Hanoi: South-east Asian governments should prepare to wind down economic stimulus measures brought in during the global financial crisis, according to a draft summit statement seen by AFP on Wednesday.
In the document, the leaders of Association of Southeast Asian Nations (Asean) countries said they were confident the support measures could be phased out without damaging economic recovery.
“We affirm the need to start working on mechanisms to reverse the fiscal and monetary stimulus and then phase out these policy accommodations,” said the statement, due to be issued on Friday after a two-day Asean summit in Hanoi, Vietnam.
The draft gave no timescale but said the leaders are “fully confident that at the appropriate time we will be able to do so effectively to ensure sustained recovery and development”.
Asean groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam—a combined market of almost 600 million people.
The bloc’s export-dependent economies were battered by the financial crisis that began in the US in late 2008 and lasted well into last year.
Like the rest of Asia, Asean governments rolled out massive economic stimulus packages and policies to boost domestic spending and eased credit lines to help the region emerge from the crisis better than expected.
The draft said that as market conditions improve and regional economies begin to recover, governments must reconsider support mechanisms.
“We will maintain monetary and fiscal support while preparing for an orderly unwinding of expansionary policies until the recovery is on a firm footing,” the draft said.
The statement also pledged to continue cooperation to restore the “health of financial systems” and to boost monitoring procedures to spot problems at an early stage.
“We have been affected less by the global crisis. We have now emerged out of the crisis very, very firmly and very impressively,” Asean secretary general Surin Pitsuwan told reporters on Wednesday.
Malaysia last month hiked its key rate for the first time in almost four years after the economy emerged from recession.
“Economic integration is...vital for Asean,” said Ernest Bower, a South-East Asia specialist at the Center for Strategic and International Studies in Washington.
He said in a commentary that the bloc is the world’s most trade-dependent group of countries, which “lives or dies on the dynamism of trade and depends on investment to fuel growth”.