ASEAN plus 3 states agree on Asian fund

ASEAN plus 3 states agree on Asian fund

BANDAR SERI BEGAWAN (AFP): Southeast Asia as well as Japan, China and South Korea agreed on Friday to form an Asian support fund to help regional economies fight future financial crises, officials said.

"There is a general consensus that we should have such a fund," Association of Southeast Asian Nations (ASEAN) deputy secretary general Suthad Setboonsarng said.

Emerging from a meeting between ASEAN finance and central bank deputies with their counterparts from Japan, China and South Korea -- the so-called plus three countries -- he told reporters: "In fact among the plus three countries, I think the international reserve the group has is over US$700 billion."

"So maybe we can work out something. We add the reserve the group has it's very big," said, adding that the facility would only be used in times of emergency when member economies were hit with turmoil.

However, Suthad added that details of the fund and what it will be called still have to be worked out.

ASEAN finance ministers meeting here this weekend were expected to discuss the issue.

Further discussions on the fund have been scheduled during a meeting of ASEAN finance ministers and their counterparts from the three East Asian countries on the sidelines of the Asian Development Bank (ADB) annual governors' meeting in Chiang Mai, Thailand on May 6, Suthad said.

ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

Japan first broached the idea of an Asian Monetary Fund after the worst financial crisis in 50 years swept through the region in 1997. However, it was shot down by the United States which feared it would duplicate the functions of the International Monetary Fund (IMF).

ASEAN officials here refused to use the term Asian Monetary Fund to describe the new fund, referring to it only as a regional support facility.

Sources said they were told by Japan to play down Tokyo's lead role in an apparent bid to appease Washington's opposition.