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."