The Second Manila Framework Meeting
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| 1. | Finance and Central Bank Deputies representing Australia, Brunei Darussalam, Canada, People's of China, Hong Kong SAR of China, Indonesia, Japan, Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand and the United States met in Tokyo on 26-27 March 1998 to review progress in addressing the present crisis, and preparing the ground for sustainable growth in the future. High-level representatives form the International Monetary Fund, the World Bank and the Asian Development Bank also attended the meeting.
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| 2. | In the regional surveillance discussion, Deputies exchanged views on the economic situation of the region on the basis of presentations by the IMF, the World Bank and the Asian Development Bank. Overall, Deputies felt that substantial progress had been made toward a resolution of the Asian financial crisis, although important policy challenges remained. Growth forecasts for the region had been lowered in the wake of the Asian crisis, reflecting declines in consumption, investment, trade and capital flows to the region. Deputies re-emphasized the need for economies in the region to adopt, and sustain, sound economic and financial policies, coupled with appropriate structural reforms.
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| 3. | Discussion focused mainly on progress under economic adjustment programs agreed with the IMF in Thailand, Korea, and Indonesia, but also reviewed developments across the region. Deputies noted that the economic situation in Korea and Thailand had improved as a result of the vigorous and sustained implementation of policy measures in their programs. The position in Indonesia remained more challenging. Deputies looked towards agreement between the Indonesian authorities and the IMF to stabilize its economy and to put it put it back on track towards sustained growth. Deputies welcomed the comprehensive approach being taken to the macroeconomic policy framework, financial system, and structural issues, and stressed that corporate debt remained one of the key issues that required to be addressed expeditiously.
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| 4. | Deputies discussed various lessons from the Asian crisis. They noted the crucial role of the IMF and MDBs in support of the countries in crisis and discussed how it could be made more effective. In this context, and in the light of the request by this Group at its last meeting, they welcomed the new facility (the "Supplemental Reserve Facility") that the IMF had established last December, and which was successfully used in the Korean program. Deputies also discussed the challenge of economic management in the context of globalized capital markets and noted the importance of strengthening the monitoring of capital movements.
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| 5. | Deputies recognized their common interests in continuing discussion on issues such as these, and other issues relevant to strengthening the architecture of the international financial system. They agreed that the Manila Group provided a useful forum through which frank and open discussion could provide mutual surveillance and assistance in maintaining sound economic and financial policies.
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| 6. | Malaysia agreed to host the next meeting of this forum in the second half of this year. The IMF agreed to continue providing technical support as Secretariat for this forum, in coordination with the host country.
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| 7. | Deputies unanimously thanked the Japanese Government for its warm hospitality and excellent arrangements. |
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