That was the key takeaway of the ASEAN Finance Ministers and Central Bank Governors Meeting (AFMGM) hosted collaboratively by the Ministry of Finance and Bank Indonesia on March 31, 2023, in Nusa Dua, Bali.
The meeting was attended by Finance Ministers and Central Bank Governors from nine ASEAN countries, such as Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.
The meeting was also attended by representatives from six international organizations: the Asian Development Bank (ADB), ASEAN+3 Macroeconomic Research Office (AMRO), International Monetary Fund (IMF), Financial Supervisory Board (FSB), Bank for International Settlement (BIS), and World Bank.
At the meeting, Indonesia’s Finance Minister Sri Mulyani Indrawati spotlighted the important and strategic role of ASEAN as the epicentrum of growth for the world.
“We believe ASEAN must aim to be a region with robust, inclusive, and sustainable economic growth. Economic growth has and will always be the story of ASEAN," the minister emphasized.
"To ensure that this will be continuous, we must strengthen ASEAN capacity to respond to the previous challenges, but most importantly, the current and new challenges that we are all seeing today and the expected challenges in the next twenty years,” she affirmed.
All of this highlights the importance of the theme of this year’s Chairmanship: "ASEAN Matters: Epicentrum of Growth."
With this theme, Indonesia is keen to demonstrate that the ASEAN remains relevant, strategic, and important, that ASEAN Matters. "Epicentrum of Growth" means that Indonesia is intent on making ASEAN the center of regional and world economic growth.
“ASEAN remains a bright spot in the global economy where the region offers more promising prospects compared to a bleaker global outlook," the minister emphasized.
This underlines the importance of strong collaboration and cooperation to contain the lingering risks that may pose threat to the regional economy.
Bank Indonesia’s Governor, Perry Warjiyo, believes that in order to address ASEAN challenges, members must work together in a collaborative and cooperative manner.
“As central bank governors and finance ministers, we must harness our collective expertise and experience to develop policies and measures that promote economic resilience, sustainability, and inclusion," he stressed.
"Such actions can include the following three agendas. First, we must have a good understanding of global and regional macroeconomic and financial stability dynamics and be able to formulate an optimal policy mix," he elaborated.
The second, he said, is leveraging on the global agenda in the area of cross-border payments.
Under the third agenda, with the current global financial market dynamics influenced heavily by a rapid interest rate hiking cycle by major central banks, it has been more important for emerging markets to shield the external sector from unintended consequences, he remarked.
At the AFMGM this year, members welcomed the theme of Indonesia's ASEAN Chairmanship in 2023, namely "ASEAN Matters: Epicentrum of Growth," with three strategic thrusts: (i) recovery and rebuilding, (ii) the digital economy, and (iii) sustainability.
Since March 28, 2023, a total of 13 high-level meetings (HLM) have been held with Central Bank Governors and Finance Ministers as well as Deputies.
Aligning with the theme, Epicentrum of Growth, the ASEAN collectively has high economic growth and macroeconomic stability. For instance, the ASEAN-5 economy grew by 5.3 percent last year, and collectively, projected to reach 4.6 percent this year and increase to 5.6 percent in 2024.
This growth will continue, among others, supported by strong consumption, trade and investment, as well as engaging open trade and investment to other countries.
Nonetheless, several challenges, including a global spillover, high interest rate, high inflation, as well as global financial uncertainty, continue to confront the ASEAN and globally.
ASEAN needs to underline the importance of strong collaboration and cooperation that is reflected in the Indonesia Priority Economic Deliverables (PED) to contain the lingering risks that may pose a threat to the regional economy.
Particular focus under coordination of Indonesia's Ministry of Finance within deliverables (PED) are health preparedness, infrastructure finance, international taxation, customs cooperation, digital financial inclusion for MSMEs, and sustainable finance.
These six agendas will further strengthen the ASEAN finance sector cooperation and integration under the existing 2025 blueprint and help the region to respond to the global challenges that the bloc is facing to ensure its economic recovery.
To address ASEAN challenges, three priorities related to the central bank agenda are firstly to strengthen the macroeconomic policy mix to face the global spillover in order to support macroeconomic and financial stability as well as to support economic recovery and integration in the ASEAN region.
Considering the multidimensional and complex nature of challenges that the region is currently facing, the meeting highlighted the need to strengthen the policy mix that covers fiscal, monetary, macroprudential, and also structural reforms.
The second is to rapidly expand Regional Payment Connectivity (RPC) among ASEAN members.
Last year, under Indonesia's G20 Presidency, central banks of five ASEAN countries -- Indonesia, Singapore, Thailand, Malaysia, and the Philippines -- already signed an MoU on cross-border interconnectivity and interoperability, the use of QR code, fast payment, and use of local currency settlements for payment between countries.
Through RPC, ASEAN members pursue to provide a seamless, fast, and efficient payment system for the entire ASEAN region. Finally, the importance of mitigating the risks that can arise from the digitization of the payment system is by strengthening regulation, supervision, adoption of international standards, and consumer protection.
Then, the third is to reinforce financial resilience, among others, through the use of local currency to support cross-border trade and investment in the ASEAN region.
The ministers and governors then agreed to the Joint Ministerial Statement (JMS) that contains the progress, achievement, and agreement on those agendas.
In addition to the policy-related discussion, the AFMGM meetings utilize the opportunities to promote Indonesia's cultural diversity.
Under the general hospitality theme "Discover Indonesia," this meeting series specifically highlights the arts and culture of Central and Eastern Indonesia.
In addition, delegates can visit the MSMEs exhibition of quality products from Central and Eastern Indonesia as well as relish Indonesian specialty coffee.
Introducing the cultural diversity of Indonesia during the meeting demonstrates achieving solidarity amid differences and how collaboration within the diverse ASEAN community can support the progress of ASEAN as a center of global economic growth.
The outcomes of the 1st AFMGM discussion will be reported to the 42nd ASEAN Summit to be held in May 2023 in Labuan Bajo, East Nusa Tenggara, followed by the second AFMGM that will be held in August 2023 in Jakarta.
Various discussion agendas in the finance track of the economic pillar are expected to produce concrete outputs of significant benefit and positive impact for countries in the ASEAN region.
Related news: BI hopes ASEAN will utilize cross-border payments
Related news: ASEAN consistently contributing 3% to global GDP: minister
Related news: Indonesia expects ASEAN growth to continue
Editor: Azis Kurmala
Copyright © ANTARA 2023
