Thailand aims for SE Asian market alignment

Thailand aims for SE Asian market alignment

MANILA (Reuters): Southeast Asian economies want to align their financial markets closely, laying the basis for possible merger in future, Thai Finance Minister Tarrin Nimmanahaeminda said on Thursday.

Tarrin told reporters after a meeting of finance ministers of the Association of South East Asian Nations (ASEAN) that the aim was to get the region's financial markets on the same legal basis with similar standards and accounting principles.

"The joint development means each country would come up with a similar legal framework on those markets which will perhaps be one market in the future," Tarrin said.

But he dismissed suggestions that ASEAN cooperation on financial markets would necessarily mean the creation of a common Asian currency.

Asked whether the plans would involve the adoption of a single currency, he said: "No, no. Nothing like that."

Philippine Foreign Secretary Domingo Siazon told Reuters earlier leaders in Southeast Asia were working toward an East Asian common market which would include Japan, China as well as both Koreas and eventually a regional currency.

ASEAN is just emerging from more than two years of severe financial crisis that was triggered when Thailand allowed its baht currency to devalue in July 1997.

ASEAN finance ministers agreed on Thursday on details of a special monitoring unit, the ASEAN Surveillance Process, to scrutinize their economies and financial markets and ensure that developing problems did not get out of hand.

Under the system, countries will report regularly to a regional and intra-ASEAN surveillance body on economic trends.

"Each country is required to disclose their key macroeconomic indicators, share their immediate economic experience, what needs to be done immediately and what are the long-term or structural issues that need to be solved," Tarrin said.

"This agreement will oblige all ASEAN finance ministers to meet twice a year," he added.

"The second issue is on cooperation to develop jointly various markets for the entire region's financial system, which covers 11 topics, such as the capital markets, debt markets, life and non- life insurance markets," Tarrin said.

"There are quite a number (of topics) that we have laid down as areas to cooperate among member states," he said, citing as an example the adoption of international best practices and standards.

"Basically to get the standards and the accounting principles and the principle of disclosure, on the same terms."

Tarrin said the cooperation on the developments of markets would initially be "within ASEAN" but indicated that cooperation could include other countries in future.

Discussion on the coordination of market developments has recently taken place under the auspices of the Asia Pacific Economic Cooperation (APEC) forum.

There has also been talk of greater cooperation between ASEAN and Japan, China and South Korea that will attend a joint meeting with ASEAN leaders after the summit on November 28 in Manila.