APEC finance ministers to focus on stability

APEC finance ministers to focus on stability

BANDAR SERI BEGAWAN (AFP): An Asia-Pacific finance ministers meeting in Brunei this week, scheduled to focus on securing economic stability, will have a strong undercurrent of revitalizing APEC's reputation, officials say.

The financial heavyweights from the 21-member Asia Pacific Economic Cooperation forum will meet here from Thursday in a four-day think tank that has been saddled with the reputation of an ineffectual talkfest.

And despite the full APEC leaders' summit in November carrying the theme of "making APEC matter more," the organization acknowledges that with the worst of the 1997 financial crisis behind it, there are few headline grabbing issues this year.

"Right now it's more of a talk shop," said a regional economist at a European bank who preferred not to be named.

"They will probably discuss the need to work closer but don't expect any concrete proposals."

APEC, slammed by some economic observers as losing relevance as an economic grouping, admits to struggling to find core common topics in the forthcoming meeting.

No official agenda has been publicly released but topics will include training for financial regulators, the stability of the financial system and the promotion of free and stable capital flows among member economies, an APEC media official told AFP.

Indonesia, still struggling to steer its battered economy out of the doldrums, is expected to be under the spotlight after the swearing in of its new cabinet dominated by people close to President Abdurrahman Wahid and from the military, observers said.

Although APEC may have mounted a relentless bid to open up trade, officials readily admit a lack of effort in getting the message across to the public.

"We're basically saying we haven't done enough, that's why we have to push it," said Lim Jock Seng, a senior foreign ministry official in Brunei which holds the APEC chair.

"We want to spread APEC further, to the young businessmen, women in business, the youth ... the question is, how do we do it?"

There are concerns that member countries, lulled by a sense of complacency that economic fundamentals are back to pre-crisis levels, would let slip the opportunity to map out a cohesive framework to avert a crisis similar to that of 1997.

Eisuke Sakakibara, Japan's former vice minister of finance who was once called "Mr Yen" for his influence in financial markets, said the regional recovery should not mask the need for a defense mechanism.

He said complacency in the U.S. and Asia was dangerous, and called for accelerated efforts to strengthen banking and financial systems and corporate governance.

Observers said that would a near-to-impossible task to achieve given the members' differing views on what exactly was needed.

As part of a defense mechanism, Sakakibara called for the setting-up of an Asian Monetary Fund, although idea has previously met stiff resistance from the U.S.

The fund, first proposed during the Asian crisis by Japan, was opposed by the U.S. and European countries on worries it could undermine the authority of the International Monetary Fund.

The Asia Pacific Economic Cooperation forum groups Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, Taiwan, Thailand, the United States and Vietnam.