NAYPYIDAW, Myanmar - Southeast Asian finance ministers are "vigilant" in the face of economic risks such as reduced US monetary stimulus, Myanmar said Saturday at a meeting that underscored its return to the international diplomatic stage.
Officials said the 10-member Association of Southeast Asian Nations (ASEAN) was well-placed to withstand the impact of the US Federal Reserve's "tapering" of its liquidity-boosting quantitative easing programme.
"We are vigilant to global economic challenges and pledge our commitment to maintain financial stability in our region and beyond," Myanmar Finance Minister Win Shein said in his opening remarks in the capital Naypyidaw.
"We have taken concrete and bold steps in maintaining financial markets and implementing the road map for monetary and financial integration in the region," he said.
Some emerging economies, such as Indonesia, suffered sharp capital outflows and losses to their currencies after the Fed began to reduce its massive stimulus programme, as the world's largest economy emerges from a crippling financial crisis.
Under quantitative easing, the Fed "creates" money to buy government debt from financial institutions, which helps lower long-term interest rates, in theory stimulating the economy by encouraging companies and individuals to borrow.
Low interest rates in the West following the 2008-2009 financial crisis prompted investors to seek out higher returns elsewhere, such as in buoyant emerging economies such as Indonesia, the Philippines and Thailand.
With markets now turning their attention to the prospect of rising interest rates in the United States, the fear is that a rapid repatriation of investment funds could send stock markets and currencies sliding in emerging Asia.
But experts note that so far the impact has been limited, thanks partly to the region's efforts to strength its defences since the 1997-98 Asian Financial Crisis.
"The macro-economic fundamentals of ASEAN countries are strong - much stronger than in 1997," Asian Development Bank president Takehiko Nakao said at the meeting.
"Governments have pursued sound macro-economic policies. Banks are well capitalised. Financial regulations and supervisions have been strengthened. Countries now enjoy larger foreign reserves." The ADB expects the ASEAN region to show economic growth of 5.0 per cent in 2014 and 5.4 per cent in 2015, Nakao said.
"Domestic demand of ASEAN countries is solid. The US recovery continues to strengthen. The eurozone will return to positive growth this year and Japan's economy today is stronger than before," he said.
ASEAN, a region of 600 million people, wants to establish a common market and manufacturing base to better compete with China and India.
Win Shein brushed aside doubts about whether it will meet a 2015 target to create an ASEAN Economic Community, saying the region was committed to achieving its goal.
Myanmar, for years a source of embarrassment for ASEAN's more democratic states, took over the rotating chairmanship of the regional bloc this year after reforms that included freeing hundreds of political prisoners.