OVERVIEW OF ASEAN AND ASEAN+3
FINANCE MINISTERS MEETING
The South East Asian Nations ASEAN and ASEAN+3
ASEAN was established on 8 August in 1967 in Bangkok- Thailand by the five original member- countries namely Indonesia, the Philippines, Singapore and Thailand. Joined later are Brunei, Vietnam, Laos, Myanmar and Cambodia. Vietnam had the ASEAN membership on 28 July 1995.
ASEAN mechanism works through ASEAN Summits and a variety of ministerial meetings between Foreign Ministers, Economic Ministers, Finance Ministers and other channels of sectorial ministers. In addition, ASEAN has ASEAN Secretariat support its programs and activities.
After the regional financial crisis in 1997, ASEAN countries were profoundly aware of the importance in reinforcing their cooperation with key partners in East Asia including Japan, South Korea and China. Since 1998, ASEAN has held annual Summit with +3 partners. Under the framework of ASEAN+3, sectorial ministers hold dialogues with their +3 partners. For financial channel in particular, this kind of dialogue has almost formalized into ASEAN +3 Financial Ministers Meeting
Mechanism of ASEAN and ASEAN+ 3 Financial Ministers Meeting
ASEAN Financial Ministers Meeting
ASEAN financial cooperation is conducted through the process of ASEAN Financial Ministers Meeting (AFMM). This process started in April 1997 when the regional financial crisis occurred. Its main objective is to accelerate the cooperation and policy dialogue between ASEAN member countries on economic and financial sectors in an attempt to strengthen the regional financial system, as well as to develop an effective and in-depth financial market, contribute to promote sustainable economic growth.
To that end, for each certain period, AFMM proposed initiatives of monetary and financial cooperation that need to be boosted among the regional countries . At present, ASEAN financial cooperation activities are concentrated on the following areas:
- Implement the Integration Roadmap till 2020 in the following fields: developing capital market, liberalizing capital accounts, financial services and monetary cooperation, including :
+ Roadmap for the development of capital market, cross-border cooperation between the markets
+ Roadmap for the liberalization of capital accounts: targeted at more liberalized circulation for capital flows by 2020 based on voluntary action plans.
+ Roadmap for the liberalization of financial services: targeted at complete liberalization in financial service sectors by 2020 ( ASEAN is currently considering to shorten the timeline by 2015 for some sectors)
+ Monetary cooperation: further cooperation in monetary policies in order to boost inter-regional commercial transactions and investment
- Promote policy dialogue at ministerial level for information sharing and giving recommendations at regional and national level in an attempt to prevent the danger of crisis re-occurrence
- Strengthen cooperation in other fields such as insurance, tariff and customs….
AFMM is held annually ( in the first week of April every year) in rotating mechanism within ASEAN countries. Since 2004, ASEAN Ministers have also organized various sessions on indirect investment promotion every September and October. Assisting Ministers’ work are:
- Finance and Central Bank Deputies Working Group Meeting;
- Group of Finance and Banking Experts Meeting;
- Sectorial forums (customs, insurance, capital market);
- Research Groups on concrete initiatives such as sponsoring mechanism for projects on infrastructure, liberalizing capital accounts and financial services …
ASEAN Financial Ministers Meeting
Japan, Korea and China ( +3 partners) are major partners of ASEAN in East Asian region. For financial channels, after the regional financial crisis in 1997, these cooperation activities were established and consolidated (through the channel of ASEAN+3 Financial Ministers Meeting - AFMM+3). The main objectives of this cooperation are similar to those of AFMM:
- Promote dialogue and economic-financial surveillance among East Asian countries.
- Strengthen cooperation in the monetary and financial sector to help prevent member- countries from the danger of crisis occurrence and consolidate the financial system in the region.
Like ASEAN, depending on the certain period and common interests of regional countries, AFMM + 3 will figure out the programs for monetary and financial cooperation in the region. At present, the main content of ASEAN financial cooperation is focused on:
- Developing the in depth bond markets in the region, moving towards the cross-border cooperation among regional markets via the implementation of ASEAN +3 bond market initiative(ABMI)
- Reinforcing economic review, policy dialogue and financial assistance in an attempt to cooperate in preventing the dangers of crisis re-occurrence through the implementation of Chiang Mai Initiative (CMI).
- Researching into monetary- financial cooperation sectors that ASEAN+ 3 need to boost in the middle and long term future
AFMM + 3 is held once every year ( in May on the sideline of annual ADB Meeting). Assisting Ministers are:
- ASEAN+ 3 Finance and Central Bank Deputies Working Group Meeting
- Sectorial Cooperation Working Group Meeting.
Under the ASEAN+ 3 regulations, ASEAN+ 3 is governed under the co-chairing mechanism, including : 01 ASEAN incumbent chairperson and 01 chairperson from +3 countries. Co-chairing countries of AFFM will be responsible for running Deputies Meeting and Group of Experts Meeting in their presidency term. In this 2008, Vietnam and Japan will be the co-chairing countries for the ASEAN+3 financial cooperation channel.
Vietnam’s participation in ASEAN and ASEAN+3.
Vietnam was one of founder-countries in ASEAN financial cooperation process in April 1997 Phuket, Thailand. Up to now, ASEAN Financial Ministers Meeting have been convened for 11 times. Vietnam was the Chairman of AFMM3 (held in 1999 in Hanoi, Vietnam). In 2008, Vietnam will take over the post of AFMM Chairmanship for the 2nd time
Though being a new member, Vietnam has been actively participating in the action plans, initiatives and in the implementation of financial cooperation program within ASEAN and ASEAN+3.