Asian Officials Eye ASEAN Fund
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 Press.
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.