Sixth Meeting of the Manila Framework Group The Sixth Manila Framework Group Meeting was held on 20-21 March 2000 in Hong Kong SAR. Senior finance and central bank officials from 14 member economies1 and senior representatives from the International Monetary Fund (IMF), the World Bank (WB), the Asian Development Bank (ADB) and the Bank for International Settlements (BIS) attended the meeting. The Group welcomed the better-than-expected improvement in the economic outlook of most Asian economies. They stressed the importance for industrial economies to ensure an environment conducive to sustained and broad-based growth in the region. The Group noted the continued strong non-inflationary growth in the United States and emphasised the need to monitor developments in global equity markets. In Japan, the economic recovery remained fragile although there were encouraging signs of growth in business investment and improvement in corporate profitability. The Group emphasised the importance for Japan to maintain accommodating fiscal and monetary policies until recovery is firmly established. The Group also noted continued solid growth in China, accompanied by progress in the reform of state-owned enterprises and the financial sector. The Group was encouraged by China's prospective entry to the WTO, which is expected to be conducive to the growth of international trade and investment. The Group discussed the macro-economic policies of crisis-affected economies in the region. As their recoveries become firmly established, fiscal consolidation would be necessary to avoid unsustainable increases in public sector indebtedness. The Group discussed exchange rate developments and their implications for monetary policies in the region. The Group also reviewed the structural reforms in the crisis-affected economies. The Group noted the progress on bank and corporate sector restructuring, strengthening of regulatory infrastructure, and improvements in insolvency procedures and corporate governance. Notwithstanding the improvements in the growth outlook and the early signs of the return of international capital to the region, there is no room for complacency. The Group welcomed the commitments of these economies to continue with the restructuring of their financial and corporate sectors. The Group also emphasised the importance of social safety nets in support of reform efforts. The Group noted the progress made by various international fora to strengthen the international financial architecture, including the work of the IMF, the Financial Stability Forum and its working groups, and the G-20. In particular, the Group recognised the importance of enhanced transparency for the public and private sectors and reviewed the work underway on appropriate codes and standards for both sectors, including the role of national ownership of these initiatives. The Group also welcomed the measures and recommendations to improve counterparty risk management and to enhance disclosure by highly leveraged institutions and other large financial market participants. The Group noted the importance of sound liability management by the private and public sectors. The Group had an exchange of views on the recent efforts to streamline the IMF's financing facilities and on the work to better involve the private sector in crisis prevention and resolution and also discussed the need to review the IMF's quota allocation in order to better reflect the economic realities of the world today. The Group also urged the continuation of the work to improve the stability and functioning of the international financial system, with continuing close co-operation between industrial economies and emerging market economies. The Group recognised the importance of monitoring and understanding cross-border capital flows and the resulting stock positions. The Group called for greater cooperative efforts by individual economies and the international financial institutions to improve the frequency, timeliness and comprehensiveness of data. The Group agreed to hold the next Manila Framework Group meeting in Thailand in the second half of November 2000. The Group thanked the HKSAR Government for its warm hospitality and excellent arrangements. 21 March 2000 1The 14 member economies of Manila Framework Group are Australia, Brunei Darussalam, Canada, China, Hong Kong SAR, Indonesia, Japan, Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and the United States of America. The Group, which meets twice a year, was set up in November 1997 after the eruption of the Asian financial crisis. The purpose of the meeting is to provide a forum to discuss issues affecting financial stability in the region |