U.S. unconvinced by 'Asia fund' concept

U.S. unconvinced by 'Asia fund' concept

CANBERRA (Reuters): The United States is not convinced of the need for an "Asia fund" from which countries in the region could draw in times of financial crisis, U.S. Deputy Secretary of State Strobe Talbott said yesterday.

Briefing reporters in Australia at the start of an Asia- Pacific tour, Talbott said Washington believed the International Monetary Fund was the proper body to tackle crises such as the recent market turmoil in Asia.

But he said he did not wish to be seen to be ruling anything in or out.

"We think that the appropriate institution to address a problem like this is a trans-regional and international one rather than a newly-created regional one because the problem itself has ramifications that reach well beyond the borders of this region," Talbott said.

Philippines Financial Secretary Roberto de Ocampo said on Tuesday he would be inviting 11 countries, plus multilateral organizations such as the IMF, to talks in Manila on the creation of an Asia fund.

De Ocampo said meetings were planned for between November 18 and 21 ahead of an Asia-Pacific Economic Cooperation (APEC) forum summit at the end of the month.

The Philippines, one of the Southeast Asian countries engulfed by the financial tumult, has taken the lead in promoting the idea of an Asia fund.

But the idea has met with skepticism from the IMF and Western countries amid concerns it could be used as a method of avoiding the strict conditions normally imposed by the IMF in its rescue packages.

Talbott is leading a high-level inter-agency delegation on a tour of seven Asia-Pacific countries.

The team started its tour in New Zealand earlier this week -- in time to see the ousting of prime minister Jim Bolger -- and arrived in Canberra on Tuesday.

The delegation was to move on to Jakarta later on Wednesday before visits to Laos, China, Japan and South Korea.