President Lee Myung-bak, center in the front row, poses with head delegates during the ASEM Finance Ministers’ Meeting in Seogwipo, Jeju Island, Monday. Finance ministers from Asia and Europe began talks to discuss challenges buffeting the world economy including global financial turmoil and the skyrocketing costs of food and oil. / AP-Yonhap |
Jeju Initiative Calls for More Asia-Europe Partnership
By Lee Hyo-sik
Staff Reporter
Jeju ― ASEM finance ministers pledged to boost cooperation in infrastructure financing and sharing of information and knowledge in the sector for greater economic growth and social development.
After concluding the 8th ASEM Finance Ministers' Meeting Monday, 43 ASEM members ― 27 EU countries, 16 Asian countries ― issued a joint statement, including the adoption of the ``Jeju Initiative,'' which called for greater cooperation in public-private-partnership (PPP) financing to infrastructure development in member states.
Ministers also reached a consensus on three other agendas ― global and regional economic developments and policy responses, market-oriented approaches to cope with climate change, and a cooperative partnership between Asia and Europe.
Global Economic Developments
Ministers had a comprehensive discussion on global and regional economic and financial developments, as well as on the Asian and European policy responses. Ministers noted the global economy had been facing a challenging period.
The statement said while remaining positive about the long-term outlook of the global economy, they recognized that the short-term economic prospects have weakened.
Ministers consented to the analysis that downside risks have emerged from the slowdown of the U.S. economy, tightened credit conditions in global financial markets, and mounting inflationary pressures mainly driven by high energy and food prices.
They also underscored that both Asia and Europe are currently less vulnerable and significantly more resilient to sharp external shocks than a decade ago. However, ministers pointed out that both regions are not fully immune to global economic risks.
Jeju meeting participants welcomed timely measures by Asian and European countries to deal with the financial turmoil. ``In this context, ministers also welcomed the recommendations by the financial stability forum aimed at addressing the consequences of the financial turmoil. Ministers recognized that rapid implementation of the recommendations by the relevant parties will not only enhance the resilience of the global financial system in the longer term, but would also help support confidence and improve the functioning of the markets,'' the statement said.
ASEM ministers acknowledged that sound and balanced monetary and fiscal policies are needed to maintain the economic activity at a sustained pace and they reaffirmed their commitment to make strong and coherent actions both at the domestic and regional level, taking due account of cross-border spillovers to other countries.
Ministers expressed their concerns over the surge in commodity prices, especially of oil and food, which pose a serious challenge to stable economic growth worldwide and have serious implications for the most vulnerable. Ministers agreed on the need for internationally coordinated policy response, in particular to cushion the impact on the poorest, including enhanced investment in agricultural and energy sectors and maintenance of market openness,'' the joint statement said.
They highlighted the need for further analysis of the real and financial factors behind the recent surge in commodity prices, their volatility and the effects on the global economy.
Also, ministers acknowledged that some aspects of the European experience are relevant to the current efforts of Asia to enhance regional financial cooperation. Recently this year the EU celebrated the 10th anniversary of the key decisions that led to the adoption of the euro as the national currency of now 15 European countries and the establishment of the European Central Bank. The launch of the euro was the crowning achievement of an outstanding legal, technical and political process, which started more than 50 years ago.
In Asia, the current financial cooperation arrangement, such as the Chiang Mai Initiative (CMI), represents an Asia-specific approach, while also drawing on European experiences.
The statement said the arrangements constitute a pragmatic way of signaling the commitment to build confidence and trust between economic and monetary policymakers and to create conditions for closer dialogue and an effective regional surveillance system.
Ministers also agreed on the importance of Asia's successful efforts to strengthen monetary and financial cooperation. Greater regional financial stability would strengthen the resilience of the Asian economies, enhance the functioning of the international monetary system and could facilitate efficient global economic and financial adjustments.
According to the statement, ministers discussed the lessons of monetary integration in Europe and the prospect of financial integration in Asia. Ministers acknowledged that financial integration could bring more stability to the region and in turn, would reduce uncertainty and foster economic growth.
