By DPA,
Bali : Asian nations Sunday agreed on the make-up of a $120-billion regional liquidity fund designed to counter the global economic crisis.
Finance ministers from the 10