On September 18, 2020 morning, at the International Conference Center, H.E. Mr. Le Minh Hung, Governor of the State Bank of Vietnam (SBV), and H.E. Mr. Dinh Tien Dzung, Minister of Finance of Vietnam, co-chaired the virtual 23rd ASEAN+3 Finance Ministers’ and Central Bank Governors’ Meeting (AFMGM+3). From the Japanese co-chairmanship, there was H.E. Mr. Aso Taro, Deputy Prime Minister and Minister of Finance of Japan, and H.E. Mr. Kuroda Haruhiko, Governor of the Bank of Japan (BoJ). This was the most important event out of a series of ASEAN+3 cooperation activities under the co-chairmanship of Vietnam and Japan in 2020.
Also attending the Meeting were Finance Ministers and Central Bank Governors of ASEAN+3 countries; the ASEAN Secretary-General, the President of the Asian Development Bank (ADB), the Regional Director of the International Monetary Fund (IMF), the Director of the ASEAN+3 Macroeconomic Research Agency (AMRO).
At the Meeting, the ASEAN+3 Finance Ministers, Central Bank Governors and leaders of international financial institutions joined a policy dialogue on the global and regional macroeconomic situations as well as responses to the Covid-19 pandemic.
The Finance Ministers and Central Bank Governors also reviewed the implementation of the cooperation initiatives under the ASEAN+3 Financial Cooperation Process; discussed about the strategic directions and new initiatives of the ASEAN+3 Financial Cooperation Process; and adopted a Joint Statement of the Meeting.
Governor Le Minh Hung and Minister of Finance Dinh Tien Dzung co-chair the Meeting
Regarding the outlook for global and regional economic development, the ASEAN+3 Finance Ministers, Central Bank Governors and leaders of international financial institutions shared their views on the risks and challenges posed by Covid-19 facing the global and regional economies. According to the IMF's forecast, the global economy in 2020 would decline by 4.9%, while the Asian economy would decrease by 1.6%, of which the ASEAN region would have a negative growth at -2.0%; for the ASEAN+3 countries, Japan is projected to grow by -5.8%, South Korea by -2.1%, and China by 1%.
In the role of the Chair for the macroeconomic policy dialogue Session, SBV Governor Le Minh Hung emphasized the importance of financial and monetary authorities in formulating and implementing macroeconomic measures and policies in a prompt, timely and effective manner, in order to increase the resilience of the economies to shocks, thereby helping to maintain the stability and integrity of the financial system.
The participants at the Meeting also shared about policy solutions that the regional economies have been implementing to control the pandemic and recover the economic growth, including packages of fiscal, monetary and regulatory solutions. The Finance Ministers and Central Bank Governors expressed their views that in the context of increasing interdependence among economies, the effects caused by the pandemic on the global supply chain have become more serious. They agreed that regional cooperation, including financial cooperation, is an important element helping countries to enhance their capabilities in coordinating with one another and responding to the impacts of the pandemic, and supporting sustainable economic recovery.
Governor Le Minh Hung speaks at the Meeting
SBV Deputy Governor Nguyen Thi Hong, as the Head of Vietnamese Delegation, shared more about the SBV’s measures in pursuing the Government’s dual goal of effectively controlling the epidemic and accelerating the socio-economic development. The SBV has proactively regulated the monetary policy tools to control inflation, stabilize the macro-economy, support economic recovery and ensure the safety of the system of credit institutions. However, in the coming time, Vietnam may face many more difficulties and challenges in policy making due to the limited policy space and budget. Therefore, the SBV Deputy Governor expressed her hopes that the international organizations would continue to assist the member countries by providing policy advice as well as providing financial support if needed.
Regarding the ASEAN+3 financial cooperation initiatives, at the AFMGM+3, the ASEAN+3 Finance Ministers, Central Bank Governors adopted important technical substances, including the amendments to the CMIM Agreement, in which an important change is to increase the ratio of access to the CMIM program that is not tied to IMF loans from 30% to 40%; finalizing the CMIM Manual on swap transactions, and the Guidelines on applying conditions of the CMIM program which is tied or not tied to the IMF loans; plan to deploy the 11th test-run of CMIM with real money, etc. The above results have contributed to increasing the availability and efficiency of CMIM, meeting the new requirements of the financial market, towards the goal of making CMIM become an effective tool to supplement the regional and global financial security network. The achieved results of the CMIM Initiative are of great importance for tightening the cooperation and strengthening the mutual support during a time when the regional economy is facing a lot of difficulties and uncertainties.
The Meeting also appreciated AMRO’s efforts in having actively implemented activities on monitoring the macro-economy, providing assessment and analysis of the impacts of the Covid-19 pandemic on the region, and making policy recommendations to ensure the stability of the regional macroeconomic and financial situation.
The Finance Ministers and Central Bank Governors also acknowledged and made high evaluation for the implementation progress and the results achieved by the working groups of the Asian Bond Market Initiative (ABMI) in studying to improve the business environment to attract more investors, developing new investment tools, improving the legal framework, developing infrastructure for the bond market as well as implementing technical assistance programs for the development of domestic bond markets in the member economies.
To enhance the regional economic and financial stability, the Finance Ministers and Central Bank Governors welcomed the implementation of new initiatives within the framework of the Strategic Directions of the ASEAN+3 Financial Cooperation Process, including initiatives on: (i) Promoting the use of local currencies for trade and investment payments, and payment connectivity; (ii) Developing a comprehensive initiative on infrastructure finance; (iii) Designing support tools to help the members to better address the problems related to the macroeconomic structure; (iv) Harmonizing the collaborative initiatives in climate financing such as the Southeast Asia Disaster Risk Insurance Facility (SEADRIF); and (v) Strengthening policy coordination to make the best of the benefits from technological innovations in minimizing financial risks.
With a high consensus, the Finance Ministers and Central Bank Governors adopted a Joint Statement of the 23rd AFMGM+3. The member countries expressed high evaluation for the organization and arrangements, as well as the effective and efficient co-chairmanship at the Meeting by the Governments of Vietnam and Japan in 2020 while still under the complicated impacts of Covid-19, and hoped that the 24th AFMFM+3 Meeting, which is expected to be held in Tbilisi, Georgia under the co-chairmanship of Brunei Darussalam and South Korea in 2021, would be another great success.
Le Hang