Regional finance ministers are to meet on the sidelines of the Asian Development Bank (ADB) gathering this weekend to formally announce the setting up of joint funds to beat the global economic crisis.
Ministers from the 10-member ASEAN grouping, as well as key partners China, Japan and South Korea, will meet on the Indonesian island of Bali, said Somchai Sajjapongse from Thailand’s fiscal policy office.
“On May 2 there’s going to be a meeting of deputy finance ministers and on May 3 the ASEAN+3 finance ministers will meet,” Somchai said.
The meeting would formally announce the establishment of a regional emergency fund, he said.
The “Chiang Mai Initiative Multilateralization” is an expansion of the Chiang Mai Initiative — a bilateral currency swap scheme set up after the 1997-1998 Asian financial crisis.
Under the new scheme, the swaps will be multilateral, making it easier for countries under stress to borrow emergency funds.
“Since the last meeting the ministers have agreed on the main elements of [it] and expect to have a conclusion at the Bali meeting,” he said.
Ministers plan to expand the fund from the original US$80 billion to US$120 billion, with China, Japan and Korea collectively providing 80 percent of the cash.
Of the three key partners, “China and Japan are competing to be the main contributor but the final decision is going to be on third of May,” Somchai added.
In its Asian Development Outlook in March, the bank said that the region’s developing economies would expand by just 3.4 percent this year, down from 6.3 percent last year and 9.5 percent in 2007.
“The short-term outlook for the region is bleak as the full impact of the severe recession in industrialized economies is transmitted to emerging markets,” ADB acting chief economist Jong-Wha Lee was recently quoted as saying.
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