Association of Southeast Asian Nations (ASEAN) Finance ministers and central bank governors, including China, Japan, and South Korea, vowed to strengthen regional financial cooperation. This is as they cushion the economies of countries hit hard by the COVID-19 pandemic.
A statement read that they expect a rebound in 2021 as the recovery gathers momentum. It also read that vaccine rollouts allow a gradual opening up of their economies.
Across and within countries, the recovery appears uneven and subject to possible elevated risks. This includes the spread of new variants and different paces of vaccination, it added.
The ministers vowed to achieve inclusive recovery and preserve long-term fiscal sustainability. They also pledged to maintain financial stability in a joint statement issued. This followed a virtual meeting on the sidelines of the Asian Development Bank’s (ADB) annual meetings.
Responses to the current COVID-19 crisis, universal health coverage, and climate change will top the ADB gatherings agenda. Additionally, high-quality infrastructure and debt transparency, and sustainability in emerging Asia will also top the agenda, said Japan’s finance minister, Taro Aso.
To strengthen the regional financial safety net, China, Japan, and South Korea said they would explore new initiatives. This was the three countries’ statement at the virtual meeting with the ASEAN.
Brunei, Vietnam, Laos, Cambodia, Thailand, Myanmar, Malaysia, Singapore, Indonesia, and the Philippines comprise the ASEAN.
To ensure a sustainable economic recovery, the financial chiefs vowed to use all policy tools. Also, to normalize expansionary policy gradually while they mitigate risks of a fiscal cliff.
The Japanese finance minister said it was significant that the regional financial leaders reaffirmed the importance of financial cooperation.
The financial chiefs from Japan, South Korea, China, and ASEAN, a group known as ASEAN+3, promised to boost the Chiang Mai Initiative Multilateralization (CMIM). This was during their September virtual meeting.
The CMIM allows the member economies to tap currency swap lines. This is to secure currencies in need.
Hence, it plays a critical role in supporting regional financial stability that way. The member economies include ASEAN+3 and Hong Kong.
The regional financial leaders also stressed their commitment to backing open and rules-based multilateral trade and investment in the region.
Meanwhile, in other economic news, the European Central Bank (ECB) can phase out emergency stimulus measures. That’s when the pace of COVID-19 vaccinations reaches a critical level, and the economy picks up speed. This was according to Luis de Guindos, the bank’s vice president.