Asian nations hope to finalize details of a US$120 billion fund to battle future financial crises by next month and launch it soon after, a draft document obtained yesterday showed.
Regional leaders will also push for the establishment of an independent unit to monitor signs of an impending financial crisis, said the document, which is to be issued at a weekend summit in Thailand.
The 16 Asian leaders will support their finance ministers’ decision in February to expand the crisis fund from the original US$80 billion and stress the importance of making the fund operational “as soon as possible.”
They will encourage their finance ministers “to continue their efforts to reach an agreement” on its main components at their next meeting in the Indonesian island of Bali next month, the document said.
The 10-member ASEAN will contribute 20 percent of the US$120 billion, while their partners China, Japan and South Korea will account for the rest.
At a meeting in Pattaya on Thursday, ASEAN finance ministers agreed that Indonesia, Malaysia, Singapore and Thailand would contribute US$4.76 billion each and the Philippines US$3.68 billion.
The other five members, including ASEAN’s poorest members Cambodia, Laos and Myanmar, would contribute amounts based on the size of their foreign exchange reserves, Thai Finance Minister Korn Chatikavanij said.
China, Japan and South Korea will discuss the size of their contributions among themselves.
The emergency fund, called the Chiang Mai Initiative Multilateralization, is an expansion of the Chiang Mai Initiative — a bilateral currency swap scheme set up after the 1997 to 1998 Asian financial crisis.
Under the new scheme, the swaps will be multilateral, making it easier for countries under stress to borrow emergency funds.
In a related measure, the leaders also said in the document that they will support the “strengthening of the regional surveillance mechanism by establishing an independent regional surveillance unit as soon as possible.”
This unit will “monitor the regional and global economic situation” for signs of an impending crisis that might affect Asia, it said.
Excesses in the US financial heartland of Wall Street have been largely blamed for the current global economic downturn, but Asian banks have held up well thanks to measures imposed after the 1997 to 1998 regional financial meltdown.
However, Asia’s export-reliant economies have been hit by falling global demand, sending some of them into recession.
ASEAN comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
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