Asean to Back Stimulus Measures [... but CPP Cheam Yeap said there was no need for economic stimulus in Cambodia, was he shooting in his foot?]

MARCH 1, 2009
By DAVID ROMAN

HUA HIN, Thailand -- The Association of Southeast Asian Nations, or Asean, Sunday said it will support economic stimulus measures and reject protectionist moves during the global economic crisis.

In a joint statement delivered at the close of the 14th Asean summit here, the heads of government of the 10 member countries said economic measures must promote sustainable growth in a region where the top economic powerhouses are highly dependent on exports to developed countries, such as Japan and the U.S., now deep into recession.

No specific policy actions were announced during the summit, where the focus of interest was on human rights and illegal immigration issues. This followed recent disputes among Asean members on the treatment of seaborne migrants along the eastern half of the Indian Ocean.

As planned, Asean leaders during the summit signed an ambitious free-trade agreement negotiated last year with Australia and New Zealand. This is the most comprehensive trade pact ever completed by the 41-year old regional grouping, and a harbinger for a joint Asean FTA deal now being discussed with the European Union.

In a related meeting the previous weekend, Asean finance ministers had agreed to increase the size of the so-called Chiang Mai Initiative -- a pool of bilateral currency swaps for emergencies -- to $120 billion from $80 billion, and turn the pool into a multilateral swap system, possibly with easier access to the funds.

However, that move remains largely symbolic as three non-Asean countries -- China, Japan and South Korea, accounting for 80% of the extra funding for the pool -- have yet to agree on their respective contribution, and the pool has been very sparsely used since it was launched in 2000.

Asean leaders inked other minor deals at the end of the summit, including the general outline of an internal regional mechanism to address a potential lack of oil products in any member, and stressed that the region must cooperate more to surmount the current economic crisis.

Abhisit Vejjajiva, prime minister of host country Thailand, said Saturday that the regional grouping -- including several export-oriented countries -- faces negative short-term economic prospects.

In its closing statement, Asean called for a "bold and urgent reform of the international financial system" to take into consideration "the interests and voices of the emerging and developing economies."

Besides Thailand, Asean comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore and Vietnam.