ASEAN finance ministers to focus on averting crises
ASEAN finance ministers to focus on averting crises
HANOI (AFP): Finance ministers of the Association of Southeast Asian Nations will meet in Hanoi this week to discuss greater regional financial integration and an early warning system to avert new crises.
Analysts say the financial crisis which left many ASEAN countries devastated could have been avoided through greater macroeconomic and financial cooperation between countries.
In Davos in January Indonesia's Coordinating Minister for Finance and Economy Ginandjar Kartasasmita stressed the need for "better and more current information on private capital flows" to limit the risks of future crises.
At the ASEAN summit here in December, leaders called for stronger Japan economic and financial cooperation within the group which comprises Brunei, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
Cambodia, which is likely to become the 10th member soon, possibly as early as next month, will attend as an observer. Senior finance officials from China, South Korea and Japan will also take part in the two-day meeting.
The lack of information about short-term debts of Asian countries was a key factor in sparking the Asian crisis, and greater transparency and fiscal discipline among financial institutions is a centerpiece of economic reforms under way.
The Indonesian government won kudos from International Monetary Fund for Saturday's announcement that it had closed 38 ailing banks and taken over seven others as part of its drive to restore the health of the crippled financial sector.
Malaysia's Second Finance Minister Mustapa Mohamad is likely to echo Prime Minister Mahathir Mohamad's call for a new global financial architecture and explain any misconceptions about Malaysia's capital controls, ministry officials said.
The finance ministers, who meet in Hanoi on March 19 and 20, are also expected to discuss a surveillance system for capital flows and major economic indicators.
"The surveillance process would be high on the agenda," said Supparat Kavattakul, director-general of the fiscal policy office of Thailand's finance ministry.
The Asian Development Bank is providing technical assistance to establish a type of peer review system based at the ASEAN secretariat, said Hanoi-based ADB representative Jean Pierre Verbiest.
ASEAN leaders have also called for a study into the feasibility of a common currency as part of a plan to promote economic recovery and free trade in the region of 500 million people.
The meeting will also include discussions with Japan on how to share some US$35 billion with which it promised to help Asian nations reform their economic structures and turn around their economies.
This sum includes the $30 billion promised by Japanese Finance Minister Kiichi Miyazawa in October initially targeting Indonesia, Thailand, the Philippines, Malaysia and South Korea and an additional $5 billion unveiled at the ASEAN summit last December.
ASEAN members will also be looking for promises from China that it will not devalue its yuan currency, a move that would deal a serious blow to their beleaguered economies, observers say.
The World Bank and IMF and ADB will also attend the meetings, and will explore possible additional assistance to ASEAN countries to cope with the social effects of the crisis.
"The social dimension of the crisis is much, much wider than one imagined, even six months ago. That's obviously a major concern of all," said Verbiest.