US$1b new fund ready for bond market ( 2003-06-23 07:52) (China Daily)
The Asia Co-operation Dialogue (ACD) produced its first concrete result
Sunday when 11 members of a new US$1 billion Asian Bond Fund pledged to speed
development of a regional bond market.
Founding countries of the Thai initiative say the new fund, drawn from their
huge central bank reserves, will improve the efficiency of the bond market and
help woo back Asian assets invested outside the area.
"The creation of the Asian Bond Fund and the Asian Bond market represents the
new architecture of the world of differences,'' said Thai Prime Minister Thaksin
Shinawatra at the close of the meeting.
'It is a powerful instrument, which will enable surplus capital from one
Asian country to create wealth in another.''
The Asia Bond Fund, launched earlier this month by the Executives' Meeting of
East Asia-Pacific Central Banks Group, will have an initial size of about 1
billion US dollars and will be invested in a basket of US dollar denominated
bonds.
While the fund may still be small, given that Asia holds about two-thirds of
global foreign reserves, the agreement by 11 of the 18 ACD members may be a sign
it is achieving its goal of bringing those countries closer.
The amount in the fund could double. India, which has record foreign exchange
reserves of around US$75 billion, said it was interested in putting in US$1
billion after conducting a study, Thai Foreign Minister Surakiart Sathirathai
told a news conference.
The ACD's other step forward came when 14 members volunteered to take the
lead in 17 region-wide co-operation projects. China agreed to spearhead an
agricultural co-operation project, while other countries such as Japan, India,
Singapore and Thailand will take prime responsibility for environmental,
biotech, tourism and business co-operation projects.
Chinese Minister of Foreign Affairs Li Zhaoxing stressed Sunday at the
meeting that China will push ahead in forging co-operative ties among Asian
countries.
The minister noted that since its establishment one year ago as a forum for
co-operation and dialogue, the ACD had enhanced the Asian countries' sense of
co-operation.
As the leader of the ACD's farming project, China was keen to share its
experience in agricultural development with Asian countries to advance the
industry in the region, Li Zhaoxing said.
Li also said the ACD should co-ordinate with other regional forums to enhance
co-operation and dialogue between Asian nations.