© 1997 International Monetary Fund


© 1997 International Monetary Fund

Design and production: IMF Graphics Section

Library of Congress Cataloging-in-Publication Data

Macroeconomic issues facing ASEAN countries / John Hicklin, David Robinson, Anoop Singh, editors.

p. cm.

Includes bibliographical references.

ISBN 1-55775-637-6

1. Asia, Southeastern—Economic conditions—Congresses. 2. Asia, Southeastern—Economic policy—Congresses. I. Hicklin, John, 1953-. II. Robinson, David, 1958-. III. Singh, Anoop.

HG441.M32 1997




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  • Foreword

  • Acknowledgments

  • 1 Overview

    • John Hicklin, David Robinson, and Anoop Singh

  • I. Overall Agenda

  • 2 Opening Remarks

    • Mar’ie Muhammad

  • 3 Sustaining Macroeconomic Performance in the ASEAN Countries

    • Michel Camdessus

  • II. Savings, Investment, and the Current Account

  • 4 Are Current Account Imbalances in ASEAN Countries a Problem?

    • Jonathan D. Ostry

  • 5 Indonesia’s Fiscal Position: Sustainability Issues

    • Geoffrey Bascand and Assaf Razin

  • 6 Philippine Fiscal Policy: Sustainability, Growth, and Savings

    • Philip Gerson and David Nellor

  • 7 Saving in Southeast Asia and Latin America Compared: Searching for Policy Lessons

    • Anuradha Dayal-Gulati and Christian Thimann

  • III. Monetary Policy, Financial Liberalization, and Capital Market Development

  • 8 Financial Liberalization and Money Demand in ASEAN Countries: Implications for Monetary Policy

    • Robert Dekle and Mahmood Pradhan

  • 9 Capital Market Development and the Monetary Transmission Mechanism in Malaysia and Thailand

    • Tim Callen and Patricia Reynolds

  • 10 Indonesian Financial System: Its Contribution to Economic Performance and Key Policy Issues

    • John Montgomery

  • 11 Exchange Rate Policy and Macroeconomic Management in ASEAN Countries

    • Peter J. Montiel

  • IV. Medium-Term Outlook

  • 12 ASEAN in the World Economy

    • Flemming Larson and Jahangir Aziz

  • 13 ASEAN in a Regional Perspective

    • Jeffrey A. Frankel and Shang-Jin Wei

  • 14 Growth and Productivity in ASEAN Countries

    • Michael Sarel

  • Conference Program

The following symbols have been used in this book:

… to indicate that data are not available;

– between years or months (e.g., 1995–96 or January–June) to indicate the years or months covered, including the beginning and ending years or months; and

/ between years (e.g., 1996/7) to indicate a fiscal (financial) year.

“Billion” means a thousand million.

Minor discrepancies between constituent figures and totals are due to rounding.

The term “country,” as used in this volume, does not in all cases refer to a territorial entity that is a state as understood by international law and practice; the term also covers some territorial entities that are not states, but for which statistical data are maintained and provided internationally on a separate and independent basis.


In recent years, the performance of the ASEAN countries has been subject to renewed debate. While their impressive growth record has been sustained well into a third decade, new challenges have emerged. These challenges have arisen partly from a fast-changing international economic environment, involving the global integration of goods and capital markets. The ASEAN countries have been among the first to take considerable advantage of the new opportunities afforded by these trends, but, at the same time, policymakers in these countries have faced new complexities in managing their economies.

A number of key macroeconomic issues are involved in the debate about the recent performance, policies, and prospects of the ASEAN countries. To examine these issues, the IMF and Bank Indonesia organized a conference in Jakarta on November 7-8, 1996, which attracted a distinguished set of speakers and participants drawn from senior policymakers, academics, and private sector representatives across Asia. As background, the IMF staff prepared, or coordinated the preparation of, a number of papers on selected aspects of macroeconomic policy and management. This volume contains these papers, as well as an overview of the discussion at the conference, and should add to the understanding of ASEAN issues by observers and scholars in Asia and other parts of the world.

A large number of persons in Bank Indonesia and in the IMF contributed to the success of the conference, and we convey to all of them our thanks.

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The conference provided senior officials of the ASEAN region, academics, private sector representatives, and IMF staff with a very useful forum for exchanging views. Its success owed much to the support, hard work, and dedication of a large number of people in both Bank Indonesia and the IMF. While it is impossible to list them all by name, we would particularly like to thank Soedradjad Djiwandono, Governor of Bank Indonesia, and Kunio Saito, at the time Director of the IMF’s Southeast Asia and Pacific Department, for their overall encouragement and support. Bank Indonesia Managing Director Boediono oversaw all aspects of the excellent arrangements and warm hospitality extended to participants during their stay in Jakarta, and was supported in this by Burhanuddin Abdullah, who chaired Bank Indonesia’s organizing committee. Within the IMF, Christopher Morris played a central role in organizing arrangements from Washington. Our thanks also go to all the authors of the papers produced for the conference, Christopher Browne and many other IMF staff who provided invaluable comments on the papers, and the participants in the sessions. The views expressed are those of the authors and should not be attributed to the institutions with which they are affiliated.

This volume containing the background papers produced for the conference is being brought out as a joint effort of the IMF’s Asia and Pacific Department and the Regional Office of Asia and the Pacific, and we are grateful to their Directors, Hubert Neiss and Kunio Saito, for their support of the endeavor. We are also indebted to Elisa Diehl of the IMF’s External Relations Department, who worked hard to prepare the volume for publication in time for the thirtieth anniversary of ASEAN.