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ASEAN opposes protectionism

Source: Agencies | March 1, 2009, Sunday | Print Edition

LEADERS of Southeast Asian nations have agreed to ease monetary policy and resist protectionism as they fight the financial crisis that is hurting their export-dependent economies, a draft statement showed.

The 10-member Association of Southeast Asian Nations also vowed to work with the G20 on reforming financial institutions.

"We agreed that counter-cyclical and more coordinated macroeconomic policies are the best response to this global financial crisis," said the draft chairman's statement to be issued after the summit ends today.

"Some governments have already implemented fiscal stimulus packages to boost domestic demand and accommodative monetary policy that enable the banking sector to continue their function."

The statement said the leaders were committed "to resist any protectionist measures which would further dampen global trade and slow down the economic recovery" and urged major players in the World Trade Organization to bring about an early conclusion of the Doha Round.

Thai Prime Minister Abhisit Vejjajiva said at the start of the summit yesterday in Thailand's seaside resort of Cha-am:"We will be severely tested from now on, both as a group and as a part of the broader Asia region. As the financial crisis deepens, the world will look toward our region for action and for confidence."

ASEAN has moved toward becoming a single community of 570 million people with a combined GDP of US$2 trillion in six years, he said. But leaders are worried about rising unemployment.

The summit, scheduled for December in Bangkok, was postponed and moved to Cha-am due to protests that included the seizure of Bangkok's main airports.

Singapore Prime Minister Lee Hsien Loong said the world could be in for several years of slow growth unless the banking system was fixed. "I think the US recession will last this year, maybe a bit longer," he said in yesterday's Bangkok Post. "But the concern is what happens after the US recession: whether there is a strong recovery or whether in fact the difficulties will take several more years to work out."

ASEAN signed a Free Trade Agreement with New Zealand and Australia on Friday that the Australia government says will add US$48 billion eventually to economies in the region.

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