ASEAN orders study to conserve foreign exchange

ASEAN orders study to conserve foreign exchange

KUALA LUMPUR (Reuters): Southeast Asian leaders yesterday
ordered a study into a possible regional payments system that
would help member states conserve foreign exchange and protect
against a financial crisis.

Leaders of the nine-member Association of South East Asian
Nations (ASEAN) released a statement in the Malaysian capital
which said ASEAN nations should increase regional trade as a
means to overcome the unprecedented devaluation of their
currencies.

The ASEAN leaders said their nations "should increase trade
interaction within the region as a way to overcome the
unprecedented devaluation of their currencies".

"They directed officials to study the possibility of
establishing appropriate ASEAN payments arrangements that can
assist member countries to conserve foreign exchange", the
statement said.

The leaders agreed "consultations should be intensified so as
to enable Cambodia to join ASEAN as soon as possible, preferably
before the next ASEAN summit".

ASEAN groups Brunei, Myanmar, Indonesia, Laos, Malaysia, the
Philippines, Singapore, Thailand and Vietnam. Cambodia's
membership was deferred because of its political turmoil.

ASEAN leaders also strongly endorsed the early implementation
of an agreement reached last month in Manila calling for steps to
strengthen International Monetary Fund aid to the region.

The IMF, supplemented with cooperative financing arrangements
from other ASEAN countries, was called to help Thailand,
Indonesia and South Korea.

The Manila Framework, an accord reached in the Philippine
capital in November, called for ad hoc aid to ailing economies,
to be disbursed in line with economic programs crafted by the
IMF.

Meanwhile ASEAN Secretary-General Ajit Singh said on Monday a
new fund was required to help economically-backward countries
within the regional grouping such as Myanmar, Laos and Vietnam.

"ASEAN should also have another financial mechanism that is
distinctly ASEAN which can provide the necessary funds and have
the financial resources to help these new members," he said in a
speech at a conference held on the sidelines of the group's heads
of states summit.

He said this fund should help these countries integrate into
the mainstream of economies in the ASEAN.

He was also referring to Cambodia, which is expected to join
the nine-member grouping next year.

"The details of this financial mechanism whether you want call
it a bank or fund, its nature, size, scope and
composition...where it will get its funds from...can all be
worked out later," he said.

He said "the mechanism should not seek to supplant but rather
complement the activities of other organizations such as the
Asian Development Bank and those related to the Mekong Basin
Development".