APEC panel unveils Asian self-help measures

APEC panel unveils Asian self-help measures

TAIPEI (Reuters): A panel of Asia-Pacific economies proposed
on Saturday a package of self-help measures for Asia's battered
economies, including issuance of state bonds that would be backed
by regional powers and the Asian Development Bank.

Host Taiwan also pledged its full support for the package,
saying it would back any decision made by the panel.

"We have very close trade and investment ties with countries
in east Asia. How could we just sit back and not assist," Taiwan
Premier Vincent Siew said at the opening of the Asia Pacific
Economic Cooperation forum's financial crisis committee meeting.

Under the bond proposal, countries facing difficulties would
raise badly needed capital by issuing government bonds that would
be guaranteed by the Asian Development Bank and by wealthy APEC
members, including Taiwan.

"We will be asking the better-off economies like Singapore,
Japan, the United States and Taiwan to support this along with
the Asian Development Bank," Jeffrey Koo, chairman of the APEC
Business Advisory Council's financial committee, said.

He gave no further details of the bond proposal.

Koo said seven APEC economies, including Japan and the United
States, also proposed in the panel meeting that Asian states that
had seen big depreciations undertook currency swaps to protect
their currencies from further declines.

"Sometimes in times of large depreciations, such currency
swaps should help," Koo said.

He gave no further details.

A third proposal was that countries facing difficulties formed
a special ad hoc committee to hold regular consultations about
counter-measures in the financial crisis.

"There is a need for frequent contacts among central bank
governors of finance ministers of the battered economies in the
face of the currency turmoil," Koo said after the meeting.

"And this committee should be able to help address problems in
a timely fashion."

No decisions on the three proposals were taken and all would
be discussed further at an APEC ministerial meeting in Mexico in
late February, Koo said.

The meeting was attended by representatives from Japan, the
United States, Singapore, Hong Kong, Brunei, the Philippines and
Taiwan as well as Asian Development Bank officials on the
sidelines of an APEC technology forum in Taipei.

Indonesia had planned to attend but did not, Koo said.

"They canceled in the last minutes due to severe financial
problem back home," Koo said, brushing aside news reports that
Chinese pressure was behind the back-off.

Koo said the meeting took place without any interference or
protest from communist China, an APEC member which has accused
rival Taiwan of using its wealth to exploit Asia's financial woes
for political advantage in its rivalry with Beijing.

Beijing has regarded Taiwan as a renegade province not
eligible for sovereign contacts since 1949, but has tolerated its
membership in APEC as an economy -- not a country -- under the
name Chinese Taipei.

"The meeting was amiable and we reached consensus on most
issues," said Koo, who aside from his APEC duties is chairman of
Taiwan's influential Chinatrust Commercial Bank.

One issue where there was no consensus was a proposal backed
by Taiwan and other APEC members to form an Asian fund to act in
concert with the International Monetary Fund in assisting Asian
countries facing financial difficulties, Koo said.

"There was no major consensus (on an Asian fund). We'll have
to raise this issue again on February 27 in Mexico," he said.

Taiwan had hoped to set up a mechanism to provide funds needed
by the countries to fight the turmoil, but some APEC economies
did not support this.

Seizing the opportunity of Asia's currency turmoil, Taiwan is
striving to boost economic ties with hard-hit Southeast Asian
neighbors, all of which recognize only Beijing.

Despite protests from China, Taiwan's Siew recently made two
surprise visits to the Philippines and Indonesia, offering to
explore ways to help it and other southeast Asian countries out
of their financial straits.

Beijing expressed its displeasure on each occasion, accusing
Taiwan of exploiting the Asian financial crisis to further its
political interests.