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Finance ministers warn of oil threat

The finance ministers of China, Japan and South Korea said that while prospects for their economies remained positive, high oil prices may pose a serious risk to regional economies.

The ministers said on Tuesday that they would welcome efforts to increase energy supplies and therefore lower prices.

The three met in Istanbul in advance of the annual meeting of the Asian Development Bank, which opened yesterday.

"The prospects of the three countries' economic growth for 2005 are positive although the continuous high oil price may pose a major risk to the regional economy," the ministers -- Japan's Sadakazu Tanigaki, China's Jin Renqing (金人慶) and Han Duck-soo of South Korea -- said in a joint statement after meeting on Tuesday night.

The statement said the three "welcome the efforts to increase medium-term energy supply and efficiency including the encouragement of dialogues between oil-producing and oil-consuming nations."

The three also agreed to make concerted efforts to boost their representation in international financial institutions such as the IMF, the statement said. Asian powers have repeatedly said they are underrepresented in such institutions.

The ministers also discussed efforts to expand the so-called Chiang Mai Initiative, a regional network of bilateral currency-swap agreements that was created after the 1997 to 1998 Asian currency crisis and aims at mutual assistance in times of financial difficulties.

Han said the ministers were looking to expand the initiative from bilateral to multilateral agreements.

Earlier, the head of the Asian Development Bank, Haruhiko Kuroda, addressed recent tensions between China and Japan, saying they were unlikely to disrupt economic ties between the two countries, but adding that economic ties could be hurt if the strains persisted.

If the tension between Asia's two largest economies is prolonged "it could undermine further integration of economies in the region," Kuroda said.

But he added: "I don't think this strong interdependence is undermined, because this interdependence is extremely good for both economies."
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