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.