Apec summit ends with US commitment to tackle economic crisis in Pacific Rim
One of the country’s most respected commentators on Russia, the EU and the US, Mary Dejevsky has worked as a foreign correspondent all over the world, including Washington, Paris and Moscow. She is now the chief editorial writer and a columnist at The Independent and regularly appears on radio and television. She is an Honorary Research Fellow at the University of Buckingham.
Thursday 27 November 1997
The plan was announced in Vancouver late on Tuesday at the end of the summit of economic leaders from the Pacific Rim, and - as Mary Dejevsky reports - it showed Washington's continued determination to resist pressure from some Asian countries for an 'Asian' solution to their problems.
US officials would not say when the meeting would be held or which finance ministers would be invited, but its purpose is to discuss the rescue plan endorsed at Vancouver this week for the ailing Asian economies - and place it in a global context. It will also have the desirable effect for President Bill Clinton of the US of showing him as an international economic leader, despite his recent defeats on trade and international finance issues in Congress.
The meeting, as presented by the Americans, is intended to sustain the momentum built up at the Asia-Pacific Economic Co-operation (Apec) summit this week, and is in addition to next week's gathering of Asian and American finance ministers in Malaysia. It will have a double purpose: to show that Washington takes the current instability in Asia seriously - despite President Clinton's earlier reference to it as just "a few glitches" - and to make plain the US view that national economies are all part of a single global system and should conform to similar standards.
This was spelt out in the official declaration adopted by the 18 Apec leaders at Vancouver, which asserted the prime role of the International Monetary Fund in all economic rescues - in Asia or elsewhere. "On a global level," it said, "the IMF remains central." But President Clinton, while pleased with the mood of co-operation at Vancouver, and with participants' support for further trade liberalisation, appeared to feel that the global approach needed further impetus.
The rescue plans agreed so far for four Asian countries - Thailand, the Philippines, Indonesia and now South Korea - have a provisional price tag of $68bn (pounds 40bn), more than the Mexican bail-out three years ago and a record for the IMF. But they are not just IMF bail-outs.
The Apec summit also endorsed a set of principles, known as the Manila Framework after the emergency meeting of ministers and central bankers in the Philippines last week. They stipulate IMF involvement, provide for supplementary assistance to be granted regionally "when necessary", and also require recipient countries to commit themselves to whatever reforms may be needed to run their economies and finance systems on a sound basis.
This three-tier framework was applied first to the Indonesia rescue, but it has now been elevated to a general formula to be invoked for other bail-outs. It does not, however, specify which countries might contribute to any supplementary financing, nor does it stipulate any sum.
The endorsement of the Manila Framework was hailed as the main achievement of this week's summit. Participants also tried hard to calm the volatile markets by insisting on the underlying strengths of Asia's tiger economies and stressing the region's exceptionally strong prospects for continued growth. The defiant confidence of the formal declaration sat uncomfortably with the record rescue plan that was endorsed, and not all participants were convinced that Asia's instability could be prevented from spreading.
The two-day meeting also exposed continuing friction between the US and Japan, both on bilateral relations and on an appropriate response to the current turmoil in Asia. President Clinton and other US officials made clear that they regarded Japan as the key to containing Asia's economic difficulties and wanted it to speed up its own economic recovery in the hope that it would provide a locomotive to assist growth in neighbouring countries.
Fearing that economic turbulence in Japan could increase its trade surplus with the US, the Americans also advised the Japanese not to use exports as the prime stimulus for its economy.
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