1. We, the ASEAN Finance Ministers, convened our 8th Annual Meeting in Singapore on 7 April 2004 under the chairmanship of H.E. Mr Lim Hng Kiang, Minister, Prime Minister’s Office and 2nd Minister for Finance, Singapore.

2. We discussed recent global economic developments, performance of ASEAN economies in 2003 and outlook for this year. We also reviewed and are satisfied with the progress of the implementation of the Roadmap for Integration of ASEAN in Finance that was adopted by the ASEAN Leaders in October 2003 and other regional finance cooperation initiatives including customs, insurance, taxes and regional self-help and support mechanisms.

Recent Economic Developments

3. We are pleased with the resilience of our economies in 2003 despite the adverse impact of SARS earlier in the year.  Proactive policy responses and robust domestic and external demand during the second half of last year resulted in a higher annual growth of 5 percent across ASEAN countries compared to 4.5 percent in 2002.  For some of our economies, growth was also supported by continued revival in investment, including foreign direct investment. Most capital markets were also very active with regional stock markets achieving strong performances.

4. Monetary conditions were accommodative with stable or lower interest rates, as inflation in most countries remained subdued.   In general, most countries maintained a stimulative fiscal stance while moving towards the goal of attaining fiscal consolidation in the medium term.  We also noted the sustained efforts undertaken by our countries to complete the financial and corporate sector restructuring agenda not only to reduce potential vulnerabilities in an uncertain global environment, but also to promote economic resilience and position ASEAN for productivity-led growth going forward.

5. The prospects for growth in our economies are stronger in 2004. We expect our region to continue its growth momentum in 2004 with a projected GDP growth of 5.5 to 5.9 percent. Growth is expected to be broad based, with both domestic and external demand providing the impetus for expansion.

6. Despite the improved outlook for the global economy in 2004, we recognize that downside risks exist.  In particular, the current account and fiscal imbalances in some of the major industrial countries may cause misalignments and volatility in the financial markets.  A gradual adjustment to these imbalances is necessary so as to avoid putting undue stress on the global and regional economic prospects.  In this respect, the ASEAN countries have adopted demand strengthening policies which will play a positive role in the global adjustment process.

Roadmap for Integration of ASEAN in Finance

7. Since our Leaders’ adoption of the Roadmap for Integration of ASEAN in Finance (the Roadmap) in October 2003, we have made progress in the areas of capital market development, capital account liberalization and financial services liberalization.

8. We are pleased that our cooperation in capital market development has resulted in the formulation of a regional training program that will focus initially on four broad areas, namely (a) legal, regulatory and supervisory framework, (b) risk management, (c) liquidity enhancement, and (d) market infrastructure for trading, clearing and settlement. Training vendors will be involved in the implementation of the program.

9. We agreed to set up a task force to explore ways to forge alliances and linkages within the ASEAN securities markets.  We also agreed to organize  promotional efforts to profile ASEAN better.  In this regard, we note that Singapore will be hosting the International Monetary Fund/World Bank Annual Meetings in 2006.  This event will present a unique opportunity for ASEAN countries to work together to showcase the economic and social developments of ASEAN.

10. Implementation of the Roadmap on capital account liberalization also proceeded as planned. A stock-take of capital account measures is being undertaken and a list of existing prudential policies and safeguards is also being compiled.  These steps would enhance the understanding of respective countries’ systems, and facilitate the preparation of their capital account liberalization programs.

11. We also expect to conclude the current third round of negotiations on liberalization of financial services by the end of this year, and will commence the next round of negotiations in 2005.

Strengthening Regional Self-Help and Support Mechanism

12. On regional self-help and support, we are pleased with the successful conclusion of four bilateral swap arrangements (BSAs) under the Chiang Mai Initiative (CMI) since we last met in Makati City, the Philippines in August 2003. The BSA network now expands to sixteen agreements with a combined size of USD 36.5 billion.

13. We also noted the progress made in fostering domestic and regional bond markets under the Asian Bond Markets Initiative (ABMI) in collaboration with our Plus Three partners.

14. We are pleased with the overall progress achieved towards regional integration, and commit to further strengthen our cooperation to expedite the implementation of significant initiatives such as the Roadmaps, the CMI and the ABMI.  We underscore the importance of continuous efforts to further develop and strengthen our financial markets and to achieve the objectives of our regional cooperation towards financial stability and integration.

15. We expressed our sincere appreciation to the Government and people of Singapore for their excellent arrangements and warm hospitality accorded to all delegates. The 9th AFMM will be held in Lao PDR in 2005.