ASEAN to seek changes in Japan

ASEAN to seek changes in Japan

MANILA (Agencies): The Association of Southeast Asian Nations
(ASEAN) will call on Japan to urgently reform its banking system,
cut taxes and push through a fiscal stimulus package, according
to a draft statement prepared for a meeting of foreign ministers
next week.

The draft statement on Asia's financial crisis is to be issued
by ASEAN's chairman, Philippine Foreign Minister Domingo Siazon,
at the end of two days talks in Manila between ASEAN and 10 other
nations.

The draft, which officials say is unlikely to change much,
states that the foreign ministers welcomed Japan's recent
announcement that it will restructure its financial system,
accelerate a fiscal stimulus package and reform its tax system.
"They urged Japan to implement these policies as a matter of
highest priority," Siazon says.

ASEAN comprises Brunei, Indonesia, Laos, Malaysia, Myanmar,
Philippines, Thailand, Singapore and Vietnam.

The other nations attending the talks include the United
States, Japan, China, Russia and the European Union.

The statement said the ministers reaffirmed their support for
a central role for the International Monetary Fund in efforts to
overcome the region's financial crisis.

Siazon said the ministers also recognized the need for the
private sector to assess risks adequately and bear an
"appropriate share of the burden of the adjustment process"
resulting from loan defaults.

He said the ministers welcomed the progress made by some ASEAN
countries in implementing economic reform programs, despite the
recent turmoil in financial markets. The draft identifies no
countries by name.

It also applauds China's "firm commitment" to maintaining the
stability of its currency. Siazon's statement also stresses the
importance of continued access to trade finance, especially for
small and medium-size companies, in the efforts of Asian
countries to revive economic growth and exports.

Siazon expressed confidence yesterday that more than two ASEAN
members will support a Thai proposal for the group to publicly
and frankly discuss problems affecting the region.

Amid strong opposition among senior ASEAN officials on the
move to adopt a policy of "flexible engagement" in lieu of the
group's cardinal principle of non-intervention, Siazon said the
discussions were deterred only by a "nuance" in terms.

The proposal will still be discussed by ministers during
informal meetings, such as a dinner on July 23 before the two-day
ASEAN Ministerial Meeting. If the ministers fail to resolve the
issue during the dinner meeting, the proposal will be discussed
formally during the ministerial meeting starting July 24,
according to Philippine Foreign Undersecretary Lauro Baja.

Thailand also has submitted an informal paper discussing its
recommendation.

"In the Thai paper, they maintained the policy of non-
intervention as a universal concept in the conduct of relations
among nations should stay," Siazon said. "However, they feel that
since in the view of our growing integration and the recent
phenomenon that when events occur in one country these events
have impacts on other countries, ASEAN members should be free to
make open, public and frank statements on these issues."