ASEAN Countries Commit to Maintaining Economic Stability after having a meeting between Indonesia’s Minister of Finance and Governors of the ASEAN Central Bank (AFMGM) held collaboratively by Indonesia’s Ministry of Finance and Bank Indonesia on 31 March 2023 in Nusa Dua, Bali.
Finance Ministers and Central Bank Governors from nine ASEAN countries (Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand, Vietnam), as well as representatives from six international organizations, which are the Asian Development Bank (ADB) , ASEAN+3 Macroeconomic Research Office (AMRO), International Monetary Fund (IMF), Financial Supervisory Board (FSB), Bank for International Settlements (BIS) and World Bank attended the meeting to discuss the maintenance of economy in ASEAN.
At the meeting, the Ministers of Finance, Sri Mulyani, and the Governors of the ASEAN Central Banks reaffirmed their joint commitment to maintaining financial stability and advancing financial integration against uncertain economic prospects that could have an impact on economic growth in the ASEAN region.
Sri Mulyani Indrawati explained that ASEAN has the goal of becoming a region with strong, inclusive and sustainable economic growth. To ensure that this will be sustainable, ASEAN’s capacity in facing various challenges must be strengthened, including facing the new challenges that are emerging today, up to the challenges of the next twenty years.
One of the ways in facing these challenges have been reflected in the theme of Indonesia’s Chairmanship, which is ASEAN Matters: Epicentrum of Growth. With this theme, Indonesia hopes that ASEAN will remain relevant, strategic and important to the world, or in other words ASEAN Matters. This theme reflects that Indonesia wants to make ASEAN a center for regional and world economic growth.
On the other hand, the Governor of Bank Indonesia, Perry Warjiyo, stated that members must work collaboratively and cooperatively on three agendas. First, we must have a good understanding of the dynamics of global and regional macroeconomic and financial stability. Second, take advantage of the global agenda in the field of cross-border payments. Third, it is important for emerging markets to protect the external sector from unintended consequences.
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ASEAN collectively has high economic growth and macroeconomic stability. For example, the ASEAN-5 economy grew by 5.3% last year and is collectively expected to be 4.6% this year and increase to 5.6% in 2024. This growth will continue, among others, on the back of consumption, trade, and strong investment, as well as open trade and investment into other countries.
Even so, ASEAN and the global are still facing a number of challenges, including spillover effects from the global economy, high interest rates, high inflation, and global financial uncertainty. Therefore, ASEAN needs to underline the importance of strong collaboration and cooperation, which is reflected in Indonesia’s Priority Economic Deliverables (PED), to overcome risks that threaten the regional economy.
To face various challenges in ASEAN, there are 3 priorities related to the central bank’s agenda. First, strengthening the macroeconomic policy mix to deal with global spillovers in order to support macroeconomic and financial stability as well as support economic recovery and integration in the ASEAN region.
Second, expanding Regional Payment Connectivity (RPC) among ASEAN members quickly. Third, strengthening financial resilience, including through the use of local currencies to support cross-border trade and investment in the ASEAN region.
The AFMGM meeting is also an opportunity to promote Indonesia’s cultural diversity, with the hospitality theme “Discover Indonesia”. The introduction of Indonesia’s cultural diversity during the meeting showed how solidarity can be achieved amidst differences, and how collaboration within a diverse ASEAN community can support ASEAN’s progress as a center for global economic growth.
The results of the first AFMGM meeting will be reported to the 42nd ASEAN Summit in Labuan Bajo, East Nusa Tenggara May 2023, which will then be followed by the second AFMGM in August 2023 in Jakarta. Various discussion agendas in the Economic Pillar Financial Track are expected to produce concrete results that are of significant benefit and have a positive impact on countries in the ASEAN region.