APEC debates financial reforms

APEC debates financial reforms

LANGKAWI, Malaysia (AFP): APEC central bankers and finance officials opened talks Thursday to lay the groundwork for the group's finance ministers to reinforce reforms to hasten an Asian economic recovery.

Representatives from all 21 economies of the Asia-Pacific Economic Cooperation (APEC) forum attended the informal talks at the popular resort island of Langkawi in northwestern peninsular Malaysia.

Finance ministers of APEC, whose economies account for about 60 percent of world output, meet annually to discuss current economic and financial themes and other topics proposed by leaders at their annual summits.

A senior North American finance official told AFP that among the "main themes" at the talks Thursday were Asia's recovery from financial and economic turmoil and strengthening the region's financial sectors.

He said the officials began preparing a joint communique to be debated and adopted by the finance ministers Sunday at the end of their two-day meeting.

Deputy U.S. Treasury Secretary Lawrence Summers, nominated to take over from Robert Rubin who announced his resignation Wednesday as Treasury Secretary, would arrive here just before the meeting starts Saturday, officials said.

Summers was expected to reiterate that Asian nations must keep up the pace of reforms even though they were recovering satisfactorily from the crisis triggered by rapid currency declines starting in mid-1997, they said.

Japanese Finance Minister Kiichi Miyazawa is to propose setting up a new bond market in which Asian countries can raise funds to aid their recovery with Japanese government backing, news reports say.

World Bank president James Wolfensohn, International Monetary Fund managing director Michel Camdessus and Asian Development Bank president Tadao Chino are also scheduled to attend.

Officials said Thursday's meeting would prepare a host of issues for consideration by finance deputies on Friday before a consensus draft communique is forwarded to the ministers.

A World Bank senior economist told AFP that the talks would also consider strengthening social safety nets for people hit hard by the crisis, which had caused one of the most severe recessions in the region.

He added that efforts towards financial and corporate restructuring as well as reforms proposed under the so-called new international financial architecture featured prominently in the talks.

"We will see how APEC can help to increase surveillance of the banking sector," the economist said.

APEC deputies were also scheduled to meet with representatives of the forum's Financiers Group, comprising mostly private bankers, later Thursday.

The Financiers Group will hold a day of talks separately Friday on the sidelines of the meeting of APEC deputies to consider proposals to develop bond markets in Asia as another channel to raise funds to fuel recovery.

Formed in 1989, APEC comprises Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, South Korea, Taiwan, Thailand, the United States and Vietnam.