|
Southeast Asian Finance Ministers Discuss Pact
KUALA LUMPUR, April 7 (News Agencies) - Southeast Asian finance ministers Saturday debated a planned regional pact to avert future currency crises, sidestepping disagreements on the role of the International Monetary Fund.
A vaguely worded statement, apparently designed to meet Malaysian-led objections to IMF surveillance, stressed that the currency swap plan would supplement the world fund's facilities.
The issue of IMF involvement has dogged implementation of the so-called Chiang Mai initiative to link the international reserves of the 10 ASEAN countries with those of economic heavyweights China, South Korea and Japan.
The issue has assumed greater urgency as the region's export-driven economies are hit by a global slowdown, and the falling yen drags down Southeast Asian currencies.
"There was consensus that the bilateral swap arrangements would be complementary and supplementary to IMF facilities," said a press release after the first day of the two-day ministerial meeting.
"To be beneficial to the individual ASEAN countries, the terms and modalities of the bilateral swap arrangements should take into account the differing economic fundamentals, specific circumstances and financing needs of individual countries."
Malaysia, which is deeply suspicious of IMF prescriptions, had led objections to a supervisory role for the fund in the expanded swap deals.
But the Northeast Asian nations have stressed they want IMF surveillance to ensure the money is used properly.
The Chiang Mai Initiative originally proposed that a borrower nation could draw 10% of an agreed credit line, with future disbursement tied to IMF supervision.
ASEAN ministers Saturday appeared to agree there should be no agreement, with borrowers and lenders negotiating with each other about whether the IMF should get involved.
Malaysia refused IMF aid during the 1997/98 financial crises and said its prescriptions for neighboring countries did more harm than good.
"We are not under the IMF, why should they impose IMF conditions on us?" Malaysian Finance Minister Daim Zainuddin said recently.
Daim, asked by reporters Saturday if ASEAN would take a common stance on IMF surveillance, said: "Each country has to negotiate in its own interest."
He added: "We [Malaysia] are not going to the IMF, anyway. We are not going."
A Malaysian finance ministry official told AFP: "Malaysia's stand is we feel we don't need the IMF. But we agree that each country will have to negotiate its own terms and details when the time comes."
ASEAN Secretary-General Rodolfo Severino told AFP terms of the swap arrangement would be discussed between the two countries involved.
"The moral hazard issue will have to be addressed in the terms and conditions to be agreed on by the two parties," he said.
On the ceiling of emergency drawdown under the scheme, Severino said several proposals were made but there was "no definitive conclusion" as this must be negotiated with Japan, China and South Korea.
He said ASEAN officials would "exchange ideas and arrive at some common understanding of this" in their talks with officials from the three countries on Sunday.
"There may not be any definitive conclusion because the 13 ministers may want to discuss this at their meeting next month," he added.
Ministers began their talks expressing satisfaction at a generally strong bounce-back from the 1997/98 meltdown - tinged with apprehension at the global slowdown.
"We meet today under much improved circumstances, with growth in our economies remaining robust and indicators suggesting improving consumer confidence and domestic demand," Daim said in an opening speech.
He added: "At the global level we are bracing ourselves for the slowing down of the world economy following the already moderating U.S. economy.
"What remains uncertain at this point is the magnitude, duration and severity of the slowdown."
|
