Clinton calms fears on Asian crisis

By Meidyatama Suryodiningrat

VANCOUVER, Canada (JP): Ahead of a meeting of 18 leaders of the Asia Pacific, United States President Bill Clinton led the way in calming fears over Asia's economic crisis, confidently describing them as "little glitches" that can be worked out.

"I think this is a time for confidence in the future of Asia and confidence in the future of our relationship with them," Clinton said here Sunday local time.

"We have a few little glitches in the road here. We're working through them," he added.

Clinton is in Canada's third largest city to attend a leaders meeting of the Asia Pacific Economic Cooperation (APEC).

APEC comprises Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, Malaysia, Mexico, New Zealand, Papua New Guinea, the Philippines, South Korea, Singapore, Taiwan, Thailand and the United States.

The forum aims to establish comprehensive trade and investment liberalization by 2010 for developing countries and 2020 for developing ones.

This year's meeting comes amid a financial crisis which has hit Southeast Asian countries and spread to South Korea last week.

On Friday, South Korea joined Thailand and Indonesia in calling for emergency assistance from the International Monetary Fund (IMF).

Even as Clinton was downplaying the Asian crisis, reports were filtering in that Japan's fourth largest brokerage, Yamaichi Securities, had collapsed.

Clinton signaled that the leaders in their two-day meeting which begins Monday (today local time), will likely reaffirm their support for the results of a meeting of 14 APEC finance ministers from Nov. 18 to Nov. 19 in Manila.

Clinton noted that the IMF should take the lead in these efforts with the support of developed countries whose role he described as a "backup stabilizing reassurance support".

But he stressed that the afflicted economies themselves must undertake "responsible policies that inspire investor confidence".

Speaking after a bilateral meeting with Clinton, Canadian Prime Minister Jean Chretien expressed similar confidence.

"We believe that Asia Pacific countries are not facing a massive recession ... These countries are still growing," he said.

Chretien defended the governments of the countries hit by the crisis saying that the situation was "not necessarily" their fault.

"It was a lot of people borrowing short-term money to build hotels and office buildings and so on. And suddenly, with the speculation, they're trapped," he argued.

Fred Bergsten, former U.S. Assistant Secretary of the Treasury for International Affairs, said the APEC leaders meeting can be considered a "finance summit" to help calm the financial turbulence threatening markets throughout the region.

Speaking at a meeting of top business executives here, Bergsten suggested that the leaders launch a new regional arrangement to reinforce efforts by the IMF to help prevent a future monetary crisis.

"The IMF did its job in foreseeing and warning of the impending problem. The systematic difficulty was that Thailand balked and no one pressed it to act," Bergsten said, adding that the best means would be peer pressure because they would be effected by the fallout of the crisis.

APEC leaders must reach some sort of agreement on liberalizing their financial services sector.

"Every crisis in the region, ranging from Japan and Korea in Northeast Asia, to Thailand and Indonesia in Southeast Asia, was caused primarily by the weakness of national banking and financial systems," said Bergsten who formerly headed the APEC Eminent Persons Group.

"Reform of those systems ... is an essential element in the restoration of confidence in the currencies and economies of every one of these countries," he added.

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