Asian leaders shrug off crisis, seek unity

Asian leaders shrug off crisis, seek unity

TOKYO (AFP): Asian leaders called here on Thursday for a more united region, including an expanded role on defense, as the tiger economies slowly got back to their feet.

Philippine President Joseph Estrada took the lead in calling for a bigger Asian role on the world stage at a conference that also drew Malaysian Premier Mahathir Mohamad and other regional policymakers.

He called for new powers to be given to the Association of Southeast Asian Nations' Regional Forum.

It should have "the mandate and the capability to undertake preventive diplomacy, conflict-prevention and conflict-resolution initiatives and activities," Estrada told the symposium.

The forum, which groups ASEAN and its dialog partners, should be able to respond to disputes or conflicts, he said, while stopping short of explaining what such a response should entail.

Alternatively a new East Asian security arrangement should be set up, Estrada said.

The Philippine leader, who also called for Asian nations to bind their economic futures together with a single regional currency, was alone in calling for a stronger military role.

Japanese Foreign Minister Masahiko Komura, for example, stressed that the U.S. military presence in Asia was "important and essential" to regional stability.

But the theme of an Asia standing on its own feet was echoed by other leaders, most of whom declared that the region had emerged from the worst of the financial crisis that erupted in July 1997.

Asia as a whole was at an "early stage of recovery," Malaysia's outspoken leader said.

Mahathir pressed for reviving an idea, proposed by Japan, of creating an Asian version of the International Monetary Fund.

"It is unfortunate that the Asian Monetary Fund has not started at the time because it was at this time when money was most needed," he told reporters before the symposium.

Mahathir later told the conference that Asia must work for fundamental reform of the financial system. But "in the face of the world's failure to achieve this, each nation must fend for itself as best it can."

South Korea, lauded by many countries in the West for its deep restructuring program, echoed the Malaysian leader's criticism of the West's failings over the Asian crisis.

"There has been little effort to improve prudential regulation and supervision of financial institutions either at the global or regional level," said Lee Hun-jai, chairman of South Korea's Financial Supervisory Commission.

A key lesson of the financial crisis was that the breaking down of barriers to money movements had increased their volume and volatility, Lee said.

But "even after two years of intense debate on the need to reform the international financial system, little progress has been made in building a new architecture for efficient crisis management and prevention," he added.

"Worse yet, G-7 countries have dominated these discussions." Leaders of the Group of Seven (G-7) nations -- Britain, Canada, France, Germany, Italy, Japan and the United States -- are to discuss reform of the global financial system at their June 18-20 Cologne summit.

"Emerging market economies are hardly represented and, as a result, they have not been able to articulate their views," Lee said.

"To have a stronger voice in the ongoing debate, East Asian countries must close ranks."

Indonesian Foreign Minister Ali Alatas said a key lesson of the crisis was that "people matter" and that while liberalization was desirable, "in the long run it will only work for the economy if the necessary prudential safeguards are in place."