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.