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 You are in: Special Report: 1998: 03/98: Asem 2  
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Asem 2 Friday, 3 April, 1998, 12:17 GMT 13:17 UK
How Asem trust fund will work
Social tensions have emerged in Asia in the wake of the economic crisis
The British Prime Minister, Tony Blair has announced the establishment of a new joint trust fund to help Asian countries improve the regulation of their banking sectors.

The Asem trust fund will be modelled on the "Know How Fund" and will provide money, technical expertise and networking for the Asian economies.

This will not provide IMF style funds. Britain is proposing the formation of the fund to cooperate with the World Bank in extending technical assistance for financial restructuring and studying the social impact of economic reform on the country.

Asian countries have repeatedly talked of developing their own separate fund to stimulate trade and investment in the region and Asian countries have indicated that they will put it on the agenda, even though the west believes that this type of job is best left to the IMF.

A French diplomat has talked of how Europe will offer help but would also insist on 'responsibility', stating that:

"otherwise, you can put billions of dollars into Asian economies and they will be wasted."

Europe will also hope to use ASEM to appease criticism that it has not done as much as the US to help the region.
In Indonesia food has been in short supply
Economic issues are at the heart of ASEM and the countries will also look at trade and investment liberalisation, a potentially tricky subject after the Asian crisis with fears of the west using the IMF as a battering ram to prise open Asian markets and gain control of companies.

The first ASEM economics ministers meeting took place in Japan on 27-28 September 1997. The meeting saw the preparation of an Investment Promotion Action Plan covering policies and regulations on investment.

A framework for a Trade and Facilitation Action Plan (TFAP) was also agreed, which aims to reduce barriers for trade between ASEM countries. It is being developed by officials and will be reviewed and hopefully adopted at ASEM2. The TFAP includes specific goals for reducing non-tariff barriers and transaction costs.

Links to more Asem 2 stories are at the foot of the page.


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