US and European financial institutions will sweep through Asia once the crisis is over, Thanong Khanthong says.

Prime Minister Chuan Leekpai admitted on Wednesday that Thailand is a defendant in the world's ''court of justice'' as its home-grown financial crisis has spread throughout the global marketplace.

Indonesia and South Korea have followed Thailand down the catastrophic path of financial crisis to become co-defendants. The key plaintiff in this rocky affair is the United States. But sooner or later, Chuan warned, the plaintiff could become another defendant if the global financial turmoil is not dealt with seriously.

At issue is the varying perceptions of the scale of Asia's crisis. US President Bill Clinton has said that despite the strength of the US economy, its fortunes depend on the health of the global economy.

Exports account for one-third of the growth in the US economy and Asia represents about 40 per cent of US exports. He believes that the US and other industrialised countries should ''do more'' to prevent the world from facing fallout from Asia's financial turmoil.

Doing more can only mean the US and European powers will have to contribute more money to the International Monetary Fund (IMF), whose job is to guard the stability of the global monetary system.

Yet, it appears that most US and European leaders have sought to down play the impact of the financial turmoil in Asia on their continents.

German Finance Minister Theo Waigel is reported to have opposed any additional funding for the IMF, which is trying to raise an extra US$60 billion in a quota increase to deal with emergencies in the global economies, believing the move was premature.

On Capitol Hill, US politicians are still debating, with suspicions, the possibility of augmenting the US role in bailing out Asia through the IMF.

The IMF, which has seen its funding base weaken to $44 billion after assembling almost $100 billion to bail out Thailand, Indonesia and South Korea, is seeking to increase its funding through the quotas of member countries. It also intends to raise additional money through the so-called New Arrangement to Borrow to cope with unexpected crises in the future.

The US administration is seeking a $3.5 billion commitment to an emergency $48 billion IMF bailout fund aimed for emergency needs in the future. But the US Congress has blocked this proposal due to a dispute over abortion. In addition, the White House is seeking another $16 billion to satisfy the US share of an increase in regular IMF reserves.

So the money is not going to be forthcoming easily. If the IMF does not receive the funding it needs to prepare for future crises, the world will be left with a crippled IMF.

The US and Europe are in danger of being accused of hypocracy, having taken a tough stance against any attempts to resolve the global financial turmoil outside the framework of the IMF.

The $100 billion regional bail-out fund in Asia was recently shot down by the US and Europe over fears that it might supercede the IMF's authority. Yet when it comes to their contributions to the IMF, the two powers are dragging their feet.

Without strong US leadership, Thailand and other regional economies are hinging their survival on Japan. Finance Minister Tarrin Nimmanahaeminda is meeting with top Japanese bankers and officials to discuss the possibility of rolling over the private debts Thai companies, banks and finance firms owe Japanese banks.

Of Thailand's private debts of $70 billion, about half are owed to Japanese banks. Tarrin would reportedly like to see as much of these debts as possible -- mostly denominated in US dollars -- converted into yen to reduce currency risks.

If Tarrin is successful, it may lead to a greater role for the yen in international financial transactions in this region.

The turmoil has led the regional economies to abandon their currency peg systems tied to the US dollar. There is an alternative for central banks in the region to increase the yen's weighting in their foreign exchange reserves as the regional economies have been facing trade deficits with Japan and borrowing heavily from Japanese banks.

Demand for the US dollar in Asia, as companies scramble to buy the greenback to meeting their debt obligations, and the banking crisis are expected to keep the foreign exchange markets volatile at least for the first half of next year. The Thai authorities' ability to tackle the banking crisis is also a pre-condition for a return to stability for the baht, which is now sharply undervalued amid the regional turmoil.

Thailand at this point does not want to do anything to displease the Japanese, who hold the destiny of the country -- if not the region -- in their hands.

The question is whether Japan can assume the burden of regional leader while shouldering the burden of a domestic banking crisis. Japan's delay in resolving its banking crisis is blamed for its sluggish growth over the past seven years, which will have implications for global economic health.

The Organisation of Economic Cooperation and Development (OECD) has warned that world economic growth next year could fall 1 percentage point due to the Asian financial crisis. ''The international integration of financial markets leaves few markets unexposed,'' it said.

The OECD's twice-yearly Economic Outlook report said world economic growth may be depressed by 0.3 per cent this year and 0.9 per cent next year, with growth in the United States falling 0.3 per cent this year and 0.7 per cent next year while growth in the European Union is forecast to drop 0.3 per cent and 0.8 per cent.

The heaviest impact on growth will be felt in Southeast Asia itself, the OECD said. The Thai economy will suffer the worst from the Southeast Asian economic crisis, with its economy shrinking by 1.0 per cent next year before returning to growth in 1999, the OECD said. ''Thailand, which has been severely affected by financial turbulence, has suffered the largest slowdown,'' the OECD said.

At this point, it seems that the US and Europe are looking at Asia from afar with a smile of triumph.

A global financial pact under the auspices of the World Trade Organisation has been sealed, paving the way for further financial services liberalisation -- an area in which US and European banks enjoy a cutting edge against their Asian counterparts.

The sharp devaluation of currencies and the deflationary trend in the region is making it 80 to 100 per cent cheaper to buy into Asian assets, particularly banks and finance companies, which control the bloodlines of an economy.

Of course, US and European trade will be hurt by the high value of their currencies against the competitive devaluation of the Asian currencies.

Somewhere along the line, a new global currency re-alignment must take place to achieve equilibrium. Before that happens, US and European financial houses will step in to strengthen their foothold in Asia in a grandiose way.