With the exception of the powerful presence of the International Monetary Fund, Japan has led the pack of neighbouring countries providing Thailand with a US$16.7 billion bail-out fund, almost amounting to a de facto East Asian Economic Caucus, as proposed by Malaysia.

Lining up behind Japan are China, which has offered $1 billion; Hong Kong, $1 billion; Singapore, $1 billion; Malaysia, $1 billion; Indonesia, $500 million and South Korea $500 million.

Australia's geo-political interests make it impossible for it to stay out, so it has decided to match its Asean neighbours by pitching in $1 billion. The World Bank and the Asian Development Bank have also put forward $1.5 billion and $1.2 billion respectively to participate in the largest bail-out fund since the Mexican peso crisis in 1992.

Inadvertently, the international effort to bail Thailand out of its financial and foreign exchange crises has given the impression that an EAEC-style regional bloc is in the making. EAEC is an informal regional economic cooperation forum for which Malaysian Prime Minister Mohamad Mahathir has been pushing hard for international recognition, presumably in reaction to the Western domination of global trade and economic affairs.

Mahathir's ''look east" policy focuses upon Japan as a regional leader for the members of the Association of Southeast Asian Nations, with China acting as a counterweight. South Korea is also another member from the North East. Mahathir does not include Australia and New Zealand in this equation.

Incidentally, the Asean heads of government will hold their third summit in mid-December. For the first time, the meeting will also include a joint summit meeting with leaders of China, Japan and South Korea, to be followed by a separate forum with each of the northern neighbours.

In his speech at the Asean Ministerial Meeting in Kuala Lumpur last month, Mahathir said the summit would be a good opportunity for regional leaders to discuss regional and global economic issues with their northern counterparts. He also called upon the regional grouping to stand strong against what he called a well-planned effort to undermine the Asean economies, and urged regional unity to fight enemies from outside. Unlike Malaysia, Thailand is pro rather than anti-Western.

While Mahathir has openly blamed George Soros, the currency raider who blazed the trail by laying siege against the baht, as the prime mover behind the regional currency turmoils, Thai leaders have so far avoided trading verbal attacks with Soros.

A conspiracy theory has been doing the rounds of the Thai financial markets claiming that the Bank of Thailand cut a deal with Soros after his baht attack in mid-May. Soros, whose baht supply had been cut off by the creation of the two-tier currency system, was purportedly given baht from the central bank to cover his short baht positions in return for his gentleman's agreement not to mount further attacks against the currency.

Although the United States' role in bailing out Thailand is crucial, the US will not give a single dollar to add to the Bank of Thailand's dwindling foreign exchange reserves. US Treasury Secretary Robert Rubin made it clear from the outset that the US would not contribute any direct financial assistance to Thailand but would work with the IMF to rally international support behind the country.

The US has decided to refrain from digging into its pockets to bail out Thailand for several reasons. It has indicated that Thailand did not ask for the assistance and was happy to have the US playing a key role in pushing the IMF, the World Bank and the ADB to come to its rescue. Second, after the Mexican crisis the US government passed a law stipulating that any foreign aid of more than $1 billion with a maturity of at least 12 months must receive White House approval.

The US has the greatest influence in the IMF, holding a 31 per cent stake in the international monetary organisation and an 18.1 per cent voting right.

When the peso crisis swamped Mexico in 1994, US President Bill Clinton immediately pressured the IMF to provide $20 billion in emergency stand-by credit, while the US would match the IMF with another $20 billion. Clinton's package saved not only Mexico but also the world from financial turmoil. He did so without consulting Congress in advance, yet Bob Dole, the Senate majority leader who challenged Clinton in the presidential election in November 1996, threw his unequivocal support behind the US-led initiative to bail out its southern neighbour.

Japan's $4 billion contribution to Thailand reinforces its attempts to carve out a larger regional role. Last year, Japan invested in 309 projects in Thailand worth a staggering Bt131.1 billion, making it the largest foreign investor in the country. Helping Thailand out will also assist Japanese banks, which account for about half of Thailand's total foreign debts, as well as Japanese investors.

However, the ever-cautious Japanese signalled that they would only lead the international effort to bail out Thailand after the IMF gave it clearance. IMF vetting is the only guarantee that Thailand will strictly adhere to the conditions to mend its past macro-economic imbalances.