Presentation by Ambassador Manaspas Xuto Executive Director

1. Presentation by Ambassador Manaspas Xuto Executive Director International Institute for Trade and Development (ITD) “The Relevance of Asia Cooperation Dialogue and the Asian Bond” International Conference on “Building a New Asia : Towards an Asian Economic Community” 10-11 March 2003, New Delhi

2. Why ACD? • Negative impacts of 1997 Economic Crisis and the Global Economic Downturn • Despite their great potentials and inner strengths, Asian countries have not effectively and collectively utilized them to their fullest benefits. • Despite various regional and sub-regional groupings, no Asia-wide cooperation has existed to unite the whole continent

3. Core Values of ACD • “Missing link” • Positive thinking • Non-institutionalized • Top-down • Evolving • Inclusive • Result-oriented

4. Objectives of ACD • Combine Asian strengths • Enhance competitiveness of Asian countries • Focus on economic cooperation and set aside sensitive or unresolved political matters among members • Avoid duplication of already existing activities in the region • Make Asia a better partner for our counterpartsaround the world

5. Cooperation Asia Dialogue 1st ACD Retreat, Cha-Am, Thailand, 18-19 June 2002 1st Ambassadorial Retreat, 2 July 2002 ACD Breakfast Meeting, 14 Sept. 2002, New York 2nd Ambassadorial Retreat, 23December 2002 2nd ACD Retreat, 21-22 June 2003, Chiang Mai Poverty Alleviation (Bangladesh / Cambodia / Vietnam) Energy Security (Bahrain / Indonesia) Agriculture (China) Biotechnology / Transport linkages (India) E-commerce / Infrastructure Tax (Malaysia) E-commerce / E-government / Institute of Asian Standards (Pakistan) SMEs (Singapore) IT Development (Republic of Korea) Energy / Science & Technology (Philippines) Tourism (Thailand / Cambodia) Working Group on Financial Cooperation (Thailand) Human Resource Development (Vietnam) Bahrain Bangladesh Brunei Darussalam Cambodia China India Indonesia Japan Republic of Korea Laos Malaysia Myanmar Qatar Pakistan Philippines Singapore Thailand Vietnam

6. Why Asian Bond ? • To solve the problem of Asia’s over-reliance on foreign banking systems and short-term borrowing from abroad which mainly led to the 1997 financial crisis • To utilize a large portion of the total combined international reserves of Asia for the maximum benefits of the region • To allow Asian financial institutions to better prepare themselves for risk management and to resolve problems of liquidity by selling bonds • To provide alternatives for investment of Asian countries

7. Development of Asian Bond Market Product Asian Bond Fund Capital market development Regional BondMarket Development Credit Guarantee Arrangement Development of Securitization Risk Management Regional Clearing & Settlement System Component 1. Demand Side 2. Supply Side 3. Infrastructure Forum EMEAP ASEAN + 3 APEC FMM

8. ACD as the “missing link” to providepolitical impetusto the existing Asian Bond process 2nd ACD Retreat in June 2003 “Political launch” of the Asian Bond concept

9. Timeline for Asian Bond ACD Chiang Mai Declaration on Asian Bond Market Development 22 June 2003 May June September ASEAN + 3 Endorse- ment 21-22 May 03 APEC FMM 4 Sept. 03 EMEAP Meeting Early June 03 Asian Bond Fund Launch May 2003 ACD WG on Financial Cooperation May 03

10. THANK YOU