By Na Jeong-ju
Staff Reporter
President Lee Myung-bak urged Asian countries Monday to step up efforts to expand the regional bond market as part of measures to strengthen financial integration.
He also warned of rising protectionism in the global economy, saying the continent needs to pursue free trade for economic growth and prosperity.
Lee made the remarks during his meeting with 29 journalists from ASEAN, an economic block of 10 Southeast Asian nations, at Cheong Wa Dae. The journalists arrived in Seoul for a four-day visit, during which they will cover Korea's preparations for the ASEAN+Korea summit scheduled from June 1 to 2 on Jeju Island.
They will also report on Korea's cultural and tourism infrastructure to their countries to meet the growing public interest in hallyu, or Korean culture wave, a presidential spokesman said.
``The global bond markets are heavily dependent on the United States. The expansion of Asian bond markets is already a shared goal among ASEAN leaders,'' Lee said. ``It is important to strengthen regional financial cooperation to tide over the current economic crisis. I hope the planned summit will be an opportunity to boost partnerships and discuss pending issues, such as the bond market initiative.''
Earlier this month, Seoul agreed to provide a total of $19.2 billion to the Asia Joint Fund, the Asian version of the International Monetary Fund, to help fight a regional financial crisis. Japan and China will each offer $38.4 billion to the fund, while the remaining $24 billion will be contributed by the 10 ASEAN member countries ― Singapore, Malaysia, Laos, Brunei, the Philippines, Thailand, Vietnam, Indonesia, Myanmar and Cambodia.
The effort will help Asian countries grow closer and have a stronger say on the global stage, Lee said.
Asia's move to enlarge bond markets reflects concerns that the continent is relatively vulnerable to an external shock because of a heavy dependence on U.S. and European investors. Many Asian countries have struggled with a severe dollar shortage since last summer as foreign investors dumped local stocks and for dollars in the wake of the global credit squeeze.
Experts say the unstable foreign exchange rate has negatively affected corporate activity and household consumption by aggravating uncertainties in the regional economy.