ASEAN, partners try to surveillance plan consensus
ASEAN, partners try to surveillance plan consensus
HONOLULU, Hawaii (AFP): Senior southeast Asian finance and central bank officials labored into the night here Tuesday to forge a consensus on expanding a regional surveillance mechanism to serve as a tripwire against future financial crises.
Officials began discussing a draft communique in the early afternoon on the eve of a finance ministers meeting of the Association of Southeast Asian Nations (ASEAN) and their counterparts from China, Japan and the United States.
The closed-door session drifted into the evening with some signs of exasperation during increasingly periodic breaks. One ASEAN official told AFP that "the discussion seems to be going round in circles."
Malaysia is chairman of the meeting, which would be a follow- up to a similar conference in Kuala Lumpur last month that examined the region's preparedness for another financial crisis of the sort that struck in mid-1997.
"Tomorrow is the ministers'. We have to finish it tonight," a member of the Malaysian panel said.
A key issue is the inclusion of Beijing, Seoul and Tokyo in an ASEAN surveillance process, designed by the now 10-member grouping in late 1998 to help each other detect signs of recurring vulnerability, delegates said.
The monitoring process, which is supported by the Philippines- based Asian Development Bank (ADB), releases a twice-yearly surveillance report to ASEAN finance ministers and also provides a forum under which the ministers can exchange views to consider unilateral or collective action.
Finance ministers of ASEAN -- Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam -- and those of China, Japan and South Korea are to hold a single meeting here on Wednesday on the sidelines of the ADB annual meeting.
The overall objective is to keep up the level of investor confidence in the Far East, where massive foreign direct investment flows have transformed formerly plantation-based economies into manufacturing powerhouses until capital all but dried up in 1997.
Observers said difficulties could also be due to the different levels of economic development among the participating countries.
Japan is the world's second largest economy while Myanmar is just emerging from a hermit status, Cambodia is rebuilding from civil war, and Vietnam is scrambling to complete the shift from a command economy to one more closely based on the free market system.
The surveillance process takes on an added significance amid the specter of a cooling US economy, the main market for many.
The ADB last month forecast economic growth in Southeast Asia would slow to four percent this year from 5.1 percent in 2000.
Growth for the newly industrialized economies including South Korea would be almost halved to 4.3 percent from 8.4 percent last year, but with China just mellowing slightly to a 7.3 percent clip from eight percent previously.
Officials said the finance ministers would also continue discussions on a network of bilateral swap arrangements involving ASEAN and their three major Asian trading partners.
The initiative -- named after the northern Thai resort of Chiang Mai where it was formed last year, would link the reserves of these countries as a defense against future crises.