Finance ministers from the ASEAN plus three countries agreed on Sunday to speed up the process of operationalising the Chiang Mai Initiative Multilateralization (CMIM), a regional foreign reserve pool in case of currency flow shortage.

The agreement was reached at a special meeting on Sunday in Phuket in southern Thailand in a bid to ensure the regional market stability and to foster confidence in the markets.

According to the Action Plan to Restore Economic and Financial Stability of the Asian Region agreed by the ministers, US$120 billion, instead of US$80 billion as initially proposed, will be injected into the reserve pool, or the CMIM, said Thai Finance Minister Korn Chatikavanij at a joint press conference after the one-day special meeting.

The ASEAN+3 group initiated the Chiang Mai Initiative (CMI), a bilateral currency swap arrangement in the aftermath of the 1997 Asian financial crisis in a bid to help countries tackle a possible foreign capital flow shortage.

In May 2008, the ASEAN plus three finance ministers agreed to transform the CMI to CMIM, with each country contributing a share to a common reserve fund in the scenario of a financial crisis.

The ratio of contribution between ASEAN (the Association of Southeast Asian Nations) and the plus three countries -- China, Japan and South Korea, was set at 20:80 PM, said Korn.

The five major economies in the ASEAN including Malaysia, Indonesia, the Philippines, Singapore and Thailand, will make a equal contribution and altogether take the bigger share of the 20-percent proportion, while the other smaller economies including Brunei, Laos, Cambodia, Vietnam, and Myanmar will take the rest, with the exact amount of distribution yet to be finalized, said Korn.

The ratio of contribution among China, Japan and South Korean for the 80-percent share was still under discussion, said Chinese Finance Minister Xie Xuren.

The finance ministers agreed to speed up the process in finalizing the key terms before the ASEAN+3 Finance Ministers' Meeting in Bali, Indonesia in May, said Xie.

The ministers also agreed to establish an independent regional surveillance mechanism to promote economic monitoring in the region.

The meeting also reiterated the importance of the Asian Bond Market Initiative (ABMI) among the participants.

The meeting resolves to create a new roadmap which focuses on the promotion of the issuance of local currency-denominated bonds, facilitation of demand of local currency-denominated bonds, improvement of legal framework and strengthening of infrastructure for bond markets in the region, said Korn.

The meeting reaffirmed the important role of the Asian Development Bank (ADB) in mitigating the impacts of the global financial turmoil and providing necessary capital to regional growth, by more lending on infrastructure development and trade finance in the region.

The ministers agreed for an immediate and substantial capital hike for ADB, said Korn. "We call for an early agreement on the Fifth General Capital Increase of ADB by its next Annual Meeting in May 2009," said Korn.

Sunday's Special ASEAN+3 Finance Ministers' Meeting was held ahead of 14th ASEAN Summit scheduled on February 27 - March 1 in Cha-am, central beach resort in Thailand.

(Xinhua News Agency February 23, 2009)