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Article fr India News paper (The Hi

Others must join fight: ASEAN
By V. Jayanth

KUALA LUMPUR; Dec. 15. The Southeast Asian (ASEAN) leaders today called
for grater "national,
regional and international efforts", including by the major economies
and international financial institution as possible and address systemic

issues underlying it". In a separate statement on the financial
situation in the region, the second informal summit of ASEAN leaders
noted that " despite the fundamentals of the regional economies being
corrected and improved through the support and advice of the IMF, the
depreciation of the currencies has continued unabated". This, they
said," resulted in serious regression in the economic wellbeing of the
countries, Their bussinesses and their peoples". Recognising the "
global dimension" of the problem, they called for increased efforts,
including by the EU, Japan and the U.S. along with the international
financial institutions. While endorsing the report of the ASEAN Finance
Ministers earlier this month, the leaders urged the IMF " to expedite
this study and propose solutions to immediately stabilise the

They stressed the need for "greater transparency of capital flows to
ensure greater efficiency in the functioning of economies and the
financial markets", even as they called for strengthening their ability
to " cope effectively with the challenges associated with
liberalisation". The Heads of  State / Government of the nine ASEAN
countries called upon the region's capital market authorities to draw
measures to encourage the financing of infrastructure projects in ASEAN
through the capital markets and joint efforts to promote the
attractiveness of the region. Addressing a press conference after the
summit, the Malaysian Prime Minister Dr. Mahathir Mohamad said an IMF
relief package could not obviously offset the losses sustained by any
country. It was meant only to "boost reserves and infuse confidence in
the markets and among investors. It cannot also finance loans drawn by
the private sector.

Dr. Mahathir made it clear that he could not speak on behalf of all
ASEAN leaders, but Malaysia was of the view that it was time to "
reconsider some of the strategies of the IMF". He argued that with an
increase in taxes and interest rates, even some of the good companies
would probably fold up. People would be hurt by high inflation and it
would be impossible to raise funds to repay loans. Dr. Mahathir said
that the ASEAN leaders had tasked their officials to look at ways and
means of increasing intra- ASEAN trade, keeping in mind the current
financial difficulties and depreciation all currencies. The directed
official to study the possibility all establishing appropriate ASEAN
payments arrangement that assist member countries to conserve foreign
exchanges and optimally utilise ASEAN capacities and resources within
the region.

The Prime Minister took pain to explain that this was not trade-
blockism or regionalism, but only a practical approach to cope with the
financial situation and depreciation of currencies. "We only want to
conserve foreign exchange and buy goods which are cheaper, within the
region", he added. It was not like the American NAFTA or the EU, but a
pragmatic approach to tap the regional resources and come up with an
ASEAN payments mechanism to avoid further depletion of foreign exchange

Asked if the leaders did not consider an earlier ASEAN standly fund
proposal, Dr. Mahathir again made it clear that Malaysia felt that any
other source of funding should not merely be an extension of the IMF.
But others may not share that perception. This question would be
discussed in ASEAN's discussions with Japan, China and Korea. Today's
summit decided to intensify consultations to enable Cambodia to joint
ASEAN as soon as possible, " preferably before the next ASEAN summit" in


16 Dec 1997