H.E. R.M. Marty M. Natalegawa
Permanent Representative of the Republic of Indonesia
to the United Nations
On Behalf of ASEAN
At the Second Committee on Agenda Item 47
`Macroeconomic Policy Questions’
New York, 13 October 2008
I have the honour of delivering this statement on behalf of the ten Member States of the Association of South East Asian Nations (ASEAN). In addressing the Macroeconomic Policy Questions, ASEAN members would like to have this statement aligned with the statement made by the distinguished representative of Antigua and Barbuda on behalf of the G-77 and China.
The background for our deliberations today is the acute uncertainty about what lies ahead of us in the financial world. The situation is creating a great sense of alarm across the globe.
Of immediate concern to us assembled here is the type and effectiveness of the responses the UN will give to these troubling challenges, especially the financial crisis. Those responses will determine the relevance of the Organization to the diverse economic interests of the entire world.
Given the depth and systemic nature of the crisis, it is imperative for all of us worldwide to work together in addressing the crisis. Every single entity must avoid the go-it-alone protectionist trade strategies that worsened conditions during the Great Depression of the 1930s. We are pleased to witness the G-7’s recently commitment in demonstrating unity and togetherness to deal with the crisis. We also welcome the G-20 finance officials’ pledge this weekend to work together to overcome the financial turmoil, and to deepen cooperation to improve the regulation, supervision and the overall functioning of the world's financial markets.
But it must not stop there.
It must be our task in the Second Committee to ensure that the UN’s role makes a difference. The United Nations’ effectiveness will depend on measures undertaken at the national level. Our primary responsibility, therefore, is to ensure that our macroeconomic fundamentals are properly managed. This will require good governance at the international level. The international financial system should be so finely tuned that it can anticipate and avoid financial crises, whenever possible. In this regard, ASEAN member countries welcome the suggestion to hold a special session on the financial crisis.
Like others in this room, ASEAN is concerned at the global financial maelstrom currently surrounding us. At the national level, we view that a two-pronged attack must be taken in the form of prudent fiscal and monetary policies, in addressing this crisis. We also note the importance of enhancing financial and regulatory frameworks.
ASEAN’s economic fundamentals remain sound, in part reflective of the significant reforms undertaken since the 1997 financial crisis. We have also effectively responded to rising inflation with appropriate macroeconomic policies.
The strong capitalization of banking and financial institutions in the region, relatively low loan to asset ratios in mortgage financing, and their limited direct exposure to the deterioration in the US and other affected credit markets, constitute important strengths. These strengths also ensure that the regional financial systems continue to perform their intermediation function efficiently.
ASEAN is also moving expeditiously towards implementing the Chiang Mai Initiative (CMI) Multilateralization facility in the first half of 2009. Building on the existing bilateral swap arrangements, this provides short-term liquidity support through a self-managed reserve pooling arrangement. We are also pressing ahead with other regional integration and cooperation initiatives.
Further, members of ASEAN also agreed to strengthen the capacity of the ASEAN Secretariat by setting up a new high-level Macroeconomic and Finance Surveillance office. It will play an important and effective role in facilitating initiatives to boost regional financial stability and accelerate regional integration.
For South East Asia, today’s crisis, as it did in 1997/98 indicate the urgent need to reform the international financial architecture. We view developing countries should be empowered to regulate capital flows to protect themselves against volatilities in financial flows. Perhaps the current financial crisis and the upcoming review conference of the Monterey Consensus will lead us in this path.
The threat of a global recession, as a result of various crises has heightened ASEAN concerned over the continued impasse at the Doha Round trade talks. We should not allow further delays in finalizing an outcome of the Doha Round that would open new markets, especially for developing countries.
The imperative to deliver a strong Doha Round development outcome has never been more urgent. The responsibility for delivering an outcome rests with all Members, but none more so than on the major players. This is the time for resolve and leadership.
ASEAN also strongly supports the Lao PDR’s early accession to the WTO. Acceding as an LDC, we emphasize Lao PDR eventual commitments shall correspond to such status.
Resolve and leadership is also central to ensure success in the review of the Monterey Consensus on financing for development. The timing of this review is opportune and unique. The international community must not delay to identify obstacles and constraints, as well as actions and initiatives required to overcome concern in financing for development. This should include addressing systemic issues in the international financial sector.
The recent weeks has also seen the intensification of efforts by the international community to jump-start attempts to achieve the MDGs by the prescribed target dates. ASEAN fully supports this as well as all efforts to promote economic growth worldwide, the necessary condition for attaining the MDGs.
We believe that the measures taken by ASEAN are a good example of regional approaches to achieving the MDGs. One of the key purposes of ASEAN is the promotion of a people-oriented ASEAN. This clearly highlights the very strong emphasis that ASEAN places on the social dimensions of development in particular alleviating poverty and narrowing the development gap.
In view of this, ASEAN is now working towards an MDG-Plus concept in which the MDGs will be transformed into the `floor’ instead of a `ceiling’ for human development. The MDG-Plus approach is the appropriate way forward for ASEAN, as the region overall has been assessed to be on-track to meet the poverty reduction target by 2015.
ASEAN is also fully cognizant that the MDGs can only be achieved with the full involvement and engagement of all stakeholders. Therefore, promoting the full awareness and understanding of is necessary. For this reason, among others, we welcome the creation of the ASEAN Regional Centre of Excellence on MDGs in Bangkok.
As many of the members of ASEAN are also exporters of commodities, benefiting more fully from the high prices of commodities is critical in their effort to achieve the MDGs. We, therefore, believe that the Second Committee should also focus on this issue, particularly on the issue of market access.
The past year has witnessed the continued efforts by the members of ASEAN to further strengthen the dynamism of the region, a key factor if the MDGs are to be achieved. The most important milestone in this regard was the signing of the ASEAN Charter at the 13th ASEAN Summit in Singapore in November last year. This will transform ASEAN from a loosely governed coalition to one with a legal personality and adherence to a rules based approach.
All these measures and initiatives, Madam Chair, clearly demonstrate ASEAN’s firm commitment to progress. Of course, global partnership is imperative for success. Such partnerships will serve the common interests of all stakeholders, including the major economic players.
I thank you.
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