Mahathir continues efforts for AMF

Mahathir continues efforts for AMF

BEIJING (AFP): Malaysian Prime Minister Mahathir Mohamad Thursday continued calls for greater financial and security cooperation among Asian countries and urged China to join Malaysian efforts to build a stronger "regional grouping" of East Asian countries.

In a speech given at the Malaysia-China Forum in Beijing, Mahathir urged the establishment of an Asian Monetary Fund that could replace the International Monetary Fund as the first line of defense in case of economic crises.

"China and Malaysia should examine how together with our neighbors we can realize the Asian Monetary Fund proposed by Japan," Mahathir said.

"The unprecedented economic crisis has demonstrated the vital need for the setting up of a regional fund so that the economies encountering critical financial problems can turn quickly for assistance so as to prevent rapid deterioration," he said.

Mahathir, who is on a three-day working visit to China, earlier Thursday met with Chinese President Jiang Zemin and on Wednesday held bilateral talks with Premier Zhu Rongji.

His visit marks the 25th anniversary of diplomatic relations between the two countries.

During his speech he further criticized the "harsh conditions" of the International Monetary Fund, while saying IMF intervention in Indonesia was "a classic case to be avoided at all costs."

Mahathir has blamed free market hedge funds and currency traders for the Asian financial crisis and he again called on the Asian economies to work toward reforming the international financial system and regulating currency flows.

Asia also needed to strengthen the "ASEAN plus three (the Association of Southeast Asian States plus, Japan, South Korea and China)" forum and build a "regional grouping" which could be used as a third party to American and Western European economic and security dominance, he said.