ASEAN ministers to focus on reform program

ASEAN ministers to focus on reform program

By Martin Abbugao

BANDAR SERI BEGAWAN (AFP): Southeast Asian finance ministers
are set to gather here this weekend to review the pace of
economic reforms three years after the region's financial crisis.

But the Asian Development Bank (ADB), whose Vice President
Peter Sullivan will be attending certain sessions, has warned
that some countries may be lulled into sacrificing reforms for
economic growth.

Tiny oil-rich Brunei is hosting a weekend meeting of finance
ministers from fellow Association of Southeast Asian Nations
(ASEAN) members Cambodia, Indonesia, Laos, Myanmar, Malaysia, the
Philippines, Singapore, Thailand and Vietnam.

The gathering is to be preceded by a series of meetings by
finance and central bank deputies on Thursday and Friday.

Finance deputies from China, Japan and South Korea, as well as
representatives from the ADB, the World Bank and the
International Monetary Fund (IMF) are also to attend the
sessions.

"One always has to be watchful and take lessons from past
experiences," a senior official at Brunei's finance ministry said
when asked about the post-crisis deliberations.

The Brunei meeting -- the fourth after Phuket, Jakarta and
Hanoi -- was cheered by an IMF report to central bank deputies on
Wednesday that the region rebounded strongly in 1999, just two
years after the crisis, although risks remained.

Details of the report were not immediately released.

Organizers said this year's meeting was expected to take stock
of measures to strengthen financial systems, whose major
weaknesses, glossed over by decades of spectacular economic
growth, were unraveled by the 1997 turmoil.

ASEAN members Indonesia, Malaysia, the Philippines and
Thailand, as well as South Korea, were the hardest hit.

The ministers are to tackle progress in capital markets
development, improving the use of regional currencies to promote
intra-regional trade, financial sector liberalization, as well as
the establishment of common standards for the insurance and
customs sector.

The ASEAN surveillance process, a peer review mechanism
designed to monitor each other's economic data to detect
potential problems and nip them in the bud, is also on the
agenda, organizers said.

Tokyo's revived proposal for an Asian Monetary Fund was
expected to figure prominently in the discussions with the
deputies from Japan, China and South Korea, said the senior
Brunei official, who asked not to be named.

Former Japanese vice finance minister Eisuke Sakakibara
renewed his calls in a forum in Singapore earlier this month for
such a fund as a defense mechanism against future crises.

Japan floated the idea in 1997 but it failed to fly due to
strong opposition from the United States and Europe, which both
argued it would undermine tough fiscal conditions imposed by the
IMF.

Discussions about a common ASEAN currency were not on the
agenda, although it could be brought up, the source added.

But he said discussions were likely to be preliminary, noting
that it took Europe 30 years to agree on a single currency, the
euro.

"ASEAN has a more diverse economic landscape so it may take
longer," the source said, apparently referring to the wide gaps
in economic development between the group's original members and
new entrants Cambodia, Laos and Myanmar.

In a report released on March 10, the ADB acknowledged East
Asia was recovering from turmoil faster than expected, but should
resist calls to slow down on reforms in the headlong pursuit of
economic growth.

"A 'growth first' strategy is not only risky, it may invite
recurrence of problems at a later date, particularly if
underlying structural difficulties are not tackled," the report
cautioned.

Reforms include sometimes bitter political decisions to shut
down ailing banks and corporations owned by the government and
friends of those in power, as well as measures to ensure
transparency and good governance.