Baht/economic crisis
Banking crisis
General issues
My profile
Barns and Noble
Thanong's Poll
Message Board
Chat Room



Send FREE Greetings!



ROXY.com Is The Fastest Way To Shop!









Try AOL Now!  up to 700 Hours FREE



Asian fund seen as tough nut to crack

May 6, 2000: 

CHIANG MAI – Geopolitics will make it hard to create an Asian Monetary Fund, but top Thai Cabinet members yesterday said the process to strengthen regional financial collaboration was “inevitable”.

Hubert Neiss, former director of the International Monetary Fund’s AsiaPacific department, said he personally supported attempts to create an Asian Monetary Fund due to the present deficiencies in the international financial system.

But he cautioned that geopolitics would make it difficult for Asia to launch a regional support fund of its own.

“It’s going to take a long time,” he told The Nation.

Neiss, who is now chairman of Deutsche Bank AG’s Asia operations, said one of the most difficult tasks was to persuade member countries to sacrifice their foreign exchange reserves to the fund. This was not an easy political decision to make.

“The size of the fund will have to be rather big, otherwise it won’t have the credibility,” he said. “And if a country like Indonesia should run into a crisis and need US$30 billion$40 billion [Bt1.14 trillionB1.52 trillion], the fund will have to come to the rescue.”

But Deputy Prime Minister Dr Supachai Panitchpakdi said the inadequacy in financing support from multilateral lending institutions, mainly the IMF and the World Bank, has made it necessary for Asia to have a regional financing facility of its own.

“I think it’s inevitable that we put in more efforts towards guarding the stability of the regional financial arrangement,” he said.

Today, finance ministers from Asean will hold talks with their counterparts from China, South Korea and Japan about the possibility of enlarging the regional currency swap arrangement. The meeting will take place on the sidelines of the annual meeting of the Asian Development Bank’s board of governors.

Finance Minister Tarrin Nimmanahaeminda, who will host the event in his hometown, declined to elaborate ahead of the meeting, saying only: “We’re going to discuss the possibility of augmenting the existing Asean swap agreements as agreed at the Brunei meeting last year.”

Asked about the size of the regional swap agreements, Tarrin said it was too early to say.

Earlier Eisuke Sakakibara, the former viceminister of Japan’s Finance Ministry, suggested that the regional financial arrangement should have a size of at least $20 billion$40 billion.

The regional financial swap arrangement is part of the broader framework of the Asian Monetary Fund, whose function will also include macroeconomic research, training, financing arrangements and surveillance. The framework of the fund will be similar to that of the IMF, according to officials.

Deputy Finance Minister Pisit Leeartham said Thailand fully supported the Asian Monetary Fund, which will guard the region from future crises. He added that the arrangement would complement the IMF.

Martin Wolf, associate editor of the Financial Times, also cautioned that it would take time before the fund could actually take off, given the difficult experiences Europe went through before it could embark on financial integration.

BY Thanong Khanthong and Yindee Lertcharoenchok



Ask Jeeves!



dot com mail,  dot com biz card and Web Registration













PC Hardware



Home ] Baht/economic crisis ] Banking crisis ] Overdrive ] General issues ] My profile ] Barns and Noble ] Thanong's Poll ] Message Board ] Chat Room ]