SE Asian countries to examine emergency fund next wek

SE Asian countries to examine emergency fund next wek

KUALA LUMPUR (Reuters): Southeast Asian nations will consider
creating a special emergency fund to shore up confidence in the
region's economies at a meeting next week, a senior Malaysian
official said on Thursday.

Treasury Secretary-General Clifford Herbert said finance
ministers and senior officials of the Association of Southeast
Asian Nations (ASEAN) will discuss linking the new standby
facility to the International Monetary Fund (IMF).

"We'll be stressing to get the ASEAN ministers to begin to
present their views on trying to establish an ASEAN fund,"
Herbert told a news conference in the Malaysian capital.

Earlier this month, senior officials from Asia and beyond
agreed in Manila to offer bilateral aid to countries in trouble
on a case-by-case basis.

But faced with strong U.S. opposition, they stopped short of
supporting a permanent "Asia fund" of up to US$100 billion.

Japan had initially suggested the self-contained Asia fund to
stabilize the region's economies, arguing that IMF resources were
not enough to deal with Asia's mounting problems.

The IMF has in the last few months masterminded international
rescue packages for Thailand, Indonesia and South Korea.

But Western nations, led by the United States, fear that the
region's economies would fail to get their house in order if they
knew they could get financial help without having to go to the
IMF and submit to its lending conditions.

Herbert said the ASEAN standby fund would be part of the
initiative agreed to in Manila earlier this month to restore
confidence in the region's economies.

"It won't be very large, but it will just be there for
confidence building," Herbert said, adding there appeared to be
little opposition to the proposal provided the fund was linked to
the IMF. He did not give a figure for the fund's size.

"The Asian supplementary finance facility is not a fund,
really, it's a commitment. But the ASEAN fund can be different,
and this is what they're going to discuss," Herbert said. "Most
probably it will be in conjunction with the IMF."

ASEAN groups Brunei, Myanmar, Indonesia, Laos, Malaysia, the
Philippines, Singapore, Thailand and Vietnam.

Finance ministers from Australia, Myanmar, Hong Kong,
Indonesia, Malaysia, Philippines, Singapore and Thailand will
attend the meeting in Kuala Lumpur on Dec. 1-2, Herbert said.

Deputy finance ministers from Brunei, China, Japan, Laos,
South Korea, Vietnam and the United States will also participate.

A Malaysian official said Japan and the United States were
opposed to a permanent Asian fund to rescue economies, but that
ASEAN members seemed determined to create their own facility as a
symbol of their commitment to stability.

"We are looking at ways we can restore stability in the
region," Herbert said.