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ABC News, Reuters, 25 March 2000 ASEAN to unveil standby financial arrangement BANDAR SERI BEGAWAN, March 26 (Reuters) - Southeast Asian finance ministers are expected to unveil a diluted standby regional financing arrangement on Sunday to bail out economies in the event of another financial crisis. The ministers, meeting in the oil-rich sultanate of Brunei, toned down a controversial proposal for an Asian Monetary Fund (AMF) and instead focussed on creating an arrangement which would include expanding an existing currency swap agreement. "It will not be an AMF. But it will be more like an standby arrangement to help ailing economies," a senior Brunei finance ministry official told Reuters. "Setting up of an AMF means an institutional structure. That proposal has not gone down well with the International Monetary Fund and other major powers," he said. Thailand Finance Minister Tarrin Nimmanahaeminda said on Saturday the ASEAN finance ministers agreed on expanding the existing currency swap arrangement among their central banks and bringing in Japan, China and South Korea to enlarge the kitty. ASEAN central banks in January renewed an agreement on currency swaps which provides short-term liquidity financing to ease temporary balance of payments needs. ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. Some countries have suggested making the $30 billion Miyazawa plan, set up to help Asian economies through the region's economic crisis, a permanent facility. But officials said the Miyazawa plan was a temporary arrangement and any proposal to make it permanent should come from Japan. AMF FAILS TO TAKE-OFF The proposal for a permanent regional fund was dropped to avoid a confrontation with the United States, which fears that a separate Asian fund could undermine IMF and weaken countries's resolve to embrace tough reforms advocated by the IMF. The IMF extended large fiscal and monetary bail-out packages to Thailand, Indonesia and South Korea in the wake of the Asian economic crisis. But many ASEAN nations led Malaysia, a strong proponent of the regional financial facility, has staunchly opposed painful economic reforms advoacted by the IMF as part of the rescue packages. Officials said economic powerhouses Japan, China and South Korea also withheld explicit backing to the AMF idea. But the ministers are expected to recommend setting up a panel of senior finance officials to study the feasibility of a regional fund. "We expect them to discuss at their next meeting in Chang Mai," the Brunei official said, referring to the Thai resort town. BOOST FINANCIAL COOPERATION Officials said the proposed regional financial facility would also include measures to train banking and financial personnel in the region, extend technical cooperation and strengthen peer survelliance. As part of the peer survelliance, ASEAN nations will submit sensitive macroeconomic data to the ASEAN secretariat, which will monitor the data along with the Asian Development Bank. "Timely exchange of information will help us to monitor short-term capital fows and limit the contagion effect," said a Malaysian central bank official. Ministers also pledged to step up cooperation in insurance, capital markets and speedy reduction of import tariffs. ABC News, Reuter, 25 March 2000 ASEAN to Unveil Standby Financial Deal BANDAR SERI BEGAWAN (Reuters) - Southeast Asian finance ministers are expected to unveil a diluted standby regional financing arrangement on Sunday to bail out economies in the event of another financial crisis. The ministers, meeting in the oil-rich sultanate of Brunei, toned down a controversial proposal for an Asian Monetary Fund (AMF) and instead focused on creating an arrangement which would include expanding an existing currency swap agreement. "It will not be an AMF. But it will be more like an standby arrangement to help ailing economies," a senior Brunei finance ministry official told Reuters. "Setting up of an AMF means an institutional structure. That proposal has not gone down well with the International Monetary Fund and other major powers," he said. Thailand Finance Minister Tarrin Nimmanahaeminda said on Saturday the ASEAN finance ministers agreed on expanding the existing currency swap arrangement among their central banks and bringing in Japan, China and South Korea to enlarge the kitty. ASEAN central banks in January renewed an agreement on currency swaps which provides short-term liquidity financing to ease temporary balance of payments needs. ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. Some countries have suggested making the $30 billion Miyazawa plan, set up to help Asian economies through the region's economic crisis, a permanent facility. But officials said the Miyazawa plan was a temporary arrangement and any proposal to make it permanent should come from Japan. AMF FAILS TO TAKE-OFF The proposal for a permanent regional fund was dropped to avoid a confrontation with the United States, which fears that a separate Asian fund could undermine IMF and weaken countries' resolve to embrace tough reforms advocated by the IMF. The IMF extended large fiscal and monetary bail-out packages to Thailand, Indonesia and South Korea in the wake of the Asian economic crisis. But many ASEAN nations led Malaysia, a strong proponent of the regional financial facility, has staunchly opposed painful economic reforms advocated by the IMF as part of the rescue packages. Officials said economic powerhouses Japan, China and South Korea also withheld explicit backing to the AMF idea. But the ministers are expected to recommend setting up a panel of senior finance officials to study the feasibility of a regional fund. "We expect them to discuss at their next meeting in Chang Mai," the Brunei official said, referring to the Thai resort town. BOOST FINANCIAL COOPERATION Officials said the proposed regional financial facility would also include measures to train banking and financial personnel in the region, extend technical cooperation and strengthen peer surveillance. As part of the peer surveillance, ASEAN nations will submit sensitive macroeconomic data to the ASEAN secretariat, which will monitor the data along with the Asian Development Bank. "Timely exchange of information will help us to monitor short-term capital flows and limit the contagion effect," said a Malaysian central bank official. Ministers also pledged to step up cooperation in insurance, capital markets and speedy reduction of import tariffs. ABC News, Reuters, 26 March 2000 ASEAN shelves fund plan, to expand currency swaps BANDAR SERI BEGAWAN, March 26 (Reuters) - Southeast Asian finance ministers on Sunday shelved a plan to create a regional crisis fund and agreed instead to expand an existing currency swap deal to support economies facing balance of payments woes. "A proposal was made that the existing arrangements within the swap agreement to meet short-term balance of payments problems might be expanded," Singapore Finance Minister Richard Hu told a news conference. "This will be one of the ways in which short-term balance of payments facility could be arranged," he said. Finance officials from members of the Association of Southeast Asian Nations (ASEAN), meeting for two days in this oil-rich sultanate, had said earlier the regional grouping was expected to unveil a watered-down version of a proposed regional financing fund. The fund had been proposed as a way to prevent a recurrence of the financial crisis which hit Asia beginning in 1997, causing wrenching economic and social change in many countries of the region. But ASEAN finance ministers agreed instead to expand the existing currency swap arrangement, totalling a meagre $200 million, among their central banks and to include Japan, China and South Korea to enlarge the kitty. Hu said the response of the three East Asian nations to an expanded currency swap arrangement was positive. But he added that details were still to be worked out. ASEAN's international reserves, combined with those of economic powerhouses China, Korea and Japan, could be used to bail out economies facing balance of payments crises. A joint ministerial statement released at the end of the two-day meeting said: "Recognising the need for the availability of financial resources in times of crisis, they agreed to conduct a study on the modalities and mechanisms for a regional financing arrangement to supplement the existing international facilities." ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. IMF LUKEWARM TO AMF Officials said the International Monetary Fund (IMF), which made presentations at the weekend meeting, was lukewarm to the proposal of a separate Asian fund. ASEAN secretary general Rodolfo Certeza Severino told reporters there were divisions within the regional grouping itself on the issue. But Singapore's Hu did not rule out the ASEAN finance ministers re-opening the two-year-old debate over the proposed Asian Monetary Fund at their next meeting in Thailand's resort town of Chiang Mai. Officials said Japan has to provide the initiative for the controversial AMF, which has been opposed by the United States and other Western nations. The U.S. fears a separate Asian financial facility could undermine the IMF and weaken Asian countries' willingness to embrace tough reforms advocated by the IMF. The IMF extended large fiscal and monetary bail-out packages to Thailand, Indonesia and South Korea in the wake of the Asian economic crisis. But Malaysia, a strong proponent of the regional financial facility, has staunchly opposed the painful economic reforms advocated by the IMF as part of the rescue packages. MECHANISM TO MONITOR CAPITAL FLOWS The joint statement said the ministers agreed to set up a regional monitoring mechanism, as part of an early-warning system, to keep a close eye on capital flows in ASEAN. "A