Reuters-FOCUS-ASEAN looks for exit

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Subject: Reuters-FOCUS-ASEAN looks for exit from crisis, faster aid 

FOCUS-ASEAN looks for exit from crisis, faster aid
03:30 a.m. Mar 18, 1999 Eastern
By Chris Johnson

HANOI, March 18 (Reuters) - Southeast Asian finance ministers were gathering
in Vietnam on Thursday to discuss ways to rescue the region from economic
collapse and prevent future crises.

Officials from the the Association of South East Asian Nations (ASEAN) said
the ministers would discuss a ``surveillance mechanism'' designed to monitor
economic performance and give early warning signals of future financial
woes.

They would also press Japan, which along with China and South Korea is
sending senior officials to meet ASEAN ministers, to speed up disbursement
of funds from its $30 billion Miyazawa Plan aid package.

Economists say better information and financial transparency would attract
foreign capital into the region and minimise the chances of a repeat of the
kind of catastrophic meltdown seen across Asia over the last two years.

But they say there is very little finance ministers from the nine-member
grouping, who are gathering in Hanoi for a meeting on Friday and Saturday,
can do to help solve the current crisis, beyond measures already in place.

``I can't imagine there is a lot they can do,'' said David Fernandez, ASEAN
economist at J.P. Morgan. ``The best they can hope for is preparing for the
next crisis.''

ASEAN groups Brunei, Indonesia, Laos, Malaysia, Myanmar, the Philippines,
Singapore, Thailand and Vietnam.

Founded in the 1960s, ASEAN grew up during Southeast Asia's boom years when
many countries in the region were seen as ``Tiger Economies'' tearing
through double-digit growth rates and attracting huge amounts of Western
capital.

But the devaluation of the Thai baht in July 1997 exposed huge inadequacies
in the region's financial system, bringing Southeast Asian banks and giant
conglomerates tumbling to the ground.

The crisis took almost everyone by surprise, including the ASEAN
governments, because much economic activity had operated within a web of
secrecy with little concrete financial data on either the macro-economies or
corporate performance.

Miranda Goeltom, managing director of the Indonesian central Bank, told
Reuters it was essential to provide more information on ASEAN economies to
stop such a crisis recurring.


``The focus here will be how to prevent crises in the future and to resolve
the current situation,'' she said.

Economists say evidence of more transparency could attract new investors to
Southeast Asia and help it recover eventually.

``Foreign capital is looking for a place to go outside the United States and
Europe and will settle where it feels comfortable. It will be repelled if it
thinks bad news is being swept under the carpet,'' said Fernandez.

Goeltom said ASEAN hoped Japan would accelerate distribution of funds from
the its Miyazawa Plan, because many countries in the region were suffering
badly from the regional crisis.

She said Japan was also considering broadening its aid to Asia by lending
money to countries not originally targeted by the Miyazawa Plan, but said it
was unclear if such a package would involve new funds, or come from the $30
billion already set aside.

Economists say more aid would help alleviate Asia's problems but doubt what
other steps ASEAN can take to hasten recovery.

``Other than speeding up banking reform and improving corporate governance
and restructuring, which is already happening, there is little ASEAN
governments can do,'' said Daniel Lian, head of Asian markets research at
ANZ Bank in Singapore.