South Korea Sunday agreed with China and Japan that they will cooperate closely to minimize the adverse effects of their governments’ expansionary monetary policies.
The monetary policy of each government should be decided in a prudent manner and shared by the governments in a transparent manner, said a statement released by South Korean Minister Choi Kyung-hwan and his Chinese and Japanese counterparts, Lou Jiwei, and Taro Aso, after a trilateral meeting in Baku, the capital of Azerbaijan.
They also concurred that they can pursue macroeconomic policies to cope with the risks involved in the increased fluctuations of the capital flow.
Bank of Korea Gov. Lee Ju-yeol also attended the three-way meeting together with his Chinese and Japanese counterparts.
It is the first time in eight months that the financial ministers of the three Northeast Asian countries got together since September when they met on the sidelines of a Group of 20 finance ministers’ meeting in Cairns, Australia.
They also concurred they will expedite the parliamentary ratification of the ASEAN Plus Three Macroeconomic and Research Office signed in October.
The AMRO, deemed a critical key to the operation of a regional financial safety net under the Chiang Mai Initiative Multilateralization, refers to the money pool formed in 2010 that can be tapped by its member countries in times of financial crisis.
It was launched as Asian countries agreed to set aside $120 billion to prevent financial turmoil in Asia.
The ministers fell short of discussing the launch of the Asia Infrastructure Investment Bank, a ministry official said.
“We’ve not heard any voices on the AIIB,” he said.
Choi told reporters that South Korea will likely be allowed to have up to 3.5 percent in equities in the Chinese-led regional bank.
South Korea and 56 other economies became founding members of the AIIB, which is seen as a potential counterbalance to U.S.-led multilateral lenders, such as the Asian Development Bank and the World Bank.
They will hold another round of meetings in Singapore later this month before signing the final “Articles of Agreement” for the AIIB in June.
China has offered US$50 billion to the bank, which is expected to start operations by the end of the year, with other member countries expecting to increase total funding to $100 billion.
The AIIB’s Asian members ar expected to have 75 percent of the voting rights, while the remaining 25 percent would go to non-Asian members.
Choi also said South Korea will make efforts to allow more South Koreans to get high-ranking jobs at the AIIB.
“The Chinese finance minister has agreed that a South Korean official will soon be sent to the secretariat in preparation for the AIIB launch,” he said.
Choi was against any move to introduce a supplementary budget,
saying: “We’ve already increased this year’s budget by 5.5 percentage points from last year. Therefore, it will be difficult to introduce the budget any further.” (Yonhap)
