Asian fund to be finalized next month: De Ocampo
Asian fund to be finalized next month: De Ocampo
TOKYO (AFP): Philippines Finance Secretary Roberto de Ocampo forecast in remarks published yesterday that a proposed Asian monetary fund would be finalized in December.
De Ocampo said regional self-help was crucial amid Asia's financial market turmoil.
In an interview with Asahi Evening News, he said the proposed fund would be discussed in Manila on November 18 when vice finance ministers from Japan and Association of Southeast Asian Nations (ASEAN) are to hold talks.
"We are planning to present the results of discussions at the APEC (Asia Pacific Economic Cooperation) summit meeting scheduled for November 24 and 25 in Vancouver," the secretary said.
De Ocampo added that "specifics might be finalized at the ASEAN summit meeting," when ASEAN leaders are to hold an informal summit meeting in Malaysia in December.
ASEAN groups Brunei, Burma, Indonesia, Laos, Malaysia, the Philippines Singapore, Thailand and Vietnam.
Regional currency and stock markets have been beset by turmoil since Thailand effectively devalued its currency, the baht, on July 2.
"The idea of establishing a self-help mechanism has become compelling now that Asia's crisis has become more widespread than initially anticipated," de Ocampo said.
"Even Hong Kong and Singapore have not been spared from what was termed as a contagion effect," he said.
"It was a wake-up call all around, calling for effective measures to be brought to bear so that what is a temporary situation-- I would consider this is temporary -- will not turn into a longer-term difficulty," he said.
"One lesson from the current crisis is that Asian economies have become so influential on the global economy," de Ocampo said.
"What we are experiencing in Asia might not be a mere period of correction after sustained economic growth.
"We expect to take a look at the ongoing turmoil in Asia and have a better idea on what an appropriate mechanism should be," he said.
Japan and Southeast Asian countries proposed establishing the fund during September's conference of the International Monetary Fund (IMF) and the World Bank in Hong Kong.
But the IMF has warned against the proposed Asian bailout fund, saying it could undercut conditions attached to its economic assistance.
The Philippine finance secretary, however, said the proposal should be supported by the IMF and the United States.
"Even the United States did not expect that a situation developing in Hong Kong could trigger the worst drop in the Dow Jones industrial average since 1987," he said, referring to recent stock market turmoil.
"The proposed facility would not rival the IMF," he said. "We are not trying to come up with an interventionist pool simply to prop up economies hit by a crisis."
He said: "The mechanism would provide financial markets with better information to avoid speculation and also encourage countries to undertake preventive measures before things get out of hand.
The secretary called on monetary authorities in the region to hold talks more often to prevent future financial crises.
"Finance ministers and central bank governors probably (should) agree to hold more regular meetings to assess regional economic situations on a more timely basis," he said.