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Substantial progress made in Asian financial crisis

TOKYO, March 27 Kyodo

Deputies of finance ministers and central bank governors from 14 Asia-Pacific economies agreed Friday that while substantial progress has been made in resolving the prolonged Asian financial crisis, it is vital for Indonesia to quickly agree on steps to reform its economy.

''Substantial progress has been made toward a resolution of the Asian financial crisis, although important policy challenges remain,'' the monetary officials said in a chairman's summary issued after their two-day meeting in Tokyo.

The meeting, chaired by Eisuke Sakakibara, Japan's vice finance minister for international affairs, was convened in line with an agreement by the deputies last November in Manila to meet twice a year to monitor economies in the region.

The deputies focused mainly on reviewing progress in economic reforms in Indonesia, South Korea and Thailand, all of which are under economic adjustment programs agreed with the International Monetary Fund (IMF), the summary said.

The economies of South Korea and Thailand ''have improved as a result of the vigorous and sustained implementation of policy measures in their programs,'' it said, but the Indonesian economy ''remained more challenging.''

The deputies urged the Indonesian government in the summary to reach an agreement with the IMF as soon as possible about the implementation of its bailout package in order to ''stabilize its economy and to put it back on track toward sustained growth.''

They particularly stressed that ''corporate debt remained one of the key issues (in Indonesia) that required to be addressed expeditiously.''

On the overall Asian economy, the deputies emphasized ''the need for economies in the region to adopt, and sustain, sound economic and financial policies, coupled with appropriate structural reforms.''

The summary also said they discussed ''the challenge of economic management in the context of globalized capital markets and noted the importance of strengthening the monitoring of capital movements.''

The 14 economies are Australia, Brunei, Canada, China, Hong Kong, Indonesia, Japan, Malaysia, New Zealand, the Philippines, Singapore, South Korea, Thailand and the United States. Representatives from the Asian Development Bank, the IMF and the World Bank also attended the meeting.

They will continue monitoring countries in the region affected by the crisis and discussing how to strengthen the financial basis of the IMF and other international organizations at their next conference, to be held in Malaysia later this year, Sakakibara told reporters.

At the previous meeting in Manila, the deputies agreed on a ''cooperative financing arrangement'' to augment the resources of the IMF and other international financial institutions to aid distressed countries in the region.

Under the arrangement, participants could provide, in consultation with the IMF and on a case-by-case basis, supplemental financial resources for IMF-supported programs.
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Publication:Asian Economic News
Date:Mar 30, 1998
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