ASEAN to discuss weak U.S. dollar

ASEAN to discuss weak U.S. dollar

Yeoh En-Lai, Associated Press, Singapore

With their economies still smarting from the last Asian
economic crisis, Southeast Asian finance ministers are expected
to meet Wednesday to discuss the dangers of the softening U.S.
dollar, America's towering budget deficit and plans to form a
European Union-style economic community.

Finance ministers from the 10-member Association of Southeast
Asian Nations will gather in Singapore where the dark clouds
coming from the U.S. are likely to be on the agenda, economists
say.

They met behind closed doors with Chinese, Japanese, South
Korean officials here on Tuesday.

Singapore's Deputy Prime Minister Tony Tan warned in January
that Washington's "unprecedented" budget deficit spending could
have negative repercussions in Asian countries that depend
heavily on exports to the United States. Several Asian central
banks, including Japan and Singapore, have intervened to prop up
the U.S. dollar.

Asian finance ministers are likely to discuss measures to slow
down the U.S. dollar's decline as they strive to protect their
economic growth, which is still recovering from a financial
crisis that swept the region in 1997, economists and officials
said.

"One can expect the U.S. dollar's effect on Asia to be
discussed behind closed doors," Standard Chartered's chief
regional economist Joseph Tan said.

The U.S. dollar has fallen 5 percent against the Singapore
dollar since September 2003. It also recently reached a record
low against the euro and an 11-year low against the pound.

"For export-oriented countries, there's not much else they can
do except intervene to stop the decline. The dollar will warrant
some kind of statement at the meeting," GK Goh Securities
regional economist Song Seng Wun said.

Asia's export-focused economies are already suffering from the
U.S. dollar's steady decline. A weak dollar makes exports more
expensive and slows growth in a region where economies have
already been severely battered by the war in Iraq, SARS and bird
flu in the past year.

Officials are also expected to discuss proposals from last
October's ASEAN summit in Bali where leaders agreed to push
forward on an Europe-like economic community by 2020.

The official agenda will focus on ASEAN's capital markets
progress, liberalization of its capital accounts and financial
services, and possible cooperation on a single currency.