Opening Remarks by Mr Heng Swee Keat, Minister for Finance, at the 21st Asean+3 Finance Ministers’ and Central Bank Governors’ Meeting, at the Asian Development Bank, Manila, the Philippines
04 May 2018Excellencies,
Colleagues,
I am very happy to co-chair this with Deputy Prime Minister Kim, who is also the Minister of Strategy and Finance in Korea. Let me first begin by expressing our appreciation to the Philippines and the Asian Development Bank, for the excellent arrangements. Introduction
2. This ASEAN+3 meeting builds on the good work that Philippines and Japan have done in the past year. We hope to take this work further to enhance our cooperation among the ASEAN+3 countries. The ASEAN+3 processes play a vital role in contributing to peace, security and prosperity in the East Asian region. Cooperation among the ASEAN+3 countries has broadened and deepened across all areas over the past two decades. On the finance track, the ASEAN+3 Finance Ministers and Central Bank Governors have been meeting annually to reaffirm our commitment to maintaining financial stability and promoting growth in the region.
Economic Importance of ASEAN+3
3. Since the Asian Financial Crisis in 1997, our region has weathered many external shocks, including the Global Financial Crisis in 2008. By cooperating closely towards greater connectivity and integration of our economies, we have become stronger as a region. a. According to AMRO’s research, the ASEAN+3 region now accounts for more than a quarter of the world’s GDP at market exchange rates, and almost 30% of global trade. b. Based on prevailing conditions, AMRO expects GDP growth for the ASEAN+3 region to be 5.4 per cent for 2018; and 5.2 per cent for 2019.
Opportunities and Challenges
4. Boosted by favourable global conditions, regional economic growth has been underpinned by strong domestic demand as well as stable inflation.
5. Now just as global value chains accelerate intra-regional trade and integration, they also magnify the transmission of external shocks. This is especially pertinent in the light of growing trade tensions. New technologies give rise to opportunities but also present challenges to our economies. Asia also continues to be highly vulnerable to natural disasters, which could undo our years of economic gains if we do not address the growing protection gap. Strengthening Regional Financial Cooperation
6. So against this backdrop of the opportunities and challenges that we are facing in the ASEAN+3 region, we must continue to strengthen regional institutions and mechanisms that promote growth and resilience. This includes the Chiang Mai Initiative Multilateralisation (CMIM) – a regional initiative that is part of the multi-layered Global Financial Safety Net (GFSN). A good part of our work this year has been on strengthening the CMIM through its first periodic review.
7. We welcome the continued enhancement of the ASEAN+3 Macroeconomic Research Office’s (AMRO) capacity to support the CMIM in crisis prevention and resolution. We strongly support the initiatives by AMRO to strengthen its macroeconomic surveillance capabilities, enhance the effectiveness of its partnerships and its technical assistance to members, and contribute to the broader regional agenda and initiatives.
8. We will continue to encourage efforts to develop local currency bond markets through the Asian Bond Markets Initiative (ABMI). Deep and liquid local currency bond markets contribute to financial stability, and help to mobilise domestic savings to finance the region’s long-term financing needs, including for infrastructure.
9. We will also enhance the resilience of ASEAN+3 members to natural disasters. This morning, Cambodia, Laos, Myanmar, the World Bank, Japan and Singapore announced the establishment of the Southeast Asia Disaster Risk Insurance Facility (SEADRIF). This regional catastrophe risk insurance pool will strengthen our resilience against disaster risks and help narrow the protection gap in the region.
Conclusion
10. We will continue to build on our Yokohama Vision of a more resilient and integrated ASEAN+3. Earlier on, before I came into this room, and we are delighted to be in this beautiful ADB building and seeing so much work that is going on, and earlier on when I was walking in the galleries looking at the history of the ADB and its wonderful story of how the Asian nations have been working so closely together and with all our member countries in the ADB to eliminate poverty and look at how we can promote growth and inclusion in our economies. So in that regard, we are going to have our ADB meetings tomorrow. Looking forward to that. So, under Korea’s and Singapore’s co-chairmanship this year, we commit to supporting further, our regional initiatives and institutions, so that our economies and people will continue to prosper.
