ASEAN nation plan local monies trade

ASEAN nation plan local monies trade

MANILA (Dow Jones): Six Southeast Asian countries aim to have
a framework in place for using each others' currencies for the
settlement of trade payments within six months, a business group
meeting with trade and investment ministers from the nine-member
Association of Southeast Asian Nations, or ASEAN, said Thursday.

Jose Concepcion, chairman of a committee representing the
chambers of commerce and industry of ASEAN's nine member
countries, said the Philippines, Thailand, Indonesia, Malaysia,
Singapore and Brunei plan to have a model for bilateral trade
payments using local currencies ready by the end of the second
quarter of 1999.

The scheme is aimed at conserving foreign exchange by reducing
the region's reliance on using U.S. dollars to settle export
payments and also strengthen ASEAN's ongoing process of economic
and financial integration.

In a report to the ASEAN ministers, the association's
Secretary General Rodolfo Severino said that the group recognized
that this initiative isn't a "cure all" to the continued
volatility of regional currencies.

But, the report added, there was good reason to hope these
bilateral payments would work, given the magnitude of inter-ASEAN
trade which totaled US$86 billion in 1997.

Concepcion stressed that only a framework and not the
completion of bilateral payment arrangements is expected to be
ready by the end of the second quarter of 1999.

Severino's report noted that bilateral talks are already
underway between: Malaysia and the Philippines; Malaysia and
Indonesia; Malaysia and Thailand; and Indonesia and Thailand.

Concepcion said the less developed economies of ASEAN members
Myanmar, Laos and Vietnam aren't expected to participate in the
scheme for some time, Concepcion said.

He said that the ASEAN ministers agreed that to get the scheme
launched, it would require the cooperation of central banks and
numerous government agencies.