ASEAN to review financial warning system

ASEAN to review financial warning system

MANILA (AFP): Southeast Asian finance ministers are to review the progress of an regional financial warning system at a meeting here this week, a senior Association of Southeast Asian Nations (ASEAN) official said Tuesday.

The surveillance mechanism, in effect for a year, serves as an instrument of "peer review" to warn members, many of them caught in the vortex of the Asian financial crisis, of developments that could lead to similar shocks in the future.

"It's really difficult to say an adjustment in policy has been due to the peer review" mechanism, said ASEAN secretary-general Rodolfo Severino, who described its scope as limited by the indicators each member is willing to volunteer.

No single country has been singled out to mend its ways because this is not the purpose of the review, he said.

"The value of the process is not the calling of members to account or anything like that. At the very least, we have a better idea of knowing what's happening."

Flawed policies by ASEAN countries like Thailand, Indonesia and the Philippines have been blamed for the mid-1997 currency meltdown that led to the massive capital flight that brought the region to its knees.

Severino said the finance ministers, who will be meeting ahead of an informal ASEAN summit Sunday, will "receive, review and consider the surveillance report" to be submitted by ASEAN deputy finance ministers and central bank deputy governors who met in Hanoi earlier this month.

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

"The finance ministers are expected to issue a statement which will touch partially on the surveillance report. I doubt very much if they will have the report itself published, but I think they will say enough about it to be of interest to people."

It will be the second report to be circulated among ASEAN after one was issued in the Vietnamese capital last year.

Severino said the mechanism, run by the Jakarta-based ASEAN secretariat with the technical support of the Manila-based Asian Development Bank, looks at macro-economic trends, short-term capital flows and other data that may "indicate some problems and also some areas where further measures are to be undertaken."

He said officials from ASEAN countries are being trained for the monitoring process.

This is important because "what we have found out is that the level of financial expertise of some of the countries in ASEAN really need to be raised," he said, without elaborating.

ASEAN leaders also expected Prime Minister Keizo Obuchi to spell out Japan's aid plan for the region recovering from a financial crisis during the summit, he said.

"We expect the summit to review the result of the Okuda mission with respect to several ASEAN countries," Severino said.

Obuchi, who arrives here Saturday, had set up a 600 billion yen (five billion-dollar) fund last year for countries affected by the Asian crisis.

Last August he sent a mission, led by Toyota Motor Corp. president Hiroshi Okuda, to the region to help South Korea, Thailand, Malaysia, Indonesia, the Philippines and Vietnam draw up policies to ensure sustainable recovery from the crisis.

"ASEAN expects from Japan full cooperation in its areas of interest, development projects, social safety nets, (and) human resource development," as well as "support for the projects and activities" under ASEAN's Hanoi plan of action, Severino said.