Thanong Khanthong reports that given the threat of regional economic turmoil, the stakes are too high to fail in the bis to regain stability.

Finance Minister Thanong Bidaya, who is leading a high-powered delegation to Tokyo, has categorically denied that he is seeking somewhere between US$10 billion and $20 billion in bailout loans from the Japanese government to keep Thailand's cash flow positive. Neither has Rerngchai Marakanond, the Bank of Thailand governor, made any specific request for financial assistance from his Japanese hosts.

Diplomatically speaking, it should come out that way ­ or the way the Japanese would like to see it. Japan's interests lie not in Thailand's financial stability alone but also in the entire region's. Japan's foreign direct investment in Asia accounts for 24.2 per cent of the world's total. Japanese banks have also built up a huge loan exposure in this part of the world.

So the Japanese are extremely careful in treating the plight of Thailand, which is facing financial and currency turmoil. If the crisis is mishandled, it will not only have regional but also global implications, affecting Japanese interests.

The baht has lost 14 per cent of its value since its flotation on July 2 and the currency crisis in Thailand has spilled over into regional markets, which have seen the value of the Philippine peso drop by 6.1 per cent, the Malaysian ringgit by 3.1 per cent, Indonesian rupiah by 2.5 per cent, Singaporean dollar by two per cent and South Korean won by 0.8 per cent.

According to protocol, it is inappropriate for Thanong to make an open plea, in a ready-made package, for direct Japanese intervention to bail Thailand out of its quagmire. The Japanese need time to study the Thai situation and also the plight of other countries in the region. Obviously, the bailout package will be huge, possibly of a greater magnitude than in the Mexican peso crisis, if the entire region is taken into account.

More importantly, if Japan provides direct financial assistance to Thailand and other regional countries, it will amount to a bilateral drive to forge Japan's leadership in this part of the world. It will also mark the first time that Japan has agreed to assume a position of regional leadership, possibly irritating China. Apparently, Japan is not yet comfortable with a regional leadership role, although its prime minister, Ryutaro Hashimoto, has claimed that Japan will represent a voice of Asia in the G-7 forum.

Japanese officials have indicated that the International Monetary Fund (IMF) should be brought along to help Southeast Asian countries overcome the financial and currency turmoil. The presence of the IMF will raise the level of the issue from regional to global. It will automatically become a multilateral effort to restore order, not only to the regional financial markets but also global markets.