ASEM starts to discuss financial crisis

ASEM starts to discuss financial crisis

BANGKOK (AFP): Asian and European finance ministers assembled here yesterday to seek ways of dousing Southeast Asia's raging financial crisis and lay the ground for cooperation into the 21st century.

Thai Finance Minister Thanong Bidaya said the Asia-Europe meeting (ASEM) would aim for "constructive consultations" on ways to stabilize regional financial markets which went into a tailspin after Thailand floated its currency on July 2.

"I think it is going to be a very timely conference after all this... money and foreign exchange problem in this region," said Thanong, who will chair Friday's meeting of 25 countries.

French Finance Minister Dominique Strauss-Kahn said it would be "very useful" to discuss what he described as a "very deep crisis" and "what is coming after."

But he said after a meeting with Thanong that "the biggest problems" were behind, adding that the crisis had highlighted hidden problems and reminded the region that "things have to be done."

Ministers and top officials from the 25 member-countries of the Asia Europe Meeting (ASEM) streamed into the Thai capital under tight security ahead of the group's first finance chiefs meeting.

But the ministers are likely to see their official agenda of setting the stage for long-term cooperation overshadowed by concerns on the monetary storm sweeping through the seemingly invincible Asian economic Tigers.

Malaysia's Deputy Prime Minister and Finance Minister Anwar Ibrahim confirmed when arriving at the conference venue that the monetary and financial crisis would occupy the officials' time.

"It certainly will be reviewed," he told reporters. Singapore Finance Minister Richard Hu said ministers of the Association of Southeast Asian Nations (ASEAN) would meet late Thursday, while sources said the top item on the agenda would be financial stability.

The region, led by embattled Thailand, has seen its currency and stock markets badly hit by a wave of financial instability that has engulfed the region for the past four months.

Southeast Asian currency and stock markets have gone through non-stop turbulence since Thailand floated the baht, with its economy in deep crisis amid bad debt fears surrounding its beleaguered finance sector.

The Philippine peso, the Indonesian rupiah and the Malaysian ringgit have all hit all-time lows under speculative attacks while even the normally robust Singapore dollar has not been spared from the regional contagion.

"Everybody is following the situation in Asia very carefully," European Union Ambassador to Thailand Michel Caillouet said as ASEAN senior officials prepared for an informal huddle here Thursday.

"This meeting will be a good opportunity to share our experiences as in Europe we have been working for a very long time, for more than 40 years, to develop an (integration) process."

EU Finance Commissioner Thibault de Silguy urged Asian economies to open their markets, boost regional cooperation and step up regulation of their financial markets to help foster financial stability.

ASEM was formed at a meeting here two years ago to boost cooperation and development between the two continents. It includes the 15 EU members, seven ASEAN members as well as Japan, China and South Korea.

The seven ASEAN members meeting here with their European counterparts are Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. Recent ASEAN members Burma and Laos were not included.

Currency -- Page 10