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Asian Nations Consider Bailout Fund

Asian Nations Consider Bailout Fund 
By Ranjan Roy 
Associated Press Writer 
Sunday, November 30, 1997; 10:21 p.m. EST 

KUALA LUMPUR, Malaysia (AP) -- Seeking an alternative to the strict 
financial medicine prescribed by the IMF, finance officials from 
Southeast Asian nations began mulling over Monday a plan to set up a 
regional bailout fund. 

The plan is strongly opposed by the United States, which wants any 
financial bailouts to occur under the auspices of the International 
Monetary Fund. The IMF already is putting together multibillion-dollar 
rescue packages for Thailand, Indonesia and South Korea. 

U.S. officials have expressed concern that an independent Asian fund 
would not carry the stringent austerity conditions that the IMF imposes 
-- conditions they claim are critical for a troubled economy's long-term 
recovery. However, Asian officials have dismissed those fears. 

IMF head Michel Camdessus, arriving for the two-day summit early Monday, 
refused to comment on reports that the idea of an independent bailout 
fund had been revived. 

Thai Finance Minister Tarrin Nimmanahaeminda said his Indonesian 
counterpart, Mar'ie Muhamad, sent a letter to Asian finance ministers 
outlining a special fund by the nine-member Association of Southeast 
Asian Nations to help with any future problems. 

``The idea has been evolving very rapidly for a totally independent 
ASEAN fund subscribed by Asian countries,'' Tarrin told The Associated 

Mar'ie's letter said if a country drew on the account the requirements 
should be as least as tough as those imposed by the IMF, he said, adding 
``I also agree to that.'' 

Malaysian Deputy Prime Minister Anwar Ibrahim said the standby fund -- 
speculated to be as big as $20 billion -- will not be under the IMF but 
would work in close cooperation with it. 

``It has been discussed with the managing director of the IMF and he 
seems to be supportive,'' Anwar said. 

Attending the summit here Monday and Tuesday are ASEAN finance ministers 
and representatives of the United States, Japan, South Korea, Australia, 
China and Hong Kong. 

Devaluation of the Thai baht in July caused a chain reaction that hit 
other currencies and led to market turmoil worldwide. 

High on the IMF's agenda is designing an IMF-monitored forum where 
central bank governors would meet regularly to spot potential financial 
problems like high-risk loans and rising company debts. 

ASEAN includes Indonesia, the Philippines, Singapore, Thailand, 
Malaysia, Burma, Brunei, Laos and Vietnam.