Reuters-Southeast Asia Sees Recover

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Subject: Reuters-Southeast Asia Sees Recovery But Risks Ahead 

Southeast Asia Sees Recovery But Risks Ahead
03:37 a.m. Mar 19, 1999 Eastern
By Chris Johnson
HANOI (Reuters) - Southeast Asian finance ministers said Friday the region
was emerging from economic crisis after almost two years of slump, but
warned that a number of hazards could still derail the recovery.
Opening a two-day meeting of finance ministers of the Association of South
East Asian Nations (ASEAN), Vietnam Prime Minister Phan Van Khai suggested
the worst of the Asian crisis might soon be over.
``Positive signs of recovery have emerged with inflation contained, exchange
rates and financial markets increasingly stabilized, balance of payments
improved, export and foreign reserves increased and difficulties in people's
livelihood alleviated,'' he said.
But Khai cautioned that many difficulties still lay ahead.
``There are uncertainties in the future and risk that the situation might
change,'' he said.
Officials from Japan, China, South Korea, the International Monetary Fund,
World Bank and Asian Development Bank, who were also attending the meeting,
echoed this view.
World Bank vice president for the East Asia and the Pacific, Jean-Michel
Severino, told Reuters there were signs of revival but this was not a time
for complacency. He said any let-up in the pace of financial reform could
derail the recovery.
``Our message to ASEAN would be that it is not the time to relax the effort
on reform, on corporate and financial restructuring, on governance,'' he
said in an interview.
Indonesian Finance Minister Bambang Subianto said ASEAN -- grouping Brunei,
Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and
Vietnam -- could overcome its woes if it demonstrated stronger solidarity
and commitment.
He said a new regional monetary surveillance mechanism, the ASEAN
Surveillance Process, would be a key plank in warding off another bout of
financial misery.
``Strengthening finance cooperation is undoubtedly important in encouraging
and facilitating greater movement of capital and other financial resources
within our region to enhance intra-regional trade and investment,'' Subianto
said.
Economists have given a cautious welcome to a new ASEAN monitoring body
which aims to give an early warning of future financial difficulties.

However, ASEAN officials have yet to decide what type of macroeconomic and
capital flow data would be compiled under the one-year-old mechanism.
Economists have said greater financial transparency was critical to entice
capital back into the once high-flying grouping.
ASEAN officials rejected criticism of their collective response to the
crisis, which snowballed after the devaluation of the Thai baht in July
1997.
``On the contrary, the way ASEAN has responded to the crisis has been
appropriate and timely, although it is different from one country to
another,'' said Miranda Goeltom, managing director of Indonesia's central
bank.
``We have also agreed that each country has its own specific conditions and
that an across-the-board way of solving the problems is not available,'' she
told Reuters Television.
Other topics for discussion by finance ministers will likely include social
safety nets and the implementation of measures agreed at an ASEAN summit
last December in Hanoi.