Evolving ASEAN+3 ERPD

Evolving ASEAN+3 ERPD:
From Peer Reviews to Due
Masahiro Kawai
Asian Development Bank Institute
The First OECD-Southeast Asia Regional Forum
“Peer Review Mechanism for Policy Reform”
Organized by OECD
Jakarta, 23-24 January 2007
1. Key Issues
2. ASEAN+3 Finance Ministers’ Process
3. ASEAN+3 Economic Review and
Policy Dialogue (ERPD)
4. Three Levels of Policy Dialogue
5. Role of Private Sector Assessments
6. Enhancing ASEAN+3 ERPD
7. Challenges Ahead
Introduction: Key Issues
• What is peer review in East Asia?
• What should be its objectives?
• How does the ADB contribute?
• Is there a role for the private sector?
• What are the major challenges for
improving ASEAN+3 ERPD?
Finance Ministers’ Process
• Origins in 1997-98 Asian Financial Crisis
• Key Initiatives:
– Chiang Mai Initiative (CMI)
– Economic Review & Policy Dialogue (ERPD)
– Asian Bond Markets Initiative (ABMI)
Key elements
Recent Decisions
• Finance Ministers’
• Integrate ERPD & CMI
• Finance & Central
Bank Deputies’
• National Surveillance
• Collective decisionmaking for CMI
• Launch GOE and ETWG
• Study ways to evolve
Three Levels of Policy Dialogue
• Good economic
management needs:
- objective economic
- identification of risks
and vulnerabilities
- analysis of policy
- implementation of
desirable policies
1. Peer reviews and
peer pressure
2. Information sharing
3. Due diligence
- assessments of
potential “borrowers”
- ability to pay, solvency
& credit worthiness
Role of Private Sector Views
• Provide additional perspective
– Strengths (e.g., frank assessments)
– Weaknesses (e.g., sometimes myopic)
• Affect economic performance
– Move markets
– Influence business decisions
• Important input for Policymakers
– Methodology (e.g., due diligence)
– Views
Enhancing the Effectiveness of
Clarifying objectives
From “information sharing” to “peer reviews”
Possible need for due diligence
Focus on Structural Issues
Maintain sense of ‘peer review’ among equals
Greater institutionalization of ERPD desirable
– Central Bank Governors and the private sector
– Strong professional secretariat for objective routine
surveillance and possible due diligence assessment
Conclusion: Challenges Ahead
• ASEAN+3 ERPD is in its infancy as “peer
review” but is integral to regional cooperation.
• ADB supports the ASEAN+3 FM process,
including ERPD.
• Integration of ERPD & CMI requires evolution
from “information sharing” to “peer reviews” to
“due diligence”.
• Institutionalizing ERPD by involving all key
players and ensuring technical competence
Thank you
For more information:
Dr. Masahiro Kawai
Dean, Asian Development Bank Institute
[email protected]
+81 3 3593 5500

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