ASEAN agrees to continue stimulus programs despite global recovery

April 9, 2010 10:35 pm 

HANOI, Vietnam, April 9 — Despite signs that the global economy is recovering, the 10-member Association of Southeast Asian Nations (ASEAN) today agreed to continue their respective stimulus programs to help vulnerable sectors cope with the impact of the global financial crisis that started in September 2008.

In a joint statement at the conclusion of the 16th ASEAN Summit and other Related Meetings at the National Convention Center here, ASEAN leaders, including Philippine President Gloria Macapagal Arroyo, said “we will maintain monetary and fiscal support while preparing for the orderly unwinding of expansionary policies until the recovery is on a firm footing. We note that as market conditions and the economic outlook are improving, we need to reconsider the continued support of monetary and fiscal policies for sustained recovery and resumption of private credit flows in our economies.”

ASEAN’s decision hews closely to the advice of multilateral lending institutions (MLIs) such as the International Monetary Fund (IMF) and the World Bank (WB) that countries delay their exit programs, saying that while the global economy is indeed recovering, the recovery is expected to be weak.

The ASEAN joint statement said that such fiscal and monetary stimuli will eventually have to be reversed and phased out.

“We are determined for ASEAN to sustain its recovery in the aftermath of the global financial crisis and economic downturn. We, therefore, re-affirm our commitment towards regional integration and building the ASEAN community, and re-affirm our willingness and readiness to participate in coordinated efforts towards sustained global economic recovery,” the leaders said in their joint statement.

The ASEAN leaders vowed to cooperate in restoring the health of financial systems, maintaining supportive macroeconomic policies, and strengthening regional surveillance and economic monitoring capacities to detect early macro-financial risks and vulnerabilities.

“We affirm our determination to enhance regional financial stability through such regional initiatives as the Chang-Mai Initiative Multilateralization (CMIM), the Asian Bond Markets Initiative (ABMI), the Credit Guarantee Investment Facility (CGIF), and the ongoing enhancement of the ASEAN Surveillance Office,” the joint statement said.

In this connection, the ASEAN leaders welcomed the inaugural Informal East Asia Summit (EAS) Finance Ministers Meeting in Tashkent, Uzbekistan in May 2010.

On enhancing ASEAN Economic Integration, ASEAN leaders reaffirmed their resolve to realize the ASEAN Economic Community, which will establish ASEAN as a single market and production base by 2015.

“We ask all the AEC Council Ministers and officials concerned to ensure that the AEC blueprint and the strategic schedules contained therein are implemented in a timely manner,” ASEAN leaders said.

They also emphasized the need to enhance cooperation and dialogue with their partners, especially in fully implementing agreements that address regional and global challenges.

ASEAN leaders vowed to continue to reject protectionism and reaffirmed their commitment to “refrain from raising new barriers to trade and investment and keep our markets open.”

They expressed their commitment to the World Trade Organization (WHO) Doha Development Agenda and looked forward to the early and successful conclusion of the Doha Round.

ASEAN leaders also welcomed the G-20 Leaders’ Statement made at the Pittsburg Summit in September 2009 and the Asia-Pacific Economic Cooperation (APEC) Leaders’ Declaration made in Singapore in November 2009, particularly on the importance of an ambitious and balanced conclusion of the Doha Development Agenda, the continued rejection of protectionism and the delivery of a global stimulus package to sustain global economic recovery.

“ASEAN strongly believes that it can contribute to the deliberations of the G-20 through the continued participation of the ASEAN chairman and the ASEAN secretary general in future G-20 Summits,” the joint statement said. (PNA) RMA/OPS/rsm

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