Currency crisis won't affect APEC forum: U.S.

JAKARTA (JP): A senior United States official is confident that the Southeast Asian currency crisis will not have irreparable long-term effects nor be detrimental to the Asia Pacific Economic Cooperation (APEC) forum.

U.S. Coordinator for APEC, John Wolf, said here yesterday that APEC members in the region were generally ready to enter the free trade era, but the currency crisis made it more difficult because it focused attention away from long-term APEC agendas.

"The currency instability now makes it a little more difficult to concentrate on a long-term agenda," he said.

Speaking to journalists, Wolf said countries affected by the currency crisis must pursue sound policies which would help encourage growth.

He said in line with APEC's goals, the forum helps to foster sound economic policies which can help propel growth further.

APEC is an economic forum aimed at liberalizing trade and investment in the Asia-Pacific.

Developed members of the forum have committed to breaking down trade barriers by 2010 while developing ones by 2020.

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

The forum will hold its fifth informal leaders meeting in Vancouver, Canada, next month.

APEC members in Southeast Asia, namely Thailand, Malaysia, the Philippines and Indonesia, have been hard hit by the sudden depreciation of their currencies.

Wolf said there was no point in looking back. "We have to look ahead and keep moving," he said.

"It is a tough time but we cannot say that something has crashed and cannot be restored."

Wolf maintained that his government would like to see the region fully recover from this setback since unfavorable conditions here could also affect the United States.

He said that millions of jobs in the United States were dependent on the region's economic well-being.

"If this region hurts we hurt too," he said.

Attacks on Southeast Asian currencies this week were the most powerful since the regional currencies buckled under massive selling after the de facto devaluation of the Thai baht on July 2.

Thailand was forced to allow its currency to slide against the dollar, unleashing the world's worst financial storm since Mexico's near-collapse in 1995.

The baht float followed the devaluation of the Philippine peso. Malaysia failed to defend the ringgit and Indonesia was forced to remove a monetary regime that kept its rupiah within a band against the greenback.

The free float of the currencies had already immensely eroded their values against the U.S. dollar.

Since early July 1, the rupiah has dropped by over 40 percent.

In Manila, Canadian deputy foreign affairs minister Lee Edwards said the Southeast Asian currency crisis would be likely discussed in meetings of the Asia Pacific Economic Cooperation (APEC) forum.

Edwards, who is also chairman of APEC's senior officials' meetings, said such discussions were "pretty much inevitable".

"When leaders meet, I think it is safe to say they will reflect upon the discussions by the finance ministers and central bank governors on this issue and perhaps provide some directions," Edwards was quoted by AFP as saying. (mds)