Asean+3 officials to finalise contributions to currency pool

"Asean working groups are expected to agree how much each country will contribute to the currencyswap agreement," Chaiyuth Sudthitanakorn, director of the Fiscal Policy Office's International Economic Bureau, said yesterday.

Asean working groups and senior officials from the three partner countries will meet from today to March 11 to try to finalise the multilateralisation of the Chiang Mai Initiative, he said yesterday.

They will then forward their conclusions to the finance ministers' meeting on the Indonesian resort island of Bali in May.

In principle, Thailand, Malaysia, Singapore, Indonesia and the Philippines will each contribute equally to make up 20 per cent of the emergency credit pool, while smaller economies will put in less, Chaiyuth said. They were unable to reach agreement on each country's contribution during last week's meeting of finance ministers in Phuket.

The other 80 per cent will be shared by China, Japan and South Korea.

Officials will discuss the three and sixmonth outlook for the economic situation and how it could affect each country's reserves.

One of the key issues is the conditions for using the fund when a country faces serious capital flight, similar to when a country asks for emergency credit from the International Monetary Fund (IMF).

"We still want to impose some tough conditions to draw out the fund; for example, receivers must make a commitment to reform their economies," said Chaiyuth.

Officials from Singapore will report on financial services and currentaccount liberalisation.

Officials from the Bank of Thailand and representatives from the central banks of some other countries will also attend the meeting, he said.

They will work out details of how to create a surveillance unit that will monitor the economic situation in the region and provide an early warning to members.

The unit, expected to be located in the Asean Secretariat in Jakarta, will also be assigned to manage the currency swap during its gestation period.

Finance ministers from the 13 countries want the multilateral swap agreement to be operational within a year.

But some critics do not want tough conditions for using the fund.

Former Thai finance minister Chalongphob Sussangkarn has urged countries involved to drop IMFtype conditions.