Mahathir urges China to back East Asia Fund proposal
Mahathir urges China to back East Asia Fund proposal
KUALA LUMPUR (Dow Jones): Prime Minister Mahathir Mohamad Monday resumed his call on China and other regional countries to back a proposal for an East Asia Fund, the national Bernama news agency reported.
The proposed fund will compliment efforts to increase economic cooperation in the region, Mahathir said.
He said the recent Asian financial crisis has demonstrated the need for such a fund to overcome shortcomings in the international financial system.
In the past Mahathir has frequently blamed currency speculators and hedge fund managers who, he said, had been largely responsible for starting the crisis by abruptly withdrawing large amounts of short-term funds, triggering regional financial instability.
Meanwhile, Mahathir also called on China to support the establishment of a proposed East Asia economic forum, an idea he mooted in 1990, to voice the region's positions on global economic and political issues.
China has expressed support for the forum in the past but has yet to formally say if it will join the grouping.
The United States, Australia and other nations not invited to join the proposed forum, often referred to as the East Asian Economic Caucus, say it could be divisive and interfere with a wider regional grouping, the Asia Pacific Economic Cooperation forum, or APEC, which Washington backs.
The members of the Association of Southeast Asian Nations, or ASEAN - Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand, Myanmar, Laos, Cambodia and Vietnam - generally support the EAEC concept.
Mahathir believes the region needs united clout in international forums which address trade, economic and political issues. ASEAN, although an up-and-coming economic group, does not have the economic clout of Japan and South Korea or the power status of China to get its views heard.
Japan has been hesitant to express public support for the forum, partly because of its close ties with Washington, while South Korea has not formally said whether it would join the grouping.
Separately, Mahathir announced that Malaysia's central bank, Bank Negara Malaysia and the People's Bank of China have signed a memorandum of understanding to expand banking transactions between both countries.
He didn't elaborate on the banking agreement, only saying the deal would facilitate increasing trade and investments between the two countries.
Mahathir was speaking at a dinner Monday to honor Chinese Prime Minister Zhu Rongji who is on a five-day official visit to Malaysia.