(1) We, Ministers of the Asia Cooperation Dialogue (ACD), gathered in Chiang Mai, Thailand, on 21-22 June 2003, for the second ACD Meeting to deliberate on the framework for Asian Bond Market development,

(2) Recognizing the historic significance of Asia Cooperation Dialogue inaugurated in Cha-Am, Thailand, on 18-19 June 2002, and the commitments of the 18 member countries to enhance Asia-wide cooperation and mutual prosperity through the combined strengths and diversities,

(3) Reaffirming the core values of Asia Cooperation Dialogue, which are uniquely characterized by positive thinking, non-institutionalized and informal consultations, to forge strategic partnerships among Asian member countries as intra-regional linkages,

(4) Acknowledging the benefits of the financial regional cooperation on Asian bond market development to pursue our shared vision to establish a sound and stable financial system in the region for the prosperity of our countries and peoples,

(5) Recognizing that in an environment of increasing global interdependence, a strong and resilient domestic financial system is essential for sustainable growth,

(6) Realizing the diversity and differences in the pace and the level of development of the financial systems of member countries of Asia Cooperation Dialogue, and that the regional cooperative efforts have a significant role to promote development in domestic financial systems, through the complementarity and coherence of policy at both national and regional levels,

(7) Encouraging member countries of Asia Cooperation Dialogue to seek appropriate means of assisting the development of domestic bond market in less developed countries,

(8) Aiming to develop a strong and resilient financial system in order to prevent future economic and financial crises,

(9) Recognizing that concrete steps need to be taken to reduce the region’s vulnerability to fluctuations in international capital movements, parallel to the short-term currency swap arrangements made earlier under the Chiang Mai Initiative of ASEAN+3 (ASEAN+ China, Korea and Japan),

(10) Cognizant of the long-term benefits to financial system stability associated with the diversity and choice of alternative funding modalities,

(11) Recognizing the importance of efficient bond markets to intermediate between the high level of savings and demand for long-term investments in Asia and as one of the fundamental foundations of a strong and resilient financial system in the region,

(12) Encouraging wide variety of issuers including international organizations and government agencies in the region to issue bonds denominated in Asian currencies to contribute to the stability of the financial markets,

(13) Envisioning that the Asian Bond Fund will act as a catalyst to spur private sector investors within and outside the region to invest in Asian bond markets,

(14) Supporting the development of the new debt instruments based on long-term regional assets denominated in Asian currencies,

(15) Encouraging the efforts to improve and strengthen the regional cooperation in the areas of tax, legal system, accounting, credit guarantee and rating, clearing and settlement and regulatory frameworks to promote the development of Asian bond markets,

(16) Hereby, adopt this Declaration as the embodiment of our commitment to work cooperatively in promoting the development of efficient and sustainable Asian bond markets for the betterment of Asia and its financial system:

(17) Commit ourselves to facilitate the development of efficient and sustainable Asian bond markets by building public awareness among member countries,

(18) Cooperate on a voluntary, mutually beneficial and step-by-step basis, to lay the appropriate political support as a foundation for sustainable development of bond markets in Asia, while improving domestic laws and policies, along with the development of domestic bond market,

(19) Explore feasible ways and means of mobilizing and using resources within the region to enhance the environment suitable for issuance of quality Asian bonds and provide an environment conducive to raising the level of long-term financial market development of member countries,

(20) Explore ways of using resources to promote long-term investments within the region,

(21) Collectively pledge to maintain our full support to further exploration of the Asian bond initiative, having been undertaken by relevant fora, through market demand, supply, and infrastructure development, and 

(22) Express our deep gratitude and appreciation to the Royal Thai Government for the warm hospitality and for hosting this Chiang Mai Meeting with excellent arrangements.

(23) Adopted on this 22nd day of June 2003, Chiang Mai, Thailand.