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Monday, December 15, 1997 Published at 14:56 GMT

World: Monitoring

ASEAN summit: media spotlight
image: [ Asean leaders have called for international action ]
Asean leaders have called for international action

The BBC's Enver Solomon reports from Kuala Lumpur
A round-up of media reports from the Association of South East Asian Nations summit which has ended with a call for greater international effort to overcome the region's financial crisis:

Chinese president meets Malaysian supreme ruler; discuss financial crisis

Text of report by Xinhua news agency

Kuala Lumpur, 15th December: Chinese President Jiang Zemin today expressed his confidence that ASEAN would surely overcome its economic difficulties and the Asian economy would continue to develop vigorously although ASEAN has met some financial problems.

In a meeting with Malaysian Supreme Head of State Tuanku Jaafar here this morning, Jiang said that he was happy to come to Malaysia to participate in the informal summit of East Asian nations on the occasion of the 30th anniversary of the founding of ASEAN (Association of Southeast Asian Nations).

Jiang noted that the informal summit would offer a very good chance of gathering for the leaders of East Asian nations.

"Through the meetings, we can have an extensive exchange of views and increase our understanding, which is beneficial to promoting the development of mutual relations," he said.

Jiang pointed to the booming of ASEAN economy over the past years, saying that although there existed some financial problems, ASEAN would surely overcome its temporary difficulties and the Asian economy would continue to develop vigorously so long as the parties concerned increase their coordination and cooperation.

The Chinese president also briefed Tuanku Jaafar on China's economic development and invited him to visit China again at his convenience.

The Malaysian supreme head of state expressed his thanks for the invitation and recalled with pleasure his visit to China last July.

Tuanku Jaafar, sharing Jiang's views on the informal summit of East Asian nations, expressed the hope that leaders taking part in the meeting would have an extensive exchange of views and work for the continuing prosperity and stability in the region.

Source: Xinhua news agency, Beijing, in English 0441 gmt 15 Dec 97

Japanese, Malaysian premiers differ on conditions for IMF rescue packages

Excerpts from report by the Japanese news agency Kyodo

Kuala Lumpur, 15th December: Japanese Prime Minister Ryutaro Hashimoto told Malaysian Prime Minister Mahathir bin Mohamad on Monday [15th December] that east Asian countries struggling to cope with financial crises cannot expect to receive bail-out packages with no strings attached.

"Prime Minister Hashimoto told him clearly that the reality of the situation is that funds simply cannot be provided without International Monetary Fund (IMF) conditionality," a Japanese Foreign Ministry official said.

Officials said Hashimoto, who arrived Sunday in the Malaysian capital for an unprecedented east Asian summit meeting later Monday, conveyed Japan's firm stance in about 10 minutes of talks with Mahathir, a fierce critic of the IMF who has argued that IMF conditions compromise recipient countries' sovereignty.

Mahathir was said to have asked Japan to intercede in the situation so that countries suffering from currency crises can be spared the IMF's orthodox bail-out requirements, which include increased taxes, high interest rates and budget cuts.

"We are looking to Japan's role since Japan's voice carries the most weight in east Asia," he was quoted as saying.

According to the officials, Mahathir argued that the belt-tightening measures imposed by the Washington-based agency, to which Japan is the second largest contributor of funds, have yet to yield results and may not have the intended effect of shoring up market confidence.

He cited Jeffrey Sachs, director of the Harvard Institute for International Development, who has argued that IMF intervention can worsen an already panicky situation by confirming to investors that they were right to flee in the first place.

[ image: Malaysian Prime Minister Mahathir Mohamad]
Malaysian Prime Minister Mahathir Mohamad
Mahathir suggested that his government's ability to service its overseas debt is not so serious as to force it to seek IMF aid, but lamented the difficulties facing the private sector due to the decreased value of the Malaysian ringgit and higher interest rate. But for other countries in the region, he warned, prolonged inability to restore market confidence could give birth to political instability and further worsen the economic situation...

Hashimoto stressed that the important thing for countries in crisis to do is to strictly abide by their commitments under the so-called Manila Framework, under which ASEAN finance ministers agreed with counterparts from other Asia-Pacific nations in Manila last month to establish a new framework for regional finance cooperation.

