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."