Asia told to fight corruption

Asia told to fight corruption

MANILA (Reuters): The United States said yesterday it would
encourage the return of investment to Asia but added that ailing
countries must take the bitter "medicine of economic reform" and
fight corruption.

"We also have to recognize that this crisis is not going to be
resolved by aid alone," U.S. Secretary of State Madeleine
Albright told American businessmen before she left Manila after
the annual meeting of the Association of Southeast Asian Nations
(ASEAN).

Foreign ministers who attended the meeting agreed ravaged
Asian economies needed foreign assistance to cope with the year-
long crisis but that this must go hand in hand with internal
financial reforms.

"In some countries, the medicine of economic reform will be
bitter. It requires that the old ways of doing business must
change. The consequences for workers and families caught in the
middle can be difficult and unfair," Albright said in a speech to
the American Chamber of Commerce.

"But this does not change the fact that reform is medicine. If
refused, the illness only grows worse."

The crisis began in Thailand in mid-1997 and rapidly spread,
causing many currencies and stocks to tumble and prompting
widespread bankruptcies.

Albright said direct foreign investment was essential to get
Asia back on track and "the United States is ready to work with
its partners in this region to encourage renewed investment".

But "competition must be encouraged...foreign investors should
be treated like domestic investors...corruption must be frankly
discussed and vigorously fought," she said.

"Economies powered by open and sound financial policies will
be better able to adjust to the global market than economies that
are closed and hobbled by financial favoritism."

She said Asian economies must accept that the current crisis
would not be resolved by aid alone.

"One thing aid cannot do is to make up for the billions of
dollars in new private investment Asian economies are losing,"
she said.