ASEAN puts monetary fund plan on ice<\/p>\n
By Anil Penna<\/p>\n
BANGKOK (AFP): In an abrupt about-face after just an hour of
\ntalks, Southeast Asian finance ministers put on ice an ambitious
\nplan to set up a regional version of the International Monetary
\nFund (IMF) to rescue crisis-ridden economies.<\/p>\n
Thai Finance Minister Thanong Bidaya, who enthusiastically
\ntouted the proposal going into the talks late Thursday, came out
\nsaying regional economies lacked the wherewithal to institute
\nsuch a fund.<\/p>\n
He said members of the Association of Southeast Asian Nations
\n(ASEAN) would help each other in times of crisis, but added that
\nit was too early to talk about setting up an \"ASEAN Monetary
\nFund.\"<\/p>\n
Just an hour earlier, Thanong and Philippine Finance Secretary
\nRoberto de Ocampo had outlined to reporters the plan for an AMF,
\nwith Japan as a key contributor.<\/p>\n
De Ocampo said the regional fund would be a counterpart to the
\nIMF, as the Asian Development Bank was to the World Bank, for
\nmembers to draw on in times of financial crisis.<\/p>\n
He conceded that details of the proposed fund were still to be
\nworked out, \"but in general we can begin discussing the
\npossibility of an ASEAN Fund\" which could later be enlarged into
\nan Asian Fund.<\/p>\n
Thanong said it could be used to defend regional currencies,
\nwhich have come under a wave of speculative attacks since the
\nfloat of the Thai baht on July 2.<\/p>\n
\"Japan will be a big brother to help us in this, particularly
\nwith the currency problems in the region,\" he said after a
\nmeeting with Japanese Finance Minister Hiroshi Mitsuzuka here.<\/p>\n
He said Japan had \"a huge amount of investment\" in Southeast
\nAsia that it was keen to protect from devaluation through local
\ncurrency depreciation and devaluation.<\/p>\n
There was no word on the reason for the abrupt turnaround, and
\nit was not known whether any ASEAN member had blocked the
\nproposal.<\/p>\n
But a conference source said speculators alone could not be
\nblamed for the crisis, with poor economic fundamentals such as
\nhefty current account deficits overhanging many regional
\neconomies equally to blame.<\/p>\n
The source said it was counter-productive to fight market
\nforces, noting that even a powerful currency like the German mark
\nhad declined some 20 percent against the U.S. dollar over the
\npast year.<\/p>\n
Analysts say that the regional market contagion also made any
\nkind of sustained cooperation difficult, with each government
\nbusy guarding its own patch.<\/p>\n
The proposed fund would have institutionalized cooperation
\namong ASEAN economies in times of a financial crisis of the kind
\npresently battering regional markets.<\/p>\n
Southeast Asian countries have been assailed by non-stop
\nfinancial market turmoil since the Thai baht's de facto
\ndevaluation.<\/p>\n
Regional central banks have abandoned futile efforts to prop
\nup their currencies after suffering a sizable depletion of
\nprecious foreign exchange reserves.<\/p>\n
With its economy in deep crisis, Thailand went cap in hand to
\nthe IMF which arranged a $17.2 billion credit line that came with
\na strict program of austerity.<\/p>\n
Thanong said ASEAN lacked the expertise and the technical
\nknow-how to organize a regional monetary fund, but added that the
\nspirit of cooperation was alive and kicking.<\/p>\n
\"We just know that when one of us is in trouble, the others
\npack together to help.\"<\/p>\n
Thanong said the IMF would continue to be \"the center of the
\nrescue from any financial crisis of any country in the world.\"
\nHe said the IMF had \"all the expertise, the leadership\" to bail
\nout troubled economies with credit lines accompanied by
\nprescriptions on how to nurse them back to health.<\/p>\n
Thanong noted that ASEAN countries contributed a sizable
\nportion of the IMF-brokered credit line for Thailand.<\/p>\n
\"Whatever will happen, we have to stick together and help each
\nother to the end.\"<\/p>\n
\"I think that's the most important thing,\" he added.<\/p>\n
ASEAN officials met on the sidelines of an Asia-Europe Meeting
\n(ASEM) of finance chiefs from the two continents, ahead of next
\nweek's IMF-World Bank meetings in Hong Kong.<\/p>\n
ASEAN groups Brunei, Myanmar, Indonesia, Laos, Malaysia, the
\nPhilippines, Singapore, Thailand and Vietnam. Myanmar and Laos,
\nwhich joined the regional grouping only in July, are not part of
\nthe ASEM dialog.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/asean-puts-monetary-fund-plan-on-ice-1447893297",
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"sponsor_url": "https:\/\/okusiassociates.com"
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