Southeast Asia cries for help

Tue, 16 Dec 1997 | Source: REUTERS

KUALA LUMPUR (Agencies): Southeast Asian leaders called on the United States, Europe and Japan yesterday to join an urgent international campaign to end the region's financial crisis, but they stopped short of saying what type of aid was needed.

Leaders of the nine-member Association of Southeast Asian Nations (ASEAN) said an emergency global drive was needed to restore stability to currency markets, Reuters reported.

The leaders endorsed agreements reached by their finance ministers here two weeks ago. But they said regional currencies had continued to fall since that meeting, causing more damage to their economies and requiring new efforts.

ASEAN leaders said the crisis has global implications.

"It is therefore urgent that global efforts be undertaken, including the central role of the IMF (International Monetary Fund), to arrest the currency slide and restore stability to the currency markets," the statement said.

The leaders called for "greater national, regional and international efforts, including by the major economies such as the European Union, Japan and the United States, and international financial institutions, to overcome this situation as soon as possible".

Delegates to the three-day summit said that it was the first time ASEAN had explicitly called on outside nations to participate in a solution to the crisis.

"An extra effort has to be made," senior Philippine official Rodolfo Severino, due to become ASEAN secretary-general in January, told reporters.

The United States, Europe and Japan have participated at various levels in rescue plans for Thailand, Indonesia and South Korea totaling more than $100 billion. But they have insisted that the IMF lead the bailout packages.

The statement underscored "grave concern" shared by ASEAN member states -- Brunei, Myanmar, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam -- over the crisis.

The issue was expected to dominate talks later on Monday involving the ASEAN leaders and their counterparts from China, Japan and South Korea.

"They (ASEAN leaders) noted that despite the economic fundamentals of the regional economies being corrected and improved through the support and advice of the IMF, the depreciation of the currencies has continued unabated.

"This has resulted in serious regression in the economic well- being of the countries, their businesses and their peoples."

The ASEAN leaders endorsed the early implementation of an agreement reached in Manila last month calling for steps to strengthen the IMF and cooperative financing arrangements to supplement IMF resources.

The ASEAN leaders ordered officials to study the possibility of establishing appropriate regional payments arrangements that could assist member countries to conserve foreign exchange.

They said the creation of a regional free trade area, set to take effect in 2003, should be accelerated.

They also agreed that consultations should be intensified to enable Cambodia to join the 30-year-old group.

Cambodia was due to join in July, but a coup ousting First Prime Minister Prince Norodom Ranariddh forced a delay.

Conspicuously absent from the informal summit to mark ASEAN's 30th anniversary was Indonesia's President Soeharto, who is resting in Jakarta on the advise of his doctors. Foreign Minister Ali Alatas represented Soeharto at the summit.

The other ASEAN members were represented by their leaders: Brunei Sultan Hassanal Bolkiah, Myanmar prime minister Senior General Than Shwe, Laotian Prime Minister Khamtay Siphandone, Malaysia's Mahathir, Philippine's President Fidel Ramos, Singapore's Prime Minister Goh Chok Tong, Thailand's Prime Minister Chuan Leekpai and Vietnamese Prime Minister Phan Van Khai. They were joined by President Jiang Zemin of China, Japanese Prime Minister Ryutaro Hashimoto and South Korean Prime Minister Koh Kun, who are attending as guests.

A Chinese official said Beijing was considering providing aid to Indonesia to help it over the financial crisis, in addition to the assistance it had already extended to Thailand.

Foreign Ministry spokesman Shen Guofang said China would provide assistance through a financial program launched by the International Monetary Fund.

Hashimoto told Mahathir in a separate meeting that any aid for the crisis must be within conditions set by the IMF, Japanese officials said.

"Reality is that aid is not possible without the conditionality set forth by the IMF," Hashimoto was quoted by the officials as telling Malaysian Prime Minister Mahathir Mohamad.