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A boost for Asean fund
Mon, Feb 23, 2009
The Star/Asia News Network

By EDDIE CHUA

PHUKET, Thailand: Malaysia will contribute US$3.4bil ($5.23bil) as part of a multibillion-dollar credit line to help Asean countries cope with the current economic crisis under the Chiang Mai Initiative.

Deputy Prime Minister Datuk Seri Najib Tun Razak said that the fund, available as loans to member countries, would be available once the main component of the initiative is endorsed at their next meeting in Bali in May.

"Malaysia, Indonesia, Singapore, the Philippines and Thailand have agreed to fork out an equal US$3.4bil each towards the fund," he said.

Najib said the other five remaining Asean countries - Cambodia, Myanmar, Laos, Vietnam and Brunei - would contribute 5% of their reserves to the initiative.

He added that Asean, Japan, China and South Korea's Finance Ministers had also agreed to increase the total size of the fund from US$80bil, as proposed last May, to US$120bil.

Asean members will contribute 20% of the total amount, or US$24bil while the remaining 80% will be shared by Japan, China and South Korea.

Najib, who is also the Finance Minister, said the fund is aimed at improving short-term liquidity of member countries facing the global economic crisis.

"Asean finance ministers have also agreed and reaffirmed their determination at the meeting to increase free trade, investment and to stand firmly against protectionist measures which could worsen the crisis to revive the regional economy."

Yesterday, Malaysia also held bilateral meetings with Indonesia, China and Thailand to further promote trade and spur economic growth to weather the crisis.

"We discussed ways to promote economic initiatives and boost bilateral activities," he said.

The Special Asean+3 meeting, which ended yesterday, also saw participating countries draw up frameworks, proposals and agreements on how they could work together as trade partners to reduce the impact of the economic crisis.

The meeting, ahead of the 14th Asean Summit at the Thai resort of Hua Hin from Feb 27 and March 1 to discuss the region's response to the crisis, also saw various issues on the regional economic situation, policy measures and other financial cooperation being thrashed out.

The Chiang Mai Initiative was originally created as a measure against the 1997-98 Asian financial crisis.

The outcome from the Asean+3 Finance Ministers Meeting will also be presented to the upcoming ministers' meeting next month for the Group of 20 economies and the G20 summit in April. -The Star/ANN

 
 
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