ASEAN finance ministers here to discuss crisis

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)