ASEAN says Japan may make crisis funds permanent

ASEAN says Japan may make crisis funds permanent

MANILA (Agencies): Japanese officials have agreed to endorse to their government a proposal by the Association of Southeast Asian Nations (ASEAN) to make permanent Tokyo's multi-billion dollar funds available for crisis-hit neighbors.

"They agreed to endorse it," Philippine Finance Secretary Edgardo Espiritu told reporters on Friday, a day after ASEAN finance and central bank deputies met their Japanese counterparts and agreed to enhance financial cooperation.

The funds include the Miyazawa initiative, a $30 billion fund so far allocated to South Korea, Indonesia, Thailand, Malaysia and the Philippines, as well as the $15 billion Obuchi fund, available on merit for project financing, he said.

Espiritu said the Japanese officials responded positively to the ASEAN proposal to "institutionalize" the availability of the funds, which Japan set up to help its neighbors recover from the Asian currency crisis that broke out in 1997.

"The ministers of finance of the ASEAN feel very strongly that it's very vital to institutionalize this kind of support that was given us by Japan and make it available again in case there is a recurrence of a similar crisis," Espiritu was quoted by Reuters as saying.

Philippine Finance Undersecretary Joel Banares, who attended the deputies' meeting, said the 10-member ASEAN wanted a fund that would be continually replenished if there were withdrawals.

"What we mean by permanent is not putting an expiry to its availability," he said.

Espiritu said the proposed permanent fund would have the same functions as the two existing ones, such as being available for co-financing of projects, direct loans for various programs, or guarantees for loans and bond issues.

"The availability will be similar...like the Philippines is using the Miyazawa fund for co-financing, and Thailand is using it for corporate restructuring," Espiritu said, adding that the terms of the fund would also be concessional.

"We are not just referring to fund assistance, but technical support and enhancement of human resource development as well because Japan is strong in training," he said.

He did not respond to questions whether the fund proposed by the ASEAN would be available only to its members -- Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam -- or to beneficiaries of the present Miyazawa fund.

On questions on whether the fund would be funded exclusively by Japan, Espiritu said the proposal was in early stages and had yet to be discussed at higher levels.

ASEAN and Japan's Ministry of International Trade and Industry have also agreed on ways to cooperate in promoting trade and investment.

Steps will include improving ASEAN's access to new markets through Japanese networks of trade organizations, and providing Japanese training in marketing to ASEAN countries, said a joint statement by MITI officials and ASEAN economics ministers after they met on the sidelines of this week's ASEAN meetings in Manila.

Dow Jones reported ASEAN and MITI will work together to develop electronic commerce in the region and build export promotion agencies in the Asean bloc, the statement said.