ASEAN to set up new short-term aid facility

By Devi M. Asmarani

KUALA LUMPUR (JP): Finance ministers of the Association of Southeast Asian Nations (ASEAN) agreed here yesterday to establish a new short-term facility for members in need of assistance.

The group also agreed to establish and implement a regional economic surveillance mechanism soon to prevent a monetary crisis similar to the one currently affecting the region.

Thailand finance minister Tarrin Nimmanahaeminda told journalists the ASEAN finance ministers also agreed to form a comprehensive package of policies to deal with the problem of the currency crisis.

"The most important topic of our discussion is to establish a mutual stabilization structure among ASEAN countries," said Nimmanahaeminda, also the chairman of the meeting.

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

Philippines secretary of finance Roberto F. de Ocampo said the new short-term facility would be a supplement to the International Monetary Funds (IMF) programs, but would be independent of the IMF's institutional framework and operational jurisdiction.

"There have been misunderstandings about the particular facility during the Manila meeting (after it was proposed last month)," De Ocampo said.

The facility would supplement the IMF program, if and when an economy within the region which had entered the IMF program needed additional funds in a short time, he said.

However, he said it was yet clear where funds for the facility would come from, until the group's members conduct bilateral meetings with Japan and other donor countries.

The group agreed yesterday to emphasize preventive efforts to avoid the emergence of risks that would precipitate a crisis.

Nimmanahaeminda said the regional surveillance system would include regularly held meetings of ASEAN finance ministers.

"Finance ministers would be in quick touch with each other on a regular basis. The idea is to create some sort of a comfort through mutual surveillance," he said.

But he said the group had not decided whether the meeting would be held quarterly or yearly.

He said the group would meet with the Asian Development Bank (ADB) to develop criteria and basics to be used as a framework for discussions for the surveillance system.

The objective was to exchange information among member countries to discuss development happening in their respective countries, he said.

He said the system would draw up certain standards to adhere to, and would detect early changes that resulted from development in the region.

"We will take it up with the ADB and once we get to the initial step we can visualize the concept into an operational one," he said.

The group also touched on the need to continue and extend the bilateral financing arrangement they had made among themselves prior to the meeting, he said.

Malaysia, Brunei and Singapore were some of the countries which had agreed on bilateral financial aid to Indonesia to cope with the country's financial crisis.

Malaysia's Deputy Prime Minister and Finance Minister, Anwar Ibrahim said yesterday's meeting was the first finance minister meeting in ASEAN which deliberated bold, open and frank views.

"I think we have actually begun a meaningful conceptualization of a regional surveillance within ASEAN," he said.

The ASEAN finance ministers' meeting, scheduled to end today was opened by Malaysia's Prime Minister Mahathir Mohammad yesterday.

The ministers also met yesterday with the managing director of the IMF, Michel Camdessus, and the World Bank's Senior Vice President, Joseph E. Stiglitz.