study will also be conducted to look at measures that can mitigate the adverse impact of a sudden shift in capital flows," it said. The study will be finished by end-April. The ministers pledged to sustain the fledgling economic recovery and achieve the projected regional growth rate of 4.5-5.0 percent in 2000. They reassured to carry out structural reforms, privatisation of state-owned firms, spur domestic demand, improve corporate governance, transparency and establish a regional framework for development of an ASEAN bond market. "Our aim is to develop and deepen ASEAN's capital markets, particularly bond markets. This would provide a better variety of financing instruments and facilitate better risk management," the joint statement said. AFP, 26 March 2000 Sri Lanka's Tiger rebels set up base in Thailand: report COLOMBO, March 26 (AFP) - Sri Lanka's Tamil Tiger rebels have set up a shipping base in Thailand for arms and drug smuggling operations after being forced out of Myanmar, the Lloyd's List was report here as saying Sunday. The English language Sunday Island newspaper quoted a Lloyd's List report that the separatist Liberation Tigers of Tamil Eelam (LTTE) were operating a base at a Thai island near the tourist resort of Phuket. "Through existing ties with the military regime in Myanmar, a permanent Tiger naval base was established on the Myanmar island of Twante," the Lloyd's List said. "That had to be vacated in January 1996, following diplomatic pressure on Rangoon from Colombo." The Lloyd's List had also reported earlier this month that the LTTE was operating some 11 vessels that were deployed for gun running in addition to legitimate commercial freight operations. The LTTE had the vessels registered in Panama, Honduras and Liberia. The rebel group's biggest known arms consignment had been handled in August 1994 when they loaded 50 tonnes of TNT and 10 tonnes of RDX, or plastic explosives, at the Ukrainian Black Sea port of Nikolayev, the Lloyds List said. It said the consignment had been arranged by a Dhaka-based company set by the LTTE's procurement chief, Kumaran Pathmanadan, better known as KP. "An end user certificate (for the explosives) was ostensibly signed by Bangladesh's defence secretary, stating that the cargo was destined for Bengali forces," the Lloyd's List report said. The explosives were used in the bombing of the Central Bank building in the Sri Lankan capital Colombo, leaving 91 people killed and 1,400 wounded, the report said. The shipping news publication said shipping was just a small part of a bigger picture that included stock and money market investments, real estate, restaurants, farms, shops and finance companies set up by the LTTE. "Because the vessels are legally owned and managed, classed and flagged, Lloyd's List has been able to piece many of the details together," the report said. It said rebel ships were also known to have carried heroin consignments that ended up in the developed world. The guerrillas have in the past acknowledged they operate vessels and accused the navy in neighbouring India of playing an "important role" in the sinking of their cargo vessel, the M. V. Horizon, in February 1996. In November 1997, the Sri Lankan airforce bombed and destroyed a suspected rebel vessel unloading military hardware in the island's north-eastern coast. The Indian navy intercepted and sank another LTTE vessel in January 1993. The LTTE is leading a drawn out campaign for independence in the island's northern and eastern regions. More than 55,000 people have been killed in fighting in the past two decades. Africa News, 25 March 2000 Dipak Patel Donates To Burma School The Times of Zambia (Lusaka) March 25, 2000 by Times Reporter Lusaka - Lusaka Central independent member of Parliament Dipak Patel has appealed to school authorities to observe maximum care on school property if the are to improve school standards. Speaking during the hand-over ceremony of a bore-hole and two ablution blocks at Burma Road Basic school in Lusaka yesterday, Mr. Patel said a larger amount of the constituency development funds (CDF) had been spent on education in his constituency for the past two years. He said he saw deplorable conditions in some schools and made it a priority area. Mr. Patel, donated K1 million towards the maintenance of the facilities and the general uplifting of the school standards. "This money I am donating has to be used for the benefit of the school, so as to maintain the education standards in the nation," he said. And Lusaka City Council (LCC) deputy mayor Patrick Kangwa said the council had found it easy to work with Mr. Patel as he had even sacrificed to work beyond his duties in the maintenance of the sewerage system in Sikanze camp, the job which was supposed to be done by the council. Mr. Kangwa said he was so happy to see that most of the schools in Lusaka central were utilising the funds from the constituency as the Government could