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Asean leaders highlight need for economic reform


MANILA, Philippines - Southeast Asian leaders yesterday highlighted the need for regional integration and macro-economic reforms to counter a global downturn that has been battering their economies. In a joint statement issued at the end of the two-day 14th ASEAN Summit in Hua Hin, Thailand, the leaders vowed to shun protectionism and to support efforts that would bolster global trade, while allotting sufficient resources to save jobs and assist vulnerable sectors. The statement did not spell out any specific actions but the leaders said they endorsed expansionary policies, including fiscal stimulus plans, monetary easing, access to credit and trade financing, and measures to stimulate domestic demand. President Gloria Macapagal Arroyo, who arrived yesterday from the summit, did not issue an arrival statement. In Southeast Asia, Singapore is in recession and economists say Malaysia and Thailand are on the brink, while Indonesian growth has slowed to its weakest pace in more than two years. Many Asian countries have announced stimulus plans in a bid to stem the economic damage, but exports are not expected to stage a major recovery until consumers in the West start spending again. The leaders agreed to stand firm against protectionism and refrain from introducing or raising new trade barriers, and called for “bold and urgent reform" of the international financial system, the statement said. It stressed “the importance of macroeconomic policy coordination, standing firm against protectionism, implementing the ASEAN Economic Community Blueprint, and intensifying efforts for a strong Doha Development Agenda outcome. “We shared policy experience on fiscal stimulus packages ... We agreed that counter-cyclical and more coordinated macroeconomic policies are the appropriate response to contain the ongoing global financial crisis. “At the global level, we agreed to work in tandem with the G20, particularly on the reform of the international financial institutions and markets ... We looked forward to sharing ASEAN’s views and working together with other major economies..." Rodolfo C. Severino, senior research fellow at Singapore-based Institute of Southeast Asian Studies and former ASEAN secretary-general, said the commitments made would boost investor confidence in the region. “This will serve to strengthen the confidence of consumers and investors. These things should be done and I think all are doable," he said in a telephone interview. Next: Moves to expand Asian regional fund commended Moves to expand Asian regional fund commended The ASEAN leaders also commended the region’s finance ministers for their efforts to expand the Chiang Mai Initiative, a regional fund that will allow countries with liquidity problems to borrow foreign currency from another country. The bulk of the planned $120-billion fund, or 80 percent, is to be funded by ASEAN’s “Plus Three" partners: China, Japan and South Korea. ASEAN, which consists of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam, will shoulder the remaining 20 percent. Finance Secretary Margarito B. Teves, interviewed during the weekend, said ASEAN ministers were still discussing whether to adopt the “equal" or “burden" sharing approach. “In terms of what they call the headline numbers which means equal sharing, it (the contribution of the Philippines) would roughly be $4.5 billion, but because we have a smaller amount of international reserves, about $36-$37 billion, if we apply 10 percent that is about $3.6 or $3.7 billion," he said The initiative, Mr. Teves said, may be implemented when finance ministers meet in Bali, Indonesia this May. ASEAN leaders also approved: * A declaration committing to a European Union-style ASEAN community by 2015; * inauguration of the ASEAN Human Rights Body during the 15th ASEAN Summit; * strengthening cooperation to address climate change and food and energy security; * development of a regionally-integrated disaster response system; and * enhancement of efforts to attain the United Nations Millennium Development Goals. ASEAN has begun, with this summit, implementing a road-map that will turn what used to be a consensus-based group long derided as a talk-shop into a single economic community of 570 million people with a combined GDP of $2 trillion in six years. The most tangible outcome of the meetings was the signing of a free trade deal between ASEAN, New Zealand and Australia that could eventually add $48 billion to economies in the region. - BusinessWorld with a report from Reuters
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