NO.025

APEC FINANCE MINISTERS’ MEETING

I am pleased at the success of the APEC Finance Ministers’ meeting held over the weekend in Langkawi, Malaysia, and the advance made on a number of key points Australia has advocated.

Ministers saw grounds for optimism in the regional economy. Growth is expected to pick up this year in the crisis-affected Asian economies. Growth has also been maintained in China, and economic conditions in the United States remain buoyant. Most other APEC economies have managed to adjust to the crisis, although not without hardship, in some cases very severe hardship. Throughout the crisis, the Australian economy has remained exceptionally strong.

Nevertheless, Ministers recognised the need not to become complacent and that continued efforts are needed to sustain growth and to progress necessary reforms.

The meeting also focussed discussions on global financial reforms. Ministers called for the establishment of an ongoing mechanism for inclusive dialogue between industrial, developing and emerging market economies to build consensus on major economic and financial issues. This might be broadly along the lines of the former G22 group.

The meeting also discussed the issue of disclosure by highly leveraged institutions (including hedge funds). This is an issue that Australia has pursued as a consequence of the Report of the Taskforce on International Financial Reform which I chaired last year. Further work on this issue is being taken up in a working group of the International Financial Stability Forum. Australia will be represented on the working group.

Australia has also put forward proposals that could contribute to management of financial crises by ensuring orderly arrangements amongst private sector lenders. Ministers agreed, on Australia’s initiative, to ask the APEC Financiers Group to examine and report on proposals for a greater private sector role. Further work will also be undertaken in the IMF on this issue.

APEC Finance Ministers accepted a tangible Australian contribution to improving institutional frameworks in Asian economies. Building on our hosting of an APEC symposium on corporate governance in Sydney late last year, we offered to host a joint APEC-OECD symposium this year on effective insolvency regimes. This offer will now be considered at the forthcoming Ministerial Council meeting of the OECD.

We also took the opportunity to extend relevant Australian corporate governance training opportunities open to those in our region and we announced a range of other Australian training initiatives in the corporate governance area, including an offer by the Australian Securities and Investments Commission to conduct walk through’ training tours of the institutions that constitute the Australian corporate governance system.

Australia has offered assistance to build institutional capacity amongst countries in the region to strengthen the financial system, and so increase growth and help to raise living standards.

LANGKAWI

16 May 1999