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Reuters-Southeast Asia On Road To R



Subject: Reuters-Southeast Asia On Road To Recovery, ASEAN Says 

Southeast Asia On Road To Recovery, ASEAN Says
12:28 a.m. Mar 20, 1999 Eastern
By Chris Johnson

HANOI (Reuters) - Southeast Asian finance ministers prepared to wrap up a
two-day meeting Saturday with a cautious forecast of recovery from the
economic crisis that has swept the region since 1997.

A final communique to be issued by finance ministers of the Association of
South East Asian Nations (ASEAN) would praise the monetary and financial
stability that has laid the groundwork for sustainable growth, officials
said.

Officials said the final communique would also highlight a new regional
economic surveillance mechanism designed to act as an early warning of
future financial turmoil.

An early draft of the statement, obtained by Reuters, said Southeast Asia
had moved on from its initial emergency steps to cope with the recession
which set in after the devaluation of the Thai baht in 1997.

ASEAN countries were now ``charting their own roads to recovery,'' it said.

But the statement also warned of risks threatening ASEAN recovery.

``These risks include a U.S. stock market correction which could precipitate
a sudden slowdown in the U.S. economy, rising protectionism in the developed
countries, economic weakness in Japan, possible contagion from other
emerging markets and a devaluation of the Chinese renminbi (yuan),'' it
said.

Ministers from ASEAN -- grouping Brunei, Indonesia, Laos, Malaysia, Myanmar,
the Philippines, Singapore, Thailand and Vietnam -- said the new mechanism,
the ASEAN Surveillance Process, would be a key plank in warding off more
financial misery.

Economists have welcomed the monitoring body but ASEAN has yet to finalize
details of the system.

ASEAN officials have yet to decide what type of macroeconomic and capital
flow data would be compiled under the one-year-old mechanism. At this stage,
member countries will also not be compelled to supply data.

Economists have said greater financial transparency is critical to entice
capital back into the region to help governments rebuild after the region's
deep recession.

The ASEAN meeting is also being attended by senior officials from the
International Monetary Fund, the World Bank and the Asian Development Bank,
who were due to make presentations to the finance ministers Saturday

morning.

Officials from the international agencies largely share ASEAN's cautious
optimism over the prospects for recovery but worry that better economic
signs in recent weeks might encourage some governments to slow down, or stop
crucial financial reforms.

World Bank vice president for the East Asia and the Pacific, Jean-Michel
Severino, said Friday that while there were signs of revival this was not a
time for complacency.

``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.