ASEAN FUND

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During the year, the ASC completed the design of a new structure for the ASEAN Fund to make it more responsive to the requirements of project financing in ASEAN. The ASEAN Fund would initially consist of $6.0 in contributions of $1.0 million from each Member Country. For purposes of this initial contribution, each Member Country would transfer to the ASEAN Secretariat, its contribution of US$ 1.0 million held in its National Funds as part of its commitment under the 1969 Agreement for the Establishment of a Fund for ASEAN. Contributions made by each Member Country to the Fund would be paid into an account under the name of the ASEAN Fund, which would be under the custody of and administered by the ASEAN Secretariat.

The ASEAN Fund would consist of two accounts : The Seed Fund Account and the Projects Fund Account. The Seed Fund Account would initially consist of 80% (US$4.8 million) of the total contribution of $6.0 million; while the Projects Fund Account would consist of the remaining 20% ($1.2 million). The Seed Fund would be invested to realize income for the ASEAN Fund while the Projects Fund would provide financing for approved projects. Unless otherwise agreed upon by Member Countries, at least half of the annual income from the Seed Fund would be ploughed back to the Seed Fund; the balance would accrue to the Projects Fund.

Based on the guidelines approved by the 3rd Meeting of the 27th ASC, the Fund could be made available to support ASEAN collaborative projects which meet the following criteria:

1. The projects must promote ASEAN cooperation or the ASEAN perspective, consistent with ASEAN Summit decisions;
   
   
2. The projects must be of a confidential or strategic nature. These include activities which may lead to the formulation of an ASEAN stand or position on issues of common interest to Member Countries; those which involve the acquisition or processing of strategic information; those involving the acquisition of applied technology; those involving joint marketing studies or approaches; as well as promotional activities, among others; and
   
   
3. The projects which do not qualify for funding under Dialogue Partner facilities or could be only partially supported by Dialogue Partner facilities.

The ASEAN Standing Committee (ASC) would have overall responsibility for the ASEAN Fund at the policy level and would approve projects seeking support from the Fund. At the operational level, the ASEAN Fund would be managed by a Management Committee (MC) composed of finance and other officials from all ASEAN Member Countries. The Meetings of the MC would be chaired by the Secretary-General of ASEAN or the Deputy Secretary-General. The ASEAN Secretariat would provide technical support to the MC.