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.