economic integration.

Alongside this, to enhance regional financial cooperation, they agreed to strengthen cooperation through the Regional Financing Arrangement (RFA) future direction and regional financial safety nets such as the Chiang Mai Initiative Multilateralization (CMIM) and the ASEAN+3 Macroeconomic Research Office (AMRO).

In particular, they agreed to discuss the introduction of the Rapid Financing Facility and to study capital raising structures including the paid-in capital method.

The Rapid Financing Facility is a lending system similar to the International Monetary Fund (IMF)’s Rapid Financing Instrument, designed to support member countries in the event of pandemics, natural disasters, and other crises.

Governor Lee Chang-yong emphasized at the meeting the necessity to shift the CMIM capital raising structure from a commitment-based system to a fund-based system to enhance its effectiveness and proposed related research.

Currently, CMIM raises and supplies funds through currency swaps from member countries during crises, whereas the fund-based system raises funds in normal times and provides support during crises.

The finance ministers and central bank governors confirmed the status of discussions on revising CMIM operational guidelines and the loan margin structure, and agreed to include the future direction of CMIM in the issues for the second regular review.

There was also optimism that AMRO will contribute to regional macroeconomic and financial recovery and stability.

Next year’s ASEAN+3 Finance Ministers and Central Bank Governors Meeting is scheduled to be held in Tbilisi, Georgia, with South Korea and Laos serving as co-chair countries.

This content was produced with the assistance of AI translation services.