APEC finance ministers meeting opens today
APEC finance ministers meeting opens today
DENPASAR, Bali (JP): Most delegates to the second annual meeting of the APEC finance ministers arrived yesterday but the ministers of the United States and Japan, who are expected to be the center of attention, will fly in just a few hours before the opening session tonight.
Japan's Finance Minister Masayoshi Takemura, who will be accompanied by 30 delegates and supporting staff, and U.S. Secretary of the Treasury Robert Rubin, with a 15-member team, are expected here this afternoon.
An official of the organizing committee said yesterday that differing from the original agenda, the conference would be opened by Vice President Try Sutrisno and not by President Soeharto who arrived in Jakarta on Thursday morning from two weeks of travel to Germany and Central Asia.
The official hastily denied the notion that the change and the fact that the meeting would open without an address from the President would affect the significance of the conference.
Thirteen of the 18 members of the Asia Pacific Economic Cooperation forum will be represented by their finance ministers and the other five -- Chile, Malaysia, Mexico, New Zealand and Papua New Guinea -- by their deputy finance ministers.
A delegate from an Asian member, which like Indonesia has been feeling the brunt of the excessive swings in the Japanese yen since last month, saw the forum as a great opportunity to directly tell the Japanese and American ministers of the impact of the volatility of their currencies.
Indonesia and Thailand and, to a lesser degree, China, Hong Kong, South Korea and Taiwan, have been hurt by the steep appreciation of the yen against the U.S. dollar, which over the last five weeks alone has reached as high as 18 percent.
"I think Japan and the U.S. have done nothing more than fire brigade operations to cope with the gyrations of their currencies," the Asian delegate noted yesterday.
He said his observation was shared by the delegates of other of APEC's developing members.
He put great importance on the meeting in light of the forthcoming summit of the Group of Seven industrialized countries in Halifax, Nova Scotia, Canada, in June.
However, Jusuf Anwar, secretary-general of the Indonesian Ministry of Finance, said yesterday the issue of exchange rate volatility would only be one of the items on the agenda.
"We should remember that this meeting is the follow up of the first conference of the APEC finance ministers in Honolulu, Hawaii, in March, 1994," said Jusuf, who also serves as the deputy chief of the Indonesian delegation.
Jusuf said the other topics of discussion will include the general economic development in APEC members over the past year, financing for infrastructure development, capital flows within the region and actual issues such as the exchange rate gyrations.
"The first finance ministers' conference asked the International Monetary Fund to study the impact of portfolio investments into and within the region and we will take up the report of the study," he said.
Jusuf said APEC also had assigned its Economic Committee to study the impact of excessive currency swings on trade and investment, but he was not sure whether the final report would be taken up at the meeting on Sunday.
Similar to the issue of exchange rate volatility, the question of portfolio investments has become a great concern, especially to emerging economies, after the financial crisis in Mexico in December and January.
Mexico's troubles have rudely reminded monetary policy makers in emerging economies that portfolio capital, though badly needed to fuel domestic growth, could be fickle, footloose and merciless. Such investments could leave as quickly as they come, depressing stock markets and undermining currencies and raising the specter of devaluation.
The fallout of the Mexican financial crisis even reached several Asian countries, notably Indonesia, Thailand, Hong Kong and Malaysia, where jittery fund managers pulled out of funds in January, sending speculative attacks against their currencies.
The finance ministers therefore will discuss the kind of strategies needed to manage capital inflows in manners which foster both growth and macroeconomic stability.
"Of course, we expect more concrete measures out of this second round of consultation meetings," Jusuf said in referring to the conference here which is to end tomorrow evening. (vin)