Foreign ministers from 18 Asian countries yesterday agreed to promote bond markets in the region to avoid another financial crisis of the kind that devastated regional economies six years ago.
At the end of a two-day Asia Cooperation Dialogue meeting, the ministers issued a declaration affirming their commitment to promote "efficient and sustainable Asian bond markets for the betterment of Asia and its financial system."
Thai Prime Minister Thaksin Shinawatra, who released the declaration, called for a self-reliant and interdependent Asia whose prosperity will benefit not just the region but the world at large.
Proponents hope that regional bond markets will provide stable supplies of long-term capital for Asia's private sector.
At present, Asian savings often go to global markets before being channeled back as high-risk premium loans. Sudden changes in capital flows were a major factor behind the Asian financial crisis of 1997-98.
The declaration also hailed the establishment on June 2 of a US$1 billion Asian Bond Fund in which many ACD members, including Japan, China and Thailand, will pool their reserves to buy Asian government bonds.
India is eager to set up a second Asian Bond Fund, and is willing to contribute initial seed money of US$1 billion on its own, Thai Foreign Minister Surakiart Sathirathai told reporters.
Thaksin said that although Asia's US$1.4 trillion in foreign reserves represents half of the world's total international reserves, Asia has never used that money to create more wealth within the region.
"These reserves - our own reserves - were used to create and add more wealth to the western hemisphere," the Thai prime minister said.
Asia "must try to manage its own assets, resources and strengths in such a way that creation of our financial instruments will serve us best," he said.
The ACD meeting also discussed ways to promote cooperation in other areas such as energy security, poverty reduction, information technology, tourism and human resources development.
(eastday.com June 23, 2003)
