The Asia Co-operation Dialogue (ACD) produced its first concrete result Sunday when 11 members of a new US$1 billion Asian Bond Fund pledged to speed development of a regional bond market.

Founding countries of the Thai initiative say the new fund, drawn from their huge central bank reserves, will improve the efficiency of the bond market and help woo back Asian assets invested outside the area.

"The creation of the Asian Bond Fund and the Asian Bond market represents the new architecture of the world of differences,'' said Thai Prime Minister Thaksin Shinawatra at the close of the meeting.

'It is a powerful instrument, which will enable surplus capital from one Asian country to create wealth in another.''

The Asia Bond Fund, launched earlier this month by the Executives' Meeting of East Asia-Pacific Central Banks Group, will have an initial size of about 1 billion US dollars and will be invested in a basket of US dollar denominated bonds.

While the fund may still be small, given that Asia holds about two-thirds of global foreign reserves, the agreement by 11 of the 18 ACD members may be a sign it is achieving its goal of bringing those countries closer.

The amount in the fund could double. India, which has record foreign exchange reserves of around US$75 billion, said it was interested in putting in US$1 billion after conducting a study, Thai Foreign Minister Surakiart Sathirathai told a news conference.

The ACD's other step forward came when 14 members volunteered to take the lead in 17 region-wide co-operation projects. China agreed to spearhead an agricultural co-operation project, while other countries such as Japan, India, Singapore and Thailand will take prime responsibility for environmental, biotech, tourism and business co-operation projects.

Chinese Minister of Foreign Affairs Li Zhaoxing stressed Sunday at the meeting that China will push ahead in forging co-operative ties among Asian countries.

The minister noted that since its establishment one year ago as a forum for co-operation and dialogue, the ACD had enhanced the Asian countries' sense of co-operation.

As the leader of the ACD's farming project, China was keen to share its experience in agricultural development with Asian countries to advance the industry in the region, Li Zhaoxing said.

Li also said the ACD should co-ordinate with other regional forums to enhance co-operation and dialogue between Asian nations.

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