Economic Policy And Finance
A - Overview
The following two areas have become especially important in recent years in this context.
a. Preventing a recurrence of financial crisis
b. Fiscal management.
1. Preventing a recurrence of financial crisis
Until the Asian financial and economic crisis of 1997, the performance of the economies of ASEAN had been described as the “Asian miracle.” The crisis robbed large numbers of people in these economies of both assets and jobs. The fragility of financial systems in ASEAN countries has been identified as one of the causes of Asia’s financial and economic crisis. Financial systems need to be strengthened in order to prevent future financial crises.
2. Fiscal management
In recent years, aid implementation agencies have recognized the importance of fiscal management in developing countries. The aim of improvements in this area is to increase revenues, efficiently allocate resources to strategic areas such as poverty reduction, and ensure that funds are spent effectively and efficiently, while maintaining fiscal order.
B - Our Efforts
Technical cooperation in the area of economic policy and finance traditionally centered on the provision of know-how, such as the introduction of modern fiscal and monetary systems. However, two events in the 1990s prompted us to become more fully involved in the provision of support in this area.
The first of these was the transition of former socialist countries to market economies in the late 1980s and early 1990s. The shift to market economies required radical changes in economic policies, systems, and organizations. Support for this process became a key priority.
The second factor was the Asian financial and economic crisis of 1997. Since the crisis, we have upgraded support for the reinforcement of financial systems through the improvement of institutions and the development of human resources.
With this background, we provide the following cooperation in the area of economic policy and finance:
1) Reinforcement and stabilization of fiscal systems
2) Stabilization and reinforcement of financial systems
3) Development of a macroeconomic management infrastructure.
Among the above, the number of projects in the area of fiscal systems is the largest, accounting for approximately 50% of total projects, followed by projects in the area of financial systems at 30%.
Countries in ASEAN and East Asia account for 80% of the target regions of cooperation in the area of economic policy and finance. However, there is a tendency to reinforce efforts in the African region, primarily in the area of fiscal management.