Analysts tell bloc to keep brave face
HUA HIN, Thailand: Southeast Asian leaders called on Sunday for increased cooperation and urgent reform to deal with the global financial crisis. They made the call as they wrapped up a summit here dominated by their economic woes topped by falling exports.
Leaders from the 10-member Association of Southeast Asian Nations (Asean) have spent most of their annual meeting seeking ways to soften the impact of the meltdown on their export-driven economies, with millions of jobs at risk.
Analysts, however, warned that there was little the group could do to counteract slumping demand for its exports.
“They can try to keep a brave face,” said David Cohen, Singapore-based regional economist with research house Action Economics. “There’s not much collective action they can take.”
Asean groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, The Philippines, Singapore, Thailand and Vietnam.
In a joint statement issued at the end of the summit, the Asean leaders urged developed and developing countries to show “more coordinated action . . . to restore financial stability and ensure the continued functioning of financial markets.”
They further called for “bold and urgent reform of the international financial system,” while agreeing to “stand firm against protectionism.”
The leaders also signed a declaration on setting up a European Union-style Asean community by 2015 that is aimed at protecting the diverse bloc of around 570 million people from future economic turmoil.
Thai premier Abhisit Vejjajiva, who is also currently chairman of Asean, said the leaders “have sent a clear signal about our guidelines to solve economic problems in the region.”
He outlined further steps in a press conference, including that Asean members should keep each other informed of their economic policies and closely monitor for any hints of protectionism.
Asean, with a combined gross domestic product of around $1.4 trillion, had until recently been a relative bright spot in the world economy.
But because the region is largely dependent on exports, it is at the mercy of the chaos in the rest of the world’s economies. Singapore is already in recession and Thailand’s economy shrank in the last quarter of 2008.
Leaders underscored the importance and urgency of the so-called Chiang Mai initiative—a regional emergency fund set up in 2000.
Foreign ministers from Asean and from China, Japan and South Korea agreed one week ago to extend the initiative to $120 billion, but gave no date.
Asean signed a free trade deal with Australia and New Zealand on Friday.
Ministers on Sunday also signed an energy agreement to allow members to buy oil at a discount during times of crisis.
Splits over protectionism have also called Asean’s unity into question, tugging at the seams of a diverse organization frequently derided as a talking shop since it was founded 42 years ago.
Abhisit and Singapore premier Lee Hsien Loong have repeatedly urged against protectionist tendencies but Malaysian premier Abdullah Ahmad Badawi has said it is normal during a crisis.
The economic crisis has been overshadowed at times during the summit by human-rights issues, even as Asean leaders attempted to talk up a regional rights body that will be set up under the group’s new charter.
Activists were angered on Saturday when the premiers of Cambodia and military-ruled Myanmar barred two civic representatives from attending rare face-to-face talks with the 10-Asean leaders.
The proposed rights body has also come under fire for being effectively toothless with no powers to investigate or prosecute abusers.
Rights are a perennially thorny issue for Asean. The bloc has been accused of failing to use its influence to effect change in Myanmar, which has been ruled by the army since 1962 and is accused of gross rights violations.
The grouping was also expected to agree to intensify efforts to fight militants and pledge to work for the full implementation of a regional counter-terrorism pact this year.
President Gloria Arroyo is glad that her proposals were approved for implementation during the summit, Malacañang said also on Sunday.
“The President is happy and satisfied with the outcome of the 14th Asean Summit. Her pet projects were taken into consideration there and that is why she is in very high spirits,” Press Secretary Cerge Remonde Remonde said in a statement.
President Arroyo presented the creation of an equity fund, which Asean member-countries could tap into to address liquidity problems they may experience amid the global crisis, and the establishment of an Asean Economic Community as agreed upon by the leaders during the 12th Asean Summit held in Cebu.
She also was able to secure the approval by the BIMP-EAGA (Brunei Indonesia Malaysia Philippines-East Asia Growth Area) of her proposal to widen the Philippine fishing area to include waters in East Asia, and the adoption of the roll-on, roll-off transport system in countries composing the sub-regional group.
The adoption by BIMP-EAGA of the proposals was a significant breakthrough in the sub-region’s vision to achieve a common Asean Economic Community, Remonde said.
Mrs. Arroyo returned to Manila from the summit also on Sunday.
She was welcomed home by her husband Jose Miguel Arroyo, Executive Secretary Eduardo Ermita, Armed Forces chief Gen. Alexander Yano, Philippine National Police chief Director General Jesus Verzosa and Interior and Local Government Secretary Ronaldo Puno.
— AFP With Angelo S. Samonte, Manila Times