G7 asked to set pace for reforms in Asia-Pacific talks

G7 asked to set pace for reforms in Asia-Pacific talks

KUALA LUMPUR (AFP): Senior Asia-Pacific central bank and
finance officials held talks Saturday on adopting reforms to
eject their economies out of crisis with a call to the G-7 to
keep its promise of regulating global finance.

The two-day meeting of finance and central bank deputies was
under the auspices of the so-called Manila Framework -- a
regional surveillance group formed in the Philippine capital four
months after the crisis broke out in July 1997.

"The first day discussions centered around reforms being
implemented in economies reeling from the crisis and recent
stabilization of financial markets, which is giving us a much-
needed breather," a Southeast Asian central bank official said.

The International Monetary Fund tabled several papers on the
global economic situation at the talks. The Asian Development
Bank (ADB) focused on the regional environment, the official
said.

Japan, whose giant economy must be hauled out of recession for
the region as a whole to recover, also briefed the meeting on key
banking reforms it wants to undertake.

Malaysia's second finance minister Mustapa Mohamad, in opening
remarks at the talks, said recent optimism about the crisis being
contained and the imminent recovery of Asia should not dampen the
Group of Seven industrialized nations' commitment to reform.

"At the same time, we urge that the design of new principles,
rules and guidelines be not confined to G-7 countries only,"
Mustapa said.

He also said Asia's views should not be ignored in the global
attempt to develop the so-called new global financial
architecture.

"We note that some of the Asian views have not been well
received in the past," Mustapa said.

"However as Asian governments are still in the midst of living
through the crisis they have received many invaluable lessons
that would be useful inputs for the new international financial
framework."

G-7 leaders last week called for changes in the global
financial structure and for more transparency on the part of the
International Monetary Fund (IMF).

Britain, Canada, France, Germany, Italy, Japan and the United
States pledged tighter regulation of international capital
markets and a new IMF rescue fund and a short-term line of credit
for countries that are not in crisis but are threatened by
devaluation and economic weakness.

These initiatives -- along with recent interest rate cuts in
developed economies -- would help boost liquidity and consumer
spending, indirectly buoying export-led Asian economies reeling
from the regional crisis, analysts say.

Asia's financial crisis was sparked off by the de facto
devaluation of the Thai baht in July 1997, which led to the rapid
depreciation of other currencies in the region, a stock meltdown,
depressed real estate prices and overall economic recession.

The Manila framework is aimed at putting in place a regional
monitoring mechanism to complement the IMF's global supervision,
with a cooperative financing arrangement with the Washington-
based Fund.

After the grouping's formation in Manila, officials met for a
second time in Tokyo in March followed by an ad-hoc meeting in
June centered around Japan's crisis and the plunging yen.

The Kuala Lumpur meeting is attended by Australia, Brunei,
Canada, China, Hong Kong, Indonesia, Japan, South Korea, New
Zealand, the Philippines, Singapore, Thailand and the United
States together with top officials from the IMF, the World Bank
and the ADB.

The meeting comes ahead of the Asia Pacific Economic
Cooperation (APEC) leaders' summit on 17-18 November.

APEC finance deputies ended their own meeting here on Friday
to provide talking points for their leaders.