ASEAN ministers say back in economic recovery after crisis

ASEAN ministers say back in economic recovery after crisis

David Brunnstrom, Reuters, Yangon

Southeast Asian finance ministers agreed on Friday their region's economy was back in recovery mode but said this needed to be consolidated and protected from outside shocks through further reform.

While calling for closer cooperation to boost recovery, the ministers from the 10-member Association of South East Asian Nations conceded that different levels of development and market conditions in their diverse bloc meant no one economic formula would fit all countries.

After the gloom of the 1997 Asian crisis compounded by last year's global downturn, the mood at their meeting in Yangon was at last more upbeat.

"There is a strong consensus about the state of affairs in ASEAN," Philippines Finance Minister Jose Comacho told Reuters.

"It's in a good shape both externally as well as within the region, in the countries, in terms of structural reforms that are ongoing, measures that are being taken.

"It's recovering. What was also noted was that if you look at year-on-year it may not be reflected, but if you look at quarter- to-quarter it's actually happening already."

Haji Abdul Aziz Umar, from tiny oil-rich Brunei, a country benefiting from the recent price surge in the commodity, said the recovery would require careful handling, but added, "I think we have seen the light at the end of the tunnel."

Other officials, including Indonesia's minister, Boediono, concurred. "The overall mood is towards the better at the moment, so I think we all feel that positive sentiment," he said.

Last year's global downturn led to a big export slump in Asia, particularly hitting hi-tech producers such as Singapore and Japan and ministers said the focus was now on boosting domestic demand. But varying conditions meant individual approaches must differ.

"No one solution fits us all perfectly, so there must be some adaptation and some variation," Singapore's Second Finance Minister Lim Hng Kiang told Reuters.

He said countries were being careful not to create long-term structural problems when acting to boost demand.

Thai Finance Minister Somkid Jatusripitak, whose country's balance of payments crisis sparked Asia's crisis, said ASEAN needed to become a strong network to keep its economies strong.

"They should not only depend on external economy," he said.

The Asian Development Bank (ADB) delivered some good news this week, saying the region was expected to see a "moderate" rebound this year helped by "very encouraging signs of recovery" in the United States and partial recovery in Europe.

But Pradumna Rana, the ADB's director for regional economic monitoring, warned that risks remained, given serious imbalances in the United States and high world oil prices. And he said the extent of the upturn would vary from country to country.

Before wrapping up their meeting on Saturday, the ministers were to sign protocols on tariffs and on further liberalizing financial services.

An ASEAN official said the latter would recognize that countries like Cambodia, Laos and Myanmar were likely to move more slowly in certain areas.

Meeting Japanese, Korean and Chinese dialogue partners on Thursday, the ASEAN countries discussed expanding a regional currency swaps network Tokyo has championed.

It now involves agreements worth $15 billion to provide rapid help if a currency comes under speculative attack as in 1997.

Some see this as a precursor to an Asian Monetary Fund but Japan made clear an Asian fund was still on the back burner.

"Maybe it's kind of some target, but within one or two years it is very difficult to have that," Hiroshi Watanabe, deputy director-general of Japan's Ministry of Finance, told Reuters.

"Still the level of economic stages is quite different. It's quite different from the European area, so in order to have some kind of multilateral institution, it will take some time."

Watanabe said delegates had urged Japan to restore growth and pursue structural reform and he had replied that Tokyo was working hard to restore growth by the second half of the year.