ASEAN finance ministers here to discuss crisis
JAKARTA (JP): Finance ministers of the Association of Southeast Asian Nations (ASEAN) are expected to focus on the group's worst financial crisis and the possibility of using regional currencies for intra-ASEAN trade in their second formal meeting here today.
Dono Iskandar Djojosubroto, the secretary-general of Indonesia's ministry of finance, said yesterday that the ministers' agenda also included talks on the possible establishment of an investment fund.
The nine ASEAN members, led by Malaysia, have proposed to create a common payment system for regional trade to reduce the use of U.S. dollars and help revive their battered currencies.
Malaysian Finance Minister Anwar Ibrahim will brief his ASEAN counterparts on his recent visit to Japan and Taiwan, which are expected to play bigger roles in resolving the Asian crisis.
Trade between ASEAN members totaled more than US$156 billion in 1996.
ASEAN central bankers agreed in a meeting in Bali earlier this month to set up a technical task force to assess the potential benefits and costs of using regional currencies for trade among the organization's members.
The task force is composed of the central bank governors of Indonesia, Malaysia, the Philippines, Singapore and Thailand.
ASEAN also includes Brunei, Laos, Myanmar and Vietnam.
One plan proposes using the Singapore dollar as a common trading currency between ASEAN countries.
Thai Bankers Association president Olarn Chaipravat has said such a move would help curb the region's demand for U.S. dollars, easing pressure on Asian currencies which have depreciated substantially since Thailand floated its baht last July.
Analysts, however, claim that although Singapore is a major trading economy, it is too small and does not sufficiently represent the region for such a proposal to work.
Resistance displayed by Singapore's monetary authority over the internationalization of its currency also has led to skepticism over the plan.
Indonesia, and most other ASEAN members, have been badly hit by the economic crisis. The rupiah has lost about 70 percent of its value since it traded at 2,450 against the U.S. dollar in July.
The currency crisis has sent the Indonesian economy into a tailspin with basic food prices soaring, companies forced to lay off many of their employees and exporters failing to import raw materials due to rejections of local letters of credit by overseas banks.
Today's gathering is also expected to highlight measures taken by various ASEAN bodies to help promote confidence in the region in light of the financial crisis, Dono said.
Indonesian Finance Minister Mar'ie Muhammad will chair the meeting. He will be joined by Brunei Deputy Minister of Finance Pehin Dato Ahmad Wally Skinner, Laos Vice Minister of Finance Yao Phonevantha, Myanmar Minister of Finance and Revenue U Khin Maung Thein, the Philippines Minister of Finance Salvador Enriquez Jr., Singapore Minister of Finance Richard Hu Tsu Tau, Thailand Minister of Finance Tarrin Nimmanahaeminda and Vietnam Minister of Finance Nguyen Sinh Hung.
The secretary-general of ASEAN, Rodolfo C. Severino Jr., will also attend the gathering and is expected to brief the association officials on the progress of finance cooperation within the group.
ASEAN leaders agreed in 1995 to have their finance ministers meet regularly to improve economic cooperation in the region. The first formal meeting of ASEAN's finance ministers was held in Thailand in March 1997. (08)