East Asian countries agree to create $80 bln fund by next June

By Yoo Cheong-mo
BEIJING, Oct. 24 (Yonhap) -- South Korea, China, Japan and 10 member states of
the Association of Southeast Asian Nations (ASEAN) on Friday agreed to create an
US$80 billion joint fund by next June to fight a regional financial crises, South
Korean officials said.
Meeting on the sidelines of the Asia-Europe Meeting (ASEM) summit that was to
kick off here later Friday, the leaders of the so-called ASEAN Plus Three
countries, including South Korean President Lee Myung-bak, also agreed to push
for the establishment of a regional economic surveillance organization to ensure
greater financial stability in the region, said the officials.
"Lee, Chinese Premier Wen Jiabao, Japanese Prime Minister Taro Aso and 10 ASEAN
leaders held an informal breakfast meeting in Beijing and agreed on the need to
beef up regional cooperation and policy coordination in the face of the global
financial crisis," Lee's spokesman, Lee Dong-kwan, said in a press statement.
"The East Asian leaders agreed to accelerate multilateral cooperation to create
an $80 billion fund by the end of next year's first half and establish an
independent regional financial market surveillance organization."
The spokesman also noted that the East Asian leaders agreed to actively
participate in various international efforts to stem the spread of the
U.S.-originated financial crisis.
ASEAN members include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the
Philippines, Singapore, Thailand and Vietnam.
The so-called "ASEAN Plus Three" fund, if created as planned, will replace the
current Chiang Mai Initiative, which came into being in 2000 in the wake of the
Asian financial crisis to facilitate mainly bilateral currency swaps.
The East Asian countries began discussions in 2006 on transforming the Chiang Mai
Initiative into a more powerful and multilateral reserve pooling mechanism and
reached a preliminary agreement in May this year to create a foreign exchange
reserve pool of $80 billion.
The preliminary agreement called for South Korea, Japan and China to provide 80
percent of the Asian monetary fund, or $64 billion, with ASEAN members promising
to provide the remaining $16 billion.
"Despite the May agreement, South Korea, China and Japan had shown differences on
details of the Asian monetary fund, such as the cost-sharing ratios and its
management method," a top aide for President Lee said.
"However, the three countries have now ironed out their differences in Beijing,
paving the ground for an early creation of the new Asian monetary fund," said the
aide.