Asian economic chiefs outline reform commitment

Asian economic chiefs outline reform commitment

FUKUOKA, Japan (AFP): Finance chiefs outlined yesterday their commitment to reform at the Asian Development Bank annual meeting here as differences over the entry of North Korea simmered on the sidelines.

At the bank's 30th anniversary meeting, finance ministers and central bankers from major Asian economies vowed to stick to the road of reform.

Finance ministers and central bankers from China, the Philippines, Indonesia and Vietnam expressed confidence in reform and their economic futures.

India pledged to press ahead with change but without risking education and health.

The United States, meanwhile, called for change at the bank itself, urging that it give greater support to the private sector while maintaining its key role of easing poverty.

Indonesian Finance Minister Mar'ie Muhammad said his country's economy was likely to expand at a rapid pace this year with little sign of overheating.

"We are confident that the economy will again register strong economic growth in 1997," he told the annual meeting, citing the positive impact of recent deregulatory steps.

"Despite the strong expansion, the Indonesian economy has shown few signs of overheating," he said.

People's Bank of China governor Dai Xianglong forecast economic growth of eight percent and inflation below six percent in the next few years.

Dai said the Chinese economy had now "embarked on a track of sustained, rapid and healthy growth" following various concerted efforts.

"The macro economic adjustment that was primarily designed to overhaul inflation has reached expected goals," the central bank governor said.

He also promised to strengthen the role of Hong Kong as a key financial base after the British colony reverts to Chinese rule on July 1.

"Hong Kong's role as an international financial center will continue to be maintained and strengthened," Dai said.

Transformation

Philippine Finance Secretary Roberto de Ocampo said the country would accelerate economic reforms to sustain its recent transformation from the "sick man of Asia" to the region's "new tiger,"

"We shall not allow seeming success to lull us to sleep," he told the annual meeting of the Asia Development Bank (ADB).

"Indeed, this has been our prod to push further in the road of reform-comprehensive tax reform, deregulation and privatization, strengthening bank regulation and supervision, and more openness, transparency and depth in the capital market."

Indian Finance Minister P. Chidambaram joined his colleagues in vowing to press ahead with fiscal reforms but added that his government was not about to sacrifice spending on education and health.

"We can and we will bring about further reductions in the fiscal deficit, without impairing the capacity to enhance investments in key sectors of the economy, particularly the social sectors such as education and health," he told the meeting.

Vietnam's central bank governor Cao Sy Kiem said the country's economy showed "encouraging" signs during the first four months of this year and promised to push ahead with reform despite difficulties involved.

The United States called on the development bank to give greater support to the private sector in the region while maintaining its key role of easing poverty.

"The bank can play an increasingly visible and catalytic role in support of the private sector," US delegation chief Timothy Geithner said on the second day of the bank's annual meeting.

On the sidelines, meanwhile, South Korea supported North Korea's request to join the Bank, putting it at odds with Japan. "Considering the ADB's invaluable contributions to the rapid progress of the Korean economy, I think it is clear that North Korea would also benefit from ADB membership," South Korean Finance Minister Kang Kyong-Shik said.

Japan's Finance Minister Hiroshi Mitsuzuka said Sunday that Tokyo would consider North Korea's membership of the Manila-based bank. "Japan will consult with diplomatic authorities and other countries concerned and consider the matter cautiously," he said.