Presentation by Ambassador Manaspas Xuto

Executive DirectorInternational Institute for Trade and Development

(ITD)“The Relevance of Asia Cooperation Dialogue

and the Asian Bond”

International Conference on “Building a New Asia : Towards an Asian Econo

mic Community”10-11 March 2003, New Delhi

Why ACD?

• Negative impacts of 1997 Economic Crisis and the Global Economic Downturn

• Despite their great potentials and inner strengths, Asian countries have not effectively and collectively utilized them to their fullest benefits.

• Despite various regional and sub-regional groupings, no Asia-wide cooperation has existed to unite the whole continent

Core Values of ACD

• “Missing link”• Positive thinking • Non-institutionalized • Top-down• Evolving • Inclusive• Result-oriented

Objectives of ACD

• Combine Asian strengths

• Enhance competitiveness of Asian countries

• Focus on economic cooperation and set aside sensitive or unresolved political matters among members

• Avoid duplication of already existing activities in the region

• Make Asia a better partner for our counterparts around the world

Asia Cooperation Dialogue

BahrainBangladeshBrunei DarussalamCambodiaChinaIndiaIndonesiaJapanRepublic of KoreaLaosMalaysiaMyanmarQatarPakistanPhilippinesSingaporeThailandVietnam

Poverty Alleviation (Bangladesh / Cambodia / Vietnam)Energy Security (Bahrain / Indonesia)Agriculture (China)Biotechnology / Transport linkages (India)E-commerce / Infrastructure Tax (Malaysia)E-commerce / E-government / Institute of Asian Standards (Pakistan)SMEs (Singapore) IT Development (Republic of Korea)Energy / Science & Technology (Philippines)Tourism (Thailand / Cambodia)Working Group on Financial Cooperation (Thailand)Human Resource Development (Vietnam)

1st ACD Retreat, Cha-Am, Thailand, 18-19 June 2002

1st Ambassadorial Retreat, 2 July 2002

ACD Breakfast Meeting, 14 Sept. 2002, New York

2nd Ambassadoria

l Retreat, 23 December 2002

2nd ACD Retreat, 21-22 June 2003, Chiang Mai

Why Asian Bond ?

• To solve the problem of Asia’s over-reliance on foreign banking systems and short-term borrowing from abroad which mainly led to the 1997 financial crisis• To utilize a large portion of the total combined international reserves of Asia for the maximum benefits of the region• To allow Asian financial institutions to better prepare themselves for risk management and to resolve problems of liquidity by selling bonds• To provide alternatives for investment of Asian countries

ComponentComponent

1. Demand Side1. Demand Side

2. Supply Side2. Supply Side

3. 3. IInfrastructurenfrastructure

ForumForum

EMEAPEMEAP

ASEAN + 3ASEAN + 3

APEC FMMAPEC FMM

ProductProductAsian Bond FundAsian Bond Fund

Capital market developmCapital market developmentent

Regional BondRegional Bond Market Market DevelopmentDevelopment

Credit Guarantee ArranCredit Guarantee Arrangementgement

Development of SecuritizDevelopment of Securitizationation

Risk ManagementRisk Management

Regional Clearing & SettRegional Clearing & Settlementlement System System

Development of Asian Bond Market

ACD as the “missing link”to provide political impetus t

o the existing Asian Bond process

“Political launch” of the Asian Bond concept

2nd ACD Retreat in June 2003

Timeline for Asian BondTimeline for Asian Bond

ASEAN + 3Endorse-

ment21-22

May 03

Asian Bond Fund

LaunchMay 2003

EMEAP Meeting

Early June 03

APEC FMM

4 Sept. 03

ACD Chiang Mai Declaration on Asian Bond Market Development

22 June 2003

ACD WG on

Financial Cooperation

May 03

May June September

THANK YOU