ASEAN Finance Ministers met in the Vietnamese city of Danang and reaffirmed their commitment to further strengthen economic and financial cooperation in the region, amid soaring food prices and deteriorating global conditions that are expected to hurt growth across the region.

The continuing turmoil in financial markets and weak global economy are now likely to slow regional GDP growth. The ASEAN Secretariat estimated a growth of 6.2% in 2008 from 6.7% last year. Having resolved to counter the risk of a sharper than expected slowdown in global economy, the ministers also vowed to remain vigilant against surging food and energy prices to the region. 

“We discussed the rising global commodities and energy prices and noted the importance to strengthen our regional initiatives on food security and energy security to safeguard our sustained economic growth and development,” they said in a joint statement released after the meeting.

The Secretary-General of ASEAN, Dr. Surin Pitsuwan, who joined the ministers in the meeting, acknowledged that mounting food and fuel prices present greater challenge to policy makers because of aggregate loss in real incomes in the region. “Obviously, the fact that many ASEAN economies are still developing, high food prices will put the poor people in those countries in precarious conditions.” 

Amid global uncertainties, Dr. Surin also said that the scope for regional cooperation and policy coordination is important, particularly the need to deepen trade and financial integration in ASEAN. “Given that economic spill over seems to be a natural consequence of highly interdependent global economy, ASEAN cannot afford to lose the momentum for integration. In the area of finance, the ASEAN Secretariat is going to play a greater role in coordinating various initiatives to promote financial stability in the region.”

In addition to discussing the impact of global slowdown and high prices on the region, the ministers also discussed the progress of ASEAN finance cooperation, including initiatives on capital market development, liberalisation of financial services, capital account liberalisation, cooperation in customs and insurance, anti-money laundering, infrastructure financing and economic surveillance mechanism.