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.