Leaders say SE Asia at 'defining moment'

Leaders say SE Asia at 'defining moment'

HONG KONG (AFP): Southeast Asian leaders agree that the
region's currency turmoil will now force an examination of why
the "Asian miracle" was derailed and how to it get back on the
road to growth.

While Malaysian Prime Minister Mahathir Mohamad continues to
blame the whole world for economic turmoil, politicians,
financiers, industrialists, senior officials and experts in Hong
Kong for the East Asia Summit took a much more pragmatic view.

"We are at a defining moment in this region," Kishore
Mahbubani, permanent secretary of Singapore's foreign affairs
ministry said during the round-table finale to the summit
organized by the World Economic Forum.

"What happened this year came as a shock for the policy makers
in all capital cities of the region and the leaders are still
reeling from this massive hit.

"But unless you are downright stupid, you have to sit back and
reassess where you are at and what went wrong," he said,
predicting that would take 12-18 months.

There was a rather broad agreement at the conference on what
action was needed to get on top of the currency and stock market
turmoil and the reforms which must be undertaken.

Delegates saw a need for a more flexible exchange system, the
reconstruction of banking, the need for laws and surveillance of
international standards, to look for quality and not only
quantity in growth and to reinforce regional monetary
cooperation.

Consensus was equally strong that given the strength of the
region's economic fundamentals, ranging from high saving rates to
entrepreneurship and the attention given to education, sustained
growth must return after two or three difficult years.

But there was less unanimity on the pursuit of opening
economies and easing trade restrictions.

"Deregulation is as difficult for Singapore as regulation is
to Hong Kong, " Woo Chia-Wei, head of the Hong Kong University of
Science and Technology, said during the debate.

Some delegates, a minority, called on East Asia to consider
the structures and political behavior that led to the financial
imbalance.

With the regional currency crisis lasting longer and having a
more severe impact than first thought, the debate on the cause
and the solutions has only just begun.

Australian Foreign Minister Alexander Downer said the East
Asia situation was certain to dominate the next Asia Pacific
Economic Cooperation (APEC) summit in Vancouver at the end of
November.

Mabubhani believed it would be the same at the Association of
Southeast Asian Nations (ASEAN) summit at Kuala Lumpur in
December to which the leaders of Japan, China and South Korea
have also been invited.