RI's request for IMF aid to spur Asia fund<\/p>\n
TOKYO (Reuter): An Indonesian request for aid to cope with a
\ncurrency crash will spur momentum for the creation of an Asian
\nfund to help troubled economies in the region, but opposition
\nfrom key players in the debate won't fade quickly.<\/p>\n
\"Indonesia's request will bolster those who say we need an
\nadditional fund, but I don't think it will change anyone's mind
\nif they are against such a facility, especially if this can be
\nhandled within the current structure,\" one diplomat here said.<\/p>\n
Indonesia, seeking to repair shattered confidence in its
\neconomy, said on Wednesday it would seek help from the
\nInternational Monetary Fund (IMF) and other agencies to help keep
\nforeign exchange reserves at safe levels.<\/p>\n
Officials did not say how much aid would be sought, or in what
\nform. Analysts said any package would be far less than the $17.2
\nbillion package for Thailand and a monetary source in Washington
\nsaid Jakarta might not even need to use IMF cash once it agreed
\non an IMF loan program.<\/p>\n
Southeast Asian nations, supported by Japan, have been urging
\nthe creation of a special fund to help countries in trouble.
\n\"What happened in Indonesia has underlined the need to create a
\nregional facility to take care of the financial problems in this
\nregion,\" said Som Jatusititak, an adviser to Thai Finance
\nMinister Thanong Bidaya.<\/p>\n
The IMF and United States are wary of the concept and Germany
\nis strongly opposed, fearing a regional facility would disperse
\nfunds without demanding the strict -- some Asians say too strict
\n-- policy adjustments required by the IMF.<\/p>\n
Japan, meanwhile, wants to assume a higher profile in regional
\naffairs while some of its neighbors hope Tokyo, whose funds would
\nbe vital for an regional facility, will lead the way in
\npersuading reluctant players the idea's time has come.<\/p>\n
\"How fast the idea can be put into reality would depend on how
\nfast Japan can dispel the reservations that the IMF and G-7
\nnations might have about the proposal,\" Thailand's Som said.<\/p>\n
Leery of angering Washington, Tokyo has denied taking the lead
\nand emphasized that an Asian fund would complement, not conflict
\nwith, the IMF. \"Any facility in the region would never undermine
\nthe function of the IMF,\" a senior Japanese Finance Ministry
\nofficial told reporters last week.<\/p>\n
Others in the region also appear anxious to reassure
\ndetractors that a new fund would have policy strings attached and
\nnot insure authorities against fallout from their mistakes.<\/p>\n
Malaysian Finance Minister Anwar Ibrahim said yesterday that a
\nproposed Asian fund would need $100 billion and that it would
\nonly be used to help economies that had run into trouble by
\naccident. \"There will be some regulation to ensure that
\nrecipients have genuine economic problems which they need help
\nfor. Those who have created their own economic fiasco cannot be
\nbeneficiaries of this fund,\" Anwar told reporters.<\/p>\n
Japan will contribute $50 billion toward the establishment of
\nan Asian fund to help troubled economies in the region, the daily
\nSankei Shimbun, quoting international financial sources, reported
\nyesterday.<\/p>\n
The conservative Japanese daily said that Japan will foot the
\nbill for half of the planned $100 billion regional fund, which
\nwill be used to supplement the activities by the International
\nMonetary Fund (IMF).<\/p>\n
A senior IMF official in Tokyo said the debate would go on,
\nbut that Indonesia's request was a \"completely separate issue\".
\n\"My understanding is the debate will continue and there is
\nagreement among key players concerned to hold a meeting as soon
\nas possible,\" Kunio Saito, director of the IMF's regional office
\nfor Asia and the Pacific, told Reuters. \"Officials are exploring
\nmutually agreeable timing.\"<\/p>\n
\"The amount involved in the context of Indonesia is relatively
\nsmall, so I don't think anyone can argue on that basis...for a
\nnew fund,\" Saito said. \"At the same time, unfortunately, the
\nsituation (in the region) remains fragile...so some may say some
\nkind of arrangement is needed. But please note, the IMF is there,
\nwith resources.\"<\/p>\n
Discussions could well heat up further when leaders of Asia-
\nPacific nations gather in Vancouver late next month.<\/p>\n
\"The purpose of the Asia fund is to round up the funding
\nrequirements and the contributions of Asian countries in case of
\na crisis, and it is a good idea,\" Thailand's Thanong said. \"But
\nsomehow it has been delayed. Why not put it in the APEC (Asia-
\nPacific Economic Cooperation) forum? Why just keep it within
\nAsia? The IMF will not have enough to deal with any crises by
\nitself, and (the Asian Fund) is an effort to prepare something
\nmore solid,\" Thanong, in Tokyo with Prime Minister Chavalit
\nYongchaiyudh, told reporters yesterday.<\/p>",
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