Surveillance plan can help ASEAN resist new crisis

Surveillance plan can help ASEAN resist new crisis

MANILA (AFP): There is no bullet-proof shield from future
financial crises, but a peer-based monitoring mechanism set up
this year could help Southeast Asia withstand any new turmoil,
experts said Thursday.

Suthad Setboonsarng, deputy secretary general of the
Association of Southeast Asian Nations (ASEAN), said the
financial surveillance process is now taking wing after its
formal establishment early this year.

The ASEAN surveillance coordinating unit is based at the
group's secretariat in Jakarta, with technical support from the
regional economic monitoring unit of the Manila-based Asian
Development Bank (ADB), he said.

These two bodies report to finance and monetary deputies and
to the "peer group" of ASEAN finance ministers who meet formally
and informally at least five times a year.

However, Suthad and other experts said in a seminar on the eve
of the ADB annual meeting here that watchdog mechanisms were not
infallible.

"I don't think anybody can say with any confidence that
anything we undertake right now can avert the next crisis," he
said.

But he stressed that the system can be useful as an early
warning device to pinpoint potential problems and nip them in the
bud.

"If you catch colds, you can't avoid that. But you better keep
yourself strong enough to prevent this from happening."

Suparut Kawatkul, director general for fiscal policy of
Thailand's finance ministry, said crises are always ready to
strike anytime.

"But we can immune ourselves from facing the crisis. If all
the countries do the same, that means immunity will be spread...
and that will be the medicine to prevent the crisis."

Suthad said the different level of economic development among
ASEAN's nine members was expected to slow down the monitoring
process.

There have also been concern about how much disclosure each
member can stomach.

ASEAN group's Brunei, Indonesia, Laos, Malaysia, Myanmar, the
Philippines, Singapore, Thailand and Vietnam. Cambodia is to be
admitted as the group's tenth member Friday.

Suthad, whose office supervises the surveillance process, said
ASEAN members whose economies are in transition from socialism to
the free market would have to be integrated into the process
gradually.

"They come into this capital market with a very, very skimpy
foundation," he told AFP.

While monitoring would include general macro-economic data,
Suthad said that the peer-group could not monitor capital flows
and stock market developments in Laos and Myanmar, for example,
because these are virtually non-existent.

"Everybody will be doing whatever they can. There are many
phases, others will come in later," he said.

Suthad said ASEAN would "have no choice" but to be transparent
on economic data despite its long-standing policy of non-
interference in domestic affairs.

"Once anybody does not adhere to the rule, somebody would talk
to him (and say) why are you doing that," he said.

ASEAN, however, has been more open to criticism on the economy
than on domestic politics, he said.

Former Philippine finance secretary Roberto de Ocampo said
that the monitoring system should not just be a "depository of
statistics for researchers ... or a police network with no
teeth."

It should be a "system by which the market should be able to
obtain the data better and interact much better with the
countries participating in it," he said.

De Ocampo also said that data gathered through monitoring
should "provide the impetus for continuing reforms ... so that if
there is a crisis in the future, at least we will have a better
chance of identifying what the crisis is and putting to bear the
right policy answers to it."