Infrastructure Finance and Microfinance
Ministers noted that infrastructure development could play a crucial role in economic growth and social development. They acknowledged an improved environment for PPP financing could enhance infrastructure development, while ensuring adequate value-for-money as well as proper recording and disclosure of costs and risks to the public.
``Ministers confirmed that closer cooperation among ASEM member countries would facilitate sharing of PPP experience and promote PPP infrastructure financing in the region. In this regard, they welcomed the launch of the European PPP Expertise Center and encouraged it to play a pivotal role in promoting PPP in Europe,'' the statement said.
They agreed on the importance of sharing the related information and knowledge as well as capacity building in order to promote PPP in infrastructure. In this context, ministers welcomed the Jeju Initiative to enhance the mutual cooperation on PPP among ASEM member countries.
The mutual cooperation under the Jeju Initiative will possiby include developing partnership programs such as promoting information sharing on PPP among member countries, operating education and training programs, providing technical assistance, and exchanging experts in both regions.
They agreed to launch a taskforce to examine the details of the partnership including information sharing on PPP among member countries and to hold an ASEM international conference on PPP before the following ministers' meeting.
Ministers welcomed the Korean government's strong commitment to support the establishment and operation of the taskforce as well as to hold the international conference. Also, they exchanged their views on recent trends in the microfinance market and came to the agreement that microfinance would be an effective and powerful vehicle to stimulate economic development and enhance social cohesion for both developing and developed countries.
Ministers emphasized the need for the public sector to encourage private initiatives and market mechanisms to ensure long-term sustainability and efficiency of the microfinance industry. Ministers also agreed that the public sector will make efforts to establish legal and regulatory frameworks considering the special characteristics and needs of the microfinance industry.
Climate Change
According to the statement, ministers noted the progress in negotiations on a follow-up to the Kyoto Protocol under the United Nations Framework Convention on Climate Change (UNFCCC) and welcomed the adoption of the Bali Roadmap.
They reaffirmed the principle of common but differentiated responsibilities. Ministers were determined to further strengthen cooperation to promote the full, effective and sustained implementation of the Convention.
Ministers agreed to further explore the role of the market-oriented responses in mitigating greenhouse gas emission costs effectively and with minimal impact to growth prospects.
``They took note of market-oriented policies as a means of working with the market to appropriately price greenhouse gas emissions changing the incentives for lower carbon activities, while also acknowledging the potential for other policy levers.''
Ministers also recognized the importance of designing policies that provide opportunities for developing countries to ensure their economic growth and development.
Reflecting the discussion among finance ministers in Bali in 2007, ASEM ministers also recognized the possible economic benefits from taking timely actions on climate change and the positive impacts on long-term economic growth and development from adopting cost effective policies.
Cooperative Partnership
Ministers recognized the growing interdependence of the economies and the increasing importance of dialogue and cooperation between Europe and Asia. ``In this regard, ministers welcomed the continued efforts to deepen the cooperative relations between Asia and Europe such as the establishment of the ASEM Dialogue Facility and the ASEM Conference which was held back to back with the Finance Ministers' Meeting.
They confirmed with satisfaction that the newly introduced ASEM Finance Minister Meeting process, which consists of a biennial ministerial meeting and annual deputies' meetings enabled a more efficient and effective approach to the agenda through a predetermined timetable.
``Recognizing that this year's meeting enabled an in-depth discussion on a wide range of issues, ministers also agreed to continue with this format in the future to ensure constructive and concrete results.''
Meanwhile, ministers agreed that the ninth ASEM Finance Ministers' Meeting will be held under the chairmanship of Spain in 2010. They also noted that Spain will hold the next Deputies' Meetings in 2009 and 2010 respectively.
Jeju meeting participants showed their gratitude to the Korean government for the excellent arrangement for the gathering and the Jeju people for their warm hospitality.
leehs@koreatimes.co.kr
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