As Asia and Europe head towards a summit in Brussels from October 4-5, restoring growth and business activities and making the banking sector work again will feature high on the agenda of the leaders of the 43 nations.
Yesterday, Belgian Ambassador Rudi Veestraeten played host to a seminar in Bangkok on financing growth in Europe and Asia, which was also organised by the Belgian-Luxembourg/Thai (BeLuThai) Chamber of Commerce. Belgium is the current chair of the European Union.
This year's Asia-Europe Meeting (ASEM) will feature two events with leaders of 16 Asian countries and 27 European countries focusing on political development and an economic resolution to the crisis. Another event going on in parallel with the leadership summit will be a business forum, where leaders of the business and financial sectors will come together to determine how to channel money back into the real economy so that businesses can get going again.
In Europe, as well as in the United States, banks are still reluctant to lend money to weak economies. Small and medium-sized companies, in particular, have a hard time acquiring credit to expand their business.
"We're trying to examine what role the banks can play, what is the political view, what industries can do to rebuild trust," Veestraeten said.
Kiat Sittheeamorn, president of the Thailand Trade Representative Office, outlined the challenges facing the global financial system, warning that without a monitoring or sound surveillance system, the financial crisis was bound to come back.
Right after the Group of 20 Summit in London last year, Kiat recalled, all the leaders pledged to pursue further trade liberalisation through the Doha Round and to refrain from falling back on protectionism. As it turned out, 17 countries of the G-20 introduced a combined 48 measures of trade protectionism to shield their industries in the face of the recession. He said Thailand had not introduced any protectionist measures over the past two years.
Looking ahead, Asia is preparing for the future through the US$120 billion (Bt3.75 trillion) Chiang Mai Initiative and regional bond market development.
Twatchai Yongkittikul, secretary-general of the Thai Bankers' Association, focused his discussion on financial regulation and innovation. He called banks to consider lending more to small and medium-scale enterprises, which play a key role both in Europe and Asia in creating jobs and driving growth.
Nandor von der Luehe, chairman of the Joint Foreign Chambers of Commerce in Thailand, urged Thai authorities to liberalise banking and insurance to create more competition by foreign players. He also would like Thai authorities to relax the rules on foreign ownership of Thai property.
Thaweelap Rittapirom, senior vice president of Bangkok Bank, said US consumption would soon recover and the depth of the US financial markets would help carry on the recovery.
Many Thai companies have also looked abroad for further business opportunities, he added.