Reuters-ASEAN 'Cautiously Optimisti

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Subject: Reuters-ASEAN 'Cautiously Optimistic' On Recovery 

ASEAN 'Cautiously Optimistic' On Recovery
08:40 a.m. Mar 19, 1999 Eastern
By Dean Yates
HANOI (Reuters) - Southeast Asian finance ministers expressed cautious
optimism Friday about economic recovery in the region and conducted an
``unprecedented'' review of government policies within each country, a
senior official said.
Rodolfo Severino, secretary general of the Association of South East Asian
Nations (ASEAN), said the group's finance ministers had agreed the region
was emerging from economic crisis but warned that risks still lay ahead.
Severino, briefing reporters after the first day of talks between the
ministers in Hanoi, said a final communiquDe to be issued Saturday would
highlight a new surveillance mechanism designed to give an early warning of
future financial turmoil.
Besides expressing ``cautious optimism'' about a regional recovery,
ministers would also outline some ideas on the current world financial
architecture, although he did not elaborate.
ASEAN members Brunei, Indonesia, Laos, Malaysia, Myanmar, the Philippines,
Singapore, Thailand and Vietnam have gathered for the meeting along with
senior officials from the International Monetary Fund, the World Bank and
the Asian Development Bank.
Opening the two-day talks, Vietnam Prime Minister Phan Van Khai suggested
the worst of the Asian crisis might soon be over.
But World Bank vice president for the East Asia and the Pacific, Jean-Michel
Severino, said while there were signs of revival this was not a time for
complacency.
``Our message to ASEAN would be that it is not the time to relax the effort
on reform, on corporate and financial restructuring, on governance,'' he
said in an interview.
Severino lauded discussions Friday that included reports from each minister
outlining policy steps taken to push recovery. Ministers were able to review
and comment on the various reports, he added.
``The group of finance ministers looked at the programs of each country and
had the chance to comment and assess what each was doing. This information
sharing is the first time, it is quite unprecedented,'' he added.
Asked if any criticism or disagreement was directed at the reports, Severino
declined to comment directly, only saying there were discussions.
He said the written and oral reports covered revival of domestic demand;

safeguards for the poor; revitalization of financial and corporate sectors;
transparency and governance and mobilizing additional resources for
financial growth.
Ministers earlier Friday said the new regional monetary surveillance
mechanism, the ASEAN Surveillance Process, would be a key plank in warding
off another bout of financial misery.
Economists have given a cautious welcome to the monitoring body which aims
to give an early warning of future financial instability.
However, ASEAN officials have yet to decide what type of macroeconomic and
capital flow data would be compiled under the one-year-old mechanism.
Economists have said greater financial transparency was critical to entice
capital back into the region.
ASEAN officials also rejected criticism of their collective response to the
crisis, which snow-balled after the devaluation of the Thai baht in July
1997.
``On the contrary, the way ASEAN has responded to the crisis has been
appropriate and timely, although it is different from one country to
another,'' said Miranda Goeltom, managing director of Indonesia's central
bank.