Financial crisis should top APEC agenda, U.S. says

Financial crisis should top APEC agenda, U.S. says

WASHINGTON (AFP): The Southeast Asian economic crisis should
top the agenda at an upcoming summit of Asia-Pacific leaders, a
U.S. official said Thursday, calling for an IMF-centered response
to regional financial turmoil.

John Wolf, U.S. coordinator for the 18-member Asia-Pacific
Economic Cooperation (APEC) forum, told a congressional
subcommittee that APEC leaders would also discuss efforts to
combat the haze blanketing the region as well as global warming.

The summit is to be held in Vancouver Nov. 24-25 following a
meeting of APEC foreign ministers Nov. 22-23.

"Millions of Americans are of Asian and Pacific descent," Wolf
told a House of Representatives subcommittee on Asia and the
Pacific.

"Thousands of U.S. companies are involved in the region and
millions of American jobs depend on Asia's well-being ... When
Asia hurts, we hurt."

For that reason, he said, President Bill Clinton and his
administration "expect the Southeast Asia financial crisis to be
at the top of the leaders' agenda."

But Wolf hinted that one proposal Washington was unlikely to
support would see the establishment of a regional fund, first
proposed by Japan, to respond to acute economic disruptions in
the area.

Several Southeast Asian nations have backed such a mechanism
and hope to win U.S. support at a meeting of U.S. and Asian
finance officials in Manila Nov. 18-19.

U.S. Deputy Treasury Secretary Lawrence Summers on Wednesday
made clear the administration's discomfort with the notion of a
regional mechanism, insisting that the International Monetary
Fund was the only institution capable of providing assistance
tied to strict reforms.

It was a point underscored by Wolf on Thursday.

"It is important to ensure that when countries receive funds
from outside sources ... that the resources will be used to
support an adjustment program that supports the necessary
measures to restore financial stability," he maintained.

"And we believe the IMF is the best positioned to assure a
credible adjustment program."

When not debating means to shore up once-thriving regional
economies made vulnerable by sharp currency devaluations and
over-extended financial sectors, APEC leaders are also likely to
grapple with pressing environmental concerns.

Wolf said the United States is looking for ways to boost its
aid to Indonesia, where it already has three C-130 aircraft and
technical personnel to combat huge forest fires responsible for a
thick covering of smoke and haze choking parts of several
neighboring countries.

But he added that there would also be a broader discussion of
climate change, although it was unlikely the summit would come to
unified position.

The summit comes just several weeks before a United Nations
gathering in Kyoto to adopt international curbs on carbon dioxide
emissions, blamed for a worrisome rise in the earth's atmospheric
temperatures.

The United States, the world's biggest polluter, has been
chastised by its European partners for its failure to adopt
strict limits on "greenhouse gases" and for pressuring developing
countries to sacrifice a bit of growth and cut back on carbon
emissions.

But according to Wolf, "what the haze makes clear is that
threats to the environment ... are not just coming from the
developed countries. It's a problem every one shares and it's a
solution in which every one must participate."

He said the United States also wants the summit to act on
Clinton's proposals for electronic commerce as well as to
identify specific economic sectors for trade liberalization and
to take steps toward standards harmonization.

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

Rubin

In a related development, Treasury Secretary Robert Rubin said
on Thursday he did not know whether the recent period of economic
woes in Southeast Asia was over or whether further assistance for
the region might be needed.

"I think it's hard to judge whether we've gone through the
instability and how things will settle out or whether there's
more instability ahead," Rubin said in an interview with CNN's
Moneyline.

His remarks came a day after the International Monetary Fund
(IMF) approved a $10 billion loan for Indonesia as part of a huge
international package, the third IMF bailout for Asian countries
in recent months.

The United States would work with the IMF on future programs
should they be needed, he added. "We will work with the IMF on
IMF-centered programs. If we are involved, it will always be in
support of an IMF program," he said.

Rubin reiterated that the crisis in Southeast Asia was
unlikely to have a major impact on the U.S economy.
"I don't think at this point that the instabilities will have a
significant effect on the United States economy," he said. "But
it is enormously in our interest that Southeast Asia work through
this successfully."

The Treasury chief added he was confident the region's long-
term economic prospects remained positive, noting the Southeast
Asian countries' "substantial long-term strength."