Malaysia calls for 'Buy ASEAN' drive to curb crisis

Malaysia calls for 'Buy ASEAN' drive to curb crisis

KUALA LUMPUR (Reuters): Malaysian Prime Minister Mahathir Mohamad urged Southeast Asian nations on Saturday to lift themselves out of financial crisis by buying each others' goods and shunning more expensive foreign products.

Mahathir issued his new prescription for the region's mounting economic ills as foreign leaders began arriving in the Malaysian capital for a summit of ASEAN, the nine-member Association of South East Asian Nations.

The leaders of China, Japan and South Korea were to join their ASEAN counterparts at the meetings set to start on Sunday. It will be the first time the heads of state or government from so many Asian nations will gather without Western representation.

Mahathir set the tone for the summit with a call for a "Buy ASEAN" campaign to take advantage of the region's sharply devalued currencies which have made goods from outside of the area more expensive.

"Of course we would prefer to sell outside of ASEAN in hard currency and earn more foreign exchange. But where we can be competitive in each others' market we should buy ASEAN," the summit host told a business conference in the Malaysian capital.

Mahathir said ASEAN countries should focus on buying goods from each other as prices in local currencies had fallen, and as a last resort countries could barter with each other to boost trade.

"The result of the increase in trade between the countries of ASEAN will help cushion off the effects of devaluation and shorten our recovery period," he said.

Asian currencies and stock markets have been roiled since July by fears of asset bubbles and excessive spending. Thailand, Indonesia and South Korea have turned to the International Monetary Fund and global donors for rescue packages worth over $100 billion

Senior ASEAN officials who met in Kuala Lumpur to prepare for the summit said the economic crisis would dominate the agenda.

"You can expect a separate statement on the financial situation," Kovsak Chutikul, director general of economic affairs at the Thai Foreign Ministry, told reporters after meetings including representatives of China, Japan and South Korea.

Kovsak said officials discussed a proposed regional surveillance mechanism which would be coordinated with the IMF as well as an "early warning system" that would signal economic troubles before they mushroomed.

The Thai official said the IMF needed to be strengthened to cope with the crisis, which he said was no longer national or regional but global in its effect.

ASEAN leaders were expected to express "continued confidence in the basis economic growth of the region" during the three-day summit starting on Sunday, the Thai official said.

ASEAN now comprises Malaysia, Singapore, Indonesia, Thailand, Philippines, Brunei, Vietnam, Myanmar and Laos, with Cambodia still waiting on the sidelines for a politically appropriate time to take up membership.

ASEAN leaders were to be joined by Chinese President Jiang Zemin and the prime ministers of Japan and South Korea for the informal summit in the 30th anniversary year of the grouping.

The first ASEAN leaders to arrive in Kuala Lumpur on Saturday were Senior General Than Shwe, chairman of Burma's State Peace and Development Council and the country's prime minister, and Brunei's Sultan Hassanal Bolkiah.