only be encouraged through such gestures of transparency. He said the pride if the teachers' conditions would also be uplifted at the school by the end of this year as he was going to donate furniture for their staff room which they claimed had no chairs. School headmaster Robby Kangwa said K17 million was spent on the project and promised that the school would take care of the facilities as very few schools had been accorded such opportunities despite the availability of funds from CDF. And the African diplomatic and international women group yesterday donated K2 million to the Mozambican government for the flood victims. Chairperson, Mary Mwencha, flanked by other members of the group officially presented the donation to Mozambican high commissioner to Zambia, Cristofa Inoque Jamo in Lusaka on Thursday. Dr Jamo thanked the women for making the donation during difficult economic times. The Nation, 26 March 2000 WHAT OTHERS SAY: Choosing not to spend your money on Burma WASHINGTON - Money is a powerful weapon in political battles, and one way to wield it is to choose not to spend. In that spirit, four states and about 30 US municipalities have legislated some form of boycott of Burma, the repressive nation called Myanmar by the military junta that has ruled it since 1988. Burmese government troops killed thousands of protesters that year and jailed countless others; since then the junta has used torture, forced labour, detention and abduction to maintain its rule. International outrage at the human-rights abuses has driven away many foreign investors. The process was accelerated by actions like that of Massachusetts, which requires any companies operating in Burma to bid for state business at a 10-per-cent disadvantage, effectively eliminating them from competition. In 1996 and 1997 Congress and the Clinton administration instituted their own sanctions, prohibiting any new investment in Burma by US companies. Levi Strauss, Eastman Kodak and Hewlett-Packard are among the many US businesses that have pulled out of Burma; the largest of the handful that remain is California-based Unocal, which is a major partner in a 416-mile natural-gas pipeline leading out of Burma's Yadana gas field. The lawsuit being argued was filed by the National Foreign Trade Council, a business coalition that opposes all unilateral sanctions. Relatively few of its members actually have much to do with Burma; as the US Commerce Department has noted, "While trade with Burma" - as opposed to new investment - "is not prohibited under US law, there is little about the current business climate to recommend it." The Washington Post Forgetting safety for sake of expediency LOS ANGELES - In 1997 President Clinton signed a law to speed the Food and Drug Administration (FDA)'s approval of new prescription drugs. Under the new law the average time for approval has dropped to 12 months from about 30 months. However, the FDA's recall of eight prescription drugs since the law's approval suggests that the agency may be short-shrifting safety in hurrying drugs to market. A case in point was the FDA's decision to remove the adult-diabetes drug Rezulin from the market - more than two years after testing linked it to liver failure. Last Wednesday Rezulin's manufacturer, New Jersey-based Warner-Lambert Co, complained that the FDA had removed the drug merely because of "repeated media reports sensationalising the risks associated with Rezulin therapy." Much of that reporting, which was far from sensationalising, came from the Los Angeles Times' David Willman. The FDA has linked the drug to 63 recorded deaths, a small proportion of the 1.9 million diabetics who have taken the drug. But consumer-safety groups say the figure is probably much higher, and the FDA's senior epidemiologist reportedly estimates that 20 Rezulin patients a month have been suffering liver failure. The dispute over the extent of Rezulin's harm underscores the inability of the FDA's "post-market surveillance" system to gauge the dangers of prescription drugs. One key problem is the FDA's concentration on drug approval at the expense of monitoring. Another is the agency's failure to require doctors and hospitals to report instances when they suspect that a drug has seriously harmed a patient. Congress, now meeting FDA officials to decide on the agency's budget for fiscal 2001, has a perfect opportunity to beef up post-market surveillance and reporting of serious adverse drug reactions. Legislators should also press the FDA about why it failed to require liver testing in Rezulin users upon the drug's release in 1997, even though Warner-Lambert's own tests suggested that the drug caused liver damage. Congress and the Clinton administration may have been right in 1997 to allow some drugs on a fast track to approval. But Rezulin's story suggests that in doing so they may have put continued drug-safety monitoring on a dangerously slow track. The Los Angeles Times |