11. With that in mind, I look forward to a fruitful discussion and will now hand over to Deputy Prime Minister Kim for his opening remarks.
Colleagues,
I am very happy to co-chair this with Deputy Prime Minister Kim, who is also the Minister of Strategy and Finance in Korea. Let me first begin by expressing our appreciation to the Philippines and the Asian Development Bank, for the excellent arrangements. Introduction
2. This ASEAN+3 meeting builds on the good work that Philippines and Japan have done in the past year. We hope to take this work further to enhance our cooperation among the ASEAN+3 countries. The ASEAN+3 processes play a vital role in contributing to peace, security and prosperity in the East Asian region. Cooperation among the ASEAN+3 countries has broadened and deepened across all areas over the past two decades. On the finance track, the ASEAN+3 Finance Ministers and Central Bank Governors have been meeting annually to reaffirm our commitment to maintaining financial stability and promoting growth in the region.
Economic Importance of ASEAN+3
3. Since the Asian Financial Crisis in 1997, our region has weathered many external shocks, including the Global Financial Crisis in 2008. By cooperating closely towards greater connectivity and integration of our economies, we have become stronger as a region. a. According to AMRO’s research, the ASEAN+3 region now accounts for more than a quarter of the world’s GDP at market exchange rates, and almost 30% of global trade. b. Based on prevailing conditions, AMRO expects GDP growth for the ASEAN+3 region to be 5.4 per cent for 2018; and 5.2 per cent for 2019.
Opportunities and Challenges
4. Boosted by favourable global conditions, regional economic growth has been underpinned by strong domestic demand as well as stable inflation.
5. Now just as global value chains accelerate intra-regional trade and integration, they also magnify the transmission of external shocks. This is especially pertinent in the light of growing trade tensions. New technologies give rise to opportunities but also present challenges to our economies. Asia also continues to be highly vulnerable to natural disasters, which could undo our years of economic gains if we do not address the growing protection gap. Strengthening Regional Financial Cooperation
6. So against this backdrop of the opportunities and challenges that we are facing in the ASEAN+3 region, we must continue to strengthen regional institutions and mechanisms that promote growth and resilience. This includes the Chiang Mai Initiative Multilateralisation (CMIM) – a regional initiative that is part of the multi-layered Global Financial Safety Net (GFSN). A good part of our work this year has been on strengthening the CMIM through its first periodic review.
7. We welcome the continued enhancement of the ASEAN+3 Macroeconomic Research Office’s (AMRO) capacity to support the CMIM in crisis prevention and resolution. We strongly support the initiatives by AMRO to strengthen its macroeconomic surveillance capabilities, enhance the effectiveness of its partnerships and its technical assistance to members, and contribute to the broader regional agenda and initiatives.
8. We will continue to encourage efforts to develop local currency bond markets through the Asian Bond Markets Initiative (ABMI). Deep and liquid local currency bond markets contribute to financial stability, and help to mobilise domestic savings to finance the region’s long-term financing needs, including for infrastructure.
9. We will also enhance the resilience of ASEAN+3 members to natural disasters. This morning, Cambodia, Laos, Myanmar, the World Bank, Japan and Singapore announced the establishment of the Southeast Asia Disaster Risk Insurance Facility (SEADRIF). This regional catastrophe risk insurance pool will strengthen our resilience against disaster risks and help narrow the protection gap in the region.
Conclusion
10. We will continue to build on our Yokohama Vision of a more resilient and integrated ASEAN+3. Earlier on, before I came into this room, and we are delighted to be in this beautiful ADB building and seeing so much work that is going on, and earlier on when I was walking in the galleries looking at the history of the ADB and its wonderful story of how the Asian nations have been working so closely together and with all our member countries in the ADB to eliminate poverty and look at how we can promote growth and inclusion in our economies. So in that regard, we are going to have our ADB meetings tomorrow. Looking forward to that. So, under Korea’s and Singapore’s co-chairmanship this year, we commit to supporting further, our regional initiatives and institutions, so that our economies and people will continue to prosper.
11. With that in mind, I look forward to a fruitful discussion and will now hand over to Deputy Prime Minister Kim for his opening remarks.