Leaders in pledge to cast Apec safety line
Asia-Pacific Economic Co-operation forum leaders have pledged to mount a region-wide economic growth campaign, launching simultaneous stimulus measures across the Asia-Pacific to lift the region out of its slump.
They have also taken a significant step forward in deciding how to go about redesigning the 'global financial architecture', advocating a special new forum, involving both developed and emerging economies.
The leaders recommended a special forum be set up comprising all Group of 22 developing countries members plus some other Apec members. There had been concern only Group of Seven leading industrialised nations would be involved.
The joint declaration, read out by Malaysian Prime Minister Mahathir Mohamad, said: 'For the Apec economies most affected by the crisis, it is important to continue and accelerate structural reforms within a framework of prudent, growth-oriented macro-economic policies.' Emerging from two days of talks in Kuala Lumpur, Apec's 21 economic leaders also resolved to take measures to restore capital flows into the region, contain financial contagion and strengthen social safety nets.
A number of working groups will be set up to report back at next year's Apec summit in New Zealand. They will study investment banks and transparency and non-hedge funds to ensure sustainable capital flows. An international taskforce will be established in conjunction with the private sector to deal with debt problems and risk control.
The leaders also expressed a common need to strengthen social safety nets and the region's food distribution system.
Dr Mahathir described the summit as successful, but warned: 'Whether [the measures agreed] will be successful later on is something else that we have to see.' While conceding progress had been slow in Kuala Lumpur, Hong Kong's Chief Executive Tung Chee-hwa said the summit had taken a step in the right direction.
'We're not here for the immediate problems, we're here to make sure that what created problems for us doesn't happen again,' Mr Tung said.
'Problems are not created in a day. A solution cannot be found in a day either. It takes many.' Leaders expressed concern over currency speculators but stopped short of endorsing draconian foreign exchange controls - as adopted by their host nation.
The declaration also said the forum would embark on a review of credit rating agencies, which it claimed were partly responsible for the difficulties some Apec members had in raising capital.
Dr Mahathir dismissed claims the declaration lacked details on how the region's financial rescue would be achieved.
The communique noted several signs of improvement in the region's economies, particularly the stabilisation of currencies and interest rate declines.
The initial acceleration in inflation had been curbed following massive currency devaluation, and declines in output had moderated, it said.
This year, Apec celebrated its 10th anniversary shrouded in controversy and fears that the trade-oriented body was distracted from its core concerns and hijacked by political and diplomatic issues.
Trade ministers, whose talks preceded the leaders' summit, voted to refer Early Voluntary Sector Liberalisation to the World Trade Organisation after full agreement proved elusive.
The results of the week-long conference - involving heads of state, trade ministers and officials - received a lukewarm response from the business community, which criticised Apec's lack of progress.
But Dr Mahathir replied: 'The fact that we discussed matters relating to more openness in trade and the measures that we need to take . . . in order to be more attractive to foreign investors shows that the meeting . . . has yielded results.'
