ASEAN, Japan, China and South Korea provide funding for pandemics and disasters

TBILISI (Kyodo) – The Association of Southeast Asian Nations plus Japan, China and South Korea agreed Friday to provide each other with funds in times of need, such as pandemics and natural disasters, building on their existing currency swap agreements for the U.S. dollar and its counterparts .

The finance ministers and governors of the central banks of the Asian countries met on the sidelines of the events organized by the Asian Development Bank in Tbilisi, Georgia, at a time when the dollar has gained strength against its counterparts after aggressive monetary tightening to combat inflation.

A strong dollar means a higher debt burden for countries holding dollar-denominated debt.

“Asia is prone to natural disasters and ASEAN countries in particular have had high hopes for the new facility that would allow us to respond quickly to external shocks,” Japanese Finance Minister Shunichi Suzuki told a news conference after the meeting.

“Our agreement on the launch is a major achievement,” he said, citing the need for cooperation to ensure financial stability.

The ‘ASEAN Plus Three’ group had agreed to expand their safety net under the Chiang Mai Initiative, established in the wake of the 1997 Asian financial crisis, to provide emergency liquidity.

The COVID-19 pandemic has increased the need to respond more quickly to financing needs and boost financial cooperation between the group.

Separately, the financial leaders of Japan, China and South Korea held a meeting to discuss the financial situation.

Japan and 11 Pacific island nations also held their first finance ministers’ meeting ahead of their July leaders’ summit in Tokyo, covering a range of topics from climate change to debt sustainability.

ASEAN includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.