The framework includes measures to strengthen the IMF's capacity to respond to financial crises and to set up a cooperative financial arrangement to supplement IMF funds. The framework was endorsed at the Asia-Pacific Economic Forum (APEC) leaders meeting in Vancouver, but Mahathir pointed out that the region's currencies have further depreciated in value since then.

The officials said Hashimoto told Mahathir of his concern that "If the Manila Framework is not adhered to, then money from the IMF and donor countries will simply not come. This is the reality."

Responding to Mahathir's request that Japan intercede to help its east Asian neighbours, the officials said Hashimoto told him that the situation is such that Japan cannot tackle it on its own.

"If agreements reached between the IMF and countries which requested aid are not implemented, then the needed funds would not come from the USA and Europe," he reiterated...

Source: Kyodo News Service, Tokyo, in English 0412 gmt 15 Dec 97

Chinese, Vietnamese premiers agree value of personal contacts

Text of report by Xinhua news agency

Kuala Lumpur, 14th December: Chinese President Jiang Zemin said here today that the face-to-face dialogue between leaders of China and Vietnam, which are neighbours, is of great importance in promoting bilateral relations.

The Chinese president, who arrived here this afternoon for the upcoming informal summit between ASEAN [Association of Southeast Asian Nations] and China, Japan and South Korea and that between China and ASEAN, made the remarks while meeting with Vietnamese Prime Minister Phan Van Khai.

Jiang noted the increase in the high-level visits between the two countries in recent years and expressed his hope that the momentum of such high-level visits should be maintained. President Jiang also congratulated Phan on his becoming the Vietnamese prime minister.

Jiang pointed out that both China and Vietnam have similar tasks of reform, opening up and economic construction, saying that "our two countries should learn from each other".

Jiang also spoke highly of the achievements Vietnam has made in its socialist construction. Phan recalled with pleasure his visit to Beijing in July and said that he was glad to meet with President Jiang again in Malaysia.

The Vietnamese prime minister said that the recently-concluded 15th National Congress of the Chinese Communist Party was very successful and Jiang's speech at the congress left deep impression on him.

Phan said that he agreed to the assessment made by Jiang on the bilateral ties between Vietnam and China, adding that leaders of the two countries should work further for enhancing the existing friendly bilateral relations.

President Jiang also extended his congratulations on Vietnam's joining the Asia-Pacific Economic Cooperation (APEC) [forum], and Phan expressed his thanks for the support China gave in this regard.

Source: Xinhua news agency, Beijing, in English 1401 gmt 14 Dec 97

Japan: Premier Hashimoto vows to move swiftly on financial crisis

Excerpts from report by the Japanese news agency Kyodo

Kuala Lumpur, 14th December: Japan's prime minister, Ryutaro Hashimoto, Sunday [14th December] pledged to move swiftly to stabilize Japan's tattered financial system, saying rescue measures will be ready before the end of this year.

"We must have (a policy formulated) by the time the (government) budget is compiled," Hashimoto told reporters while en route to Kuala Lumpur to attend a 12-nation East Asian summit conference on the continuing currency crisis and other economic woes besetting the East Asian region...

Hashimoto, who talked to reporters on board the Japanese government aircraft that flew him to Kuala Lumpur, also reiterated that any public money used in the government rescue plan is primarily designed to protect depositors.

The Japanese government and the ruling Liberal Democratic Party are currently thrashing out a rescue plan centred on a proposal by former chief cabinet secretary Seiroku Kajima to raise 10 trillion yen through bond issues.

"We will sort out all the arguments and address the issue in the proper way," Hashimoto said.

Turning to the series of financial crises that have ravaged Asian economies this year, Hashimoto underscored the importance of an international framework for any rescue operation.

"If we don't act within an international framework, we cannot be totally effective," he said.

The three-day gathering in Kuala Lumpur was under way Sunday evening with an informal dinner meeting involving Hashimoto, Chinese President Jiang Zemin, South Korean Prime Minister Koh Kon and all Association of Southeast Asian Nations (ASEAN) leaders except for ailing Indonesian President Suharto...

Source: Kyodo News Service, Tokyo, in English 1338 gmt 14 Dec 97

BBC Monitoring (, based in Caversham in southern England, selects and translates information from radio, television, press, news agencies and the Internet from 150 countries in more than 70 languages.

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