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Asian Nations Consider Bailout Fund
- Subject: Asian Nations Consider Bailout Fund
- From: moe@xxxxxxxxxxxxx
- Date: Mon, 01 Dec 1997 04:44:00
Asian Nations Consider Bailout Fund
By Ranjan Roy
Associated Press Writer
Sunday, November 30, 1997; 10:21 p.m. EST
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.