KL summit to focus on Asian financial woes

KL summit to focus on Asian financial woes

KUALA LUMPUR (Reuters): Financial upheaval will dominate discussions next week involving the leaders of a dozen Asian nations including China, Japan and three recipients of bailout packages worth more than US$100 billion.

Malaysian officials said the nine members of the Association of South East Asian Nations (ASEAN) would try to close ranks with China, Japan and South Korea over ways to combat the turmoil that has cast a pall over the region's economies.

"The whole region is in financial turmoil, affecting the economies," Malaysian Foreign Ministry secretary-general Abdul Kadir Mohamad said. "We expect the nine plus three to discuss and maybe agree certain principles."

Last week finance ministers from ASEAN member states and six other nations including Japan and South Korea agreed to provide ad hoc aid to embattled regional economies in conjunction with the International Monetary Fund.

The IMF has put together rescue packages for Thailand, Indonesia and South Korea which are expected to total some $114 billion. The IMF will put up some $35 billion.

But they stopped short of endorsing a plan advocated by Malaysian Prime Minister Mahathir Mohamad to establish a standby fund independent of the IMF and its austerity programs.

Western nations say Mahathir's plan would undercut the IMF and weaken the region's desire to take strong corrective action.

"We will discuss the Southeast Asian, or Asian now, financial turmoil again," Philippine President Fidel Ramos said in his weekly news conference on Wednesday.

The heads of state or government of the nine ASEAN member states -- Brunei, Myanmar, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam -- will meet their counterparts from China, Japan and South Korea on Dec. 15-16.

They will be joined by United Nations Secretary-General Kofi Annan, in Malaysia on an official visit from Dec. 14 to 17.

The "informal" summit celebrating ASEAN's 30th anniversary is the latest meeting devoted largely to the financial woes.

Stephen Leong, assistant director general of Malaysia's Institute of Strategic and International Studies, said ASEAN members states would be looking for a signal from Chinese President Jiang Zemin that Beijing, to date largely unscathed by the financial turbulence, would not devalue its currency -- a move that would punish ASEAN countries.

A Chinese Foreign Ministry spokesman said last week that Jiang would stress regional and global cooperation to prevent the countries from being attacked by "excessive speculation".

Rival

China's rival Taiwan has offered to provide some $4 billion in aid to the region, and ASEAN could press Beijing to turn a blind eye to the offer, Malaysian officials said.

ASEAN states will be watching Japanese Prime Minister Ryutaro Hashimoto for an indication of whether Tokyo will play a more active role in helping the region, including pledging to open its large market to ASEAN goods, Leong said.

Abdul said the 12 leaders would also discuss a summit set for next April in London between the 15-member European Union, China, Japan, South Korea and ASEAN members.

A meeting set for last month between the EU and Asian nations was postponed because of disagreement over Myanmar.

Myanmar, which joined ASEAN in July, has been criticized by the West for human rights abuses and for curbing political activities of the opposition led by Nobel laureate Aung San Suu Kyi. The EU has suspended all high-level contacts with Myanmar.

The leaders were expected to sidestep a thorny disagreement over the Spratly islands in the South China Sea. The group of potentially oil-rich islets and reefs is claimed in whole or in part by China, Vietnam, Brunei, Malaysia, the Philippines and Taiwan.

ASEAN leaders, who will meet separately on Monday before gathering with their East Asian counterparts, were expected to be briefed on Cambodia but not decide on its membership.

Cambodia was to join ASEAN last July along with Myanmar and Laos. But the bloody coup on July 2 in which Second Prime Minister Hun Sen ousted First Prime Minister Norodom Ranariddh led ASEAN to postpone its membership.