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ASEAN officials discuss regional support plan

BANDAR SERI BEGAWAN: Senior finance officials of Southeast Asian nations gathered in Brunei on Friday to discuss a vexed proposal to set up a regional fund to rescue their economies if another financial crisis erupted.

"They discussed the work program on the monitoring of short-term capital and the development of a self-help and regional support mechanism," an official statement said.

The officials meeting ahead of a weekend conference of ASEAN finance ministers prepared the third informal ASEAN Survelliance report on better exchange of sensitive macroeconomic data.

The ten-nation Association of South East Asian Nations (ASEAN) groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

"The peer review is part of an information exchange on economic data and reforms and restructuring of various sectors being carried out by various countries," said a Malaysian central bank official.

Officials said a better flow of information will help set up an early-warning mechanism to spot structural weaknesses and nip them in the bud.

"We have to learn from the Asian crisis and ensure better flow of information," Pengiran Maidin Bin Pengiran Haji Hashim, permanent secretary at Brunei's ministry of finance, told reporters.

ASIAN MONETARY FUND

Senior finance and central bank officials said the finance ministers could re-open a thorny, two-year-old debate on creating an Asian Monetary Fund (AMF) to help ailing economies.

Malaysian Prime Minister Mahathir Mohamad has been a strong proponent of the idea.

But the proposal has been staunchly resisted by Western nations led by the United States, which has insisted that the International Monetary Fund (IMF) play the central role in rescuing distressed economies and that funds be used in line with stringent IMF conditions.

The US fears that a separate Asian financial facility could undermine the IMF and weaken the willingness of Asian countries' to adopt tough reforms advocated by the IMF.

Kunio Saito, director at the IMF's regional office for the Asia and the Pacific, said on Thursday that whatever the details of the AMF, it should be consistent with the activities of the IMF.

There were divisions, too, among ASEAN finance officials.

"We will leave it to the ministers to take up the issue," said a central bank official. "Many feel that we should wait for Japan to bring up the issue," he said.

But Japan seems reluctant to take the lead, fearing a direct confrontation with the US and the IMF. It wants ASEAN nations to first come forth with their proposals.

There have been suggestions of making the $30 billion Miyazawa plan, set up to help Asian countries through the region's economic crisis, a permanent facility.

Asked whether the officials discussed the AMF, Pengiran Maidin said: "We are talking within a general framework on human resources development, training of banking officials, technical assistance".

STEPS UP COOPERATION

The ASEAN economies are also close to finalising a deal on a regional automobile insurance scheme, officials said. They did not give any details.

"We have held extensive discussions on insurance cooperation and customs regulation," Noor Fuad, secretary general at Indonesia's ministry of finance, told reporters.

Representatives from International Monetary Fund (IMF), Asian Development Bank (ADB) and European Commission made presentations on their outlook for the Southeast Asian nations.

The EC briefed the meeting on the development of the euro currency.

The ASEAN finance and central bank officials will be joined by delegates from China, Japan and South Korea later on Friday.-Reuters