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Articles from India News paper

Another bid to resolve market crisis
By. V. Jayanth

Kulala Lumpur, Nov. 30: What was earlier billed to be a make or break
meeting of Asean finance Ministers, with some of those of the
industrialised countries and IMF to finalize a global response to the
Asian market crisis, may turn out to be yet another of those
international get together. The Asean-Plus-Six Finance Ministers meet
here for two days from Monday to thrash out what has come to be called
the "Manila framework" for a joint action plan to deal with the currency
and stock market turmoil that has crippled many of the East Asean

When this whole exercise began some three or fourth months ago. Malaysia
asked for two major initiatives the first was to set up a regional fund
or stand by facility to assist countries affected by the  speculative
attacks; and two, it called for a regulation of currency trading, on
line similar  to the stock market.

The IMF and the West are very sceptical about plans to set up an Asian
regional fund or stand by facility because they are afraid it will
compete with the IMF and seek to help economies without having to
undergo the rigours and conditionalities of seeking a bail out from the
Fund. So a lot of water was thrown on this proposal at every stage and
the IMF's Managing Director, Mr. Michael Camdessus, made it clear that
what East Asia needed first was a " surveillance mechanism" and not a
fund. He argued that there was no problem for the Fund to put together a
financial package for any economy affected by the crisis and cited the
ease with which a $17.2 billion package was first hammered out for
Thailand and another $23 billion for Indonesia, which also obtained an
additional stand by facility of about $17 billions.

And now, the IMF is half-way through intensive negotiations with South
Korea for yet another package, which may climb to $30 to $50 billions by
the time it is wrapped up within a fortnight. Without losing heart,
Malaysia and Indonesia doggedly pursued their goal and stepped up their
campaign for a regional fund. This resulted in two developments an IMF
study on what happened and caused the currency crisis in Southeast Asia,
and a meeting of Deputy Finance Ministers of the Asia Pacific region in
Manila in mid-November. The preliminary findings of the IMF study are to
be tabled for discussion at tomorrow's meeting here, while the " Manila
frame-work" went up to the leaders' summit of APEC in Vancouver last
week. Despite the numerous hours spent on both the fund and the
regulation of currency trading, it is Malaysia's concern that " nothing
tangible has come out of it," and the end of the day. So the talks will
continue tomorrow.

When the debate began within weeks of the July crisis, Japan appeared to
be taking the initiative to set up this regional fund and a figure of
$100 billions was set to create that facility. But subsequently, under
pressure from both the IMF and the U.S., Japan has almost pulled out of
this project. All that remains is that the IMF and some industrialised
countries can make a commitment for such a stand by facility, but this
will be purely to supplement an IMF package and be subject to the same
cionditionalities. Malaysia suspects it may be a still born child.

The Hindu Newspaper

Myammar to find place in regional grouping
By V. Jayanth

SINGAPORE, NOV. 26: The Bangladesh-India-Sri Lanka-Thailand Economic
Cooperation (BIST-EC), which was launched in June this year, is likely
to hold its second Ministerial meeting in December in Bangkok. Myanmer
will be formally admitted in the grouping, making it the second country
from ASEAN to join the forum. The Democrats-led coalition Government in
Thailand, which claims to be the brain behind the country's "Look West"
policy, is determined to push ahead the sub-regional cooperation
vehicle. According to senior officials in the Thai Foreign Ministry, a
preliminary study by the Economic and Social Commission for the Asia and
the Pacific (ESCAP) on priority projects of a sub-regional nature
circulated among the governments.

A concept paper on the need for regional airline has also been
distributed to member- States, following a suggestion at the inaugural
meeting that such an airline can cater to the tourist and business needs
of the sub-region. "We know there are bottlenecks in the field of civil
aviation. The Foreign Ministers have agreed to elicit a response from
the Civil Aviation ministries or their national carriers before the
December meeting. Senior officials are expected to prepare the ground
for Deputy Foreign Ministers' meet," the officials explained.

In preliminary studies conducted in collaboration with ESCAP and the
Asian Development Bank, a number of projects have been identified.
Textiles, clothing, drugs and pharmaceuticals, gems and jewelry,
horticultural and floricultural products and tourism are seen as some of
the key sectors where sub-regional trade and cooperation can be
substantially enhanced.

The study has selected investment and industry, small and medium
enterprises, energy, fisheries, transport, and communications and human
resource development as areas in which joint ventures can be considered.
It is significant that BIMST-EC has economies in different stages of
development. There are also common linkshistorical and cultural ties
and a desire to came closer.

Thailand till last year had a booming economy.  But the recent economic
crisis and market crash have created major problems for the country. The
Thai Government, however, appears convinced that the best way is to step
up its sub-regional and regional cooperation programs to stimulate the
external wing of its economy. As of 1996, the GDP per capita for
Thailand was $ 2810 compared to $720 for Sri Lanka, $235 for India, $
240 for Bangladesh and $ 235 for Myanmar.

Asked about the viability of a regional airline, sources said it was
imperative to provide air connections to tourist and business circuits
in the sub-region. "What we are thinking of is the Buddhist circuit
linking Sri Lanka, India, Myanmar and Thailand, in addition to providing
air services for business and trade circles to States in eastern India,
Mandalay, Bangladesh and southern Thailand. None of the national
carriers will be interested in these routes," the sources explained.

They noted that member-States and their governments will be allowed to
let their national carriers  participate in the airline venture or leave
it to the private sector, which has already come into being in India and
Thailand, for instance.

India's Ambassador to Thailand, Mr. Ranjit Gupta, said the BIMST-EC
meeting scheduled for the third week of December, was expected to (1)
consider the ESCAP study (2) priorities the projects that can be taken
up among two or more member-countries and (3) welcome Myanmar into the
fold. He said ESCAP had also agreed to conduct a seminar in early 1998
to invite the private sector, multilateral agencies and potential  donor
countries to consider some of the projects that would be on offer in the
sub-region. That would mark the beginning of the phase of
operationalisation, he said.

The Hindu Newspaper