ASEAN finance minister to rehash ongoing initiatives

ASEAN finance minister to rehash ongoing initiatives

SINGAPORE (Dow Jones): Finance ministers from the Association
of Southeast Asian Nations are expected to rehash a host of
ongoing initiatives, but break little new ground at their meeting
in Brunei this week.

The meeting opens Thursday and runs through Sunday.

One of the higher profile issues being watched by market
participants is what progress, if any, Asean authorities are
making in refining a peer surveillance mechanism intended to
allow member countries to better monitor developments in each
others' economies.

The finance ministers from the 10-country bloc also are
expected to discuss efforts to improve the workings of regional
capital markets, a controversial plan to establish an Asian
Monetary Fund, and other general economic issues.

Asean is made up of Brunei, Cambodia, Indonesia, Laos,
Malaysia, Myanmar, the Philippines, Singapore, Thailand and
Vietnam.

The group has also invited representatives from Japan, China
and South Korea to send deputy-level representatives to the
meeting in a move that could lead to eventual permanent
membership for the North Asian countries.

The economic surveillance system was inaugurated by the Asean
members a year ago this month, but observers say the program has
fallen short of its original goals.

The information being exchanged between countries appears to
be for the most part publicly available economic data, analysts
say.

"The original agreement was to go beyond that," said John
Funston a senior fellow at the Institute for Southeast Asian
Studies.

But it should come as no surprise that Asean members are
reluctant to divulge proprietary information between each other
given their battles to grab larger market shares.

"They're all in competition with each other," said Adrian
Foster, senior economist at Nomura Securities.

The ministers are also sure to bring up a long-standing
proposal to form an Asian Monetary Fund - an idea that has
encountered stiff opposition from the International Monetary Fund
and Western governments in general.

The Manila-based Asian Development Bank released a report last
week saying there's a need to seriously consider such an
institution.

Although the report was compiled last year, its release comes
amid a growing debate over the role of multilateral banks, and
specifically whether the World Bank should pull out of Asia and
let the ADB be the main agency in the region to make loans and
alleviate poverty.

Funston said there may be some misunderstanding in the West
about possible ways an Asia Monetary Fund could be structured.

"It depends on how it is presented," he said. "If it is
presented as an alternative to the IMF is will immediately run
into opposition. But if it is compatible with and complimentary
to the IMF it shouldn't be too much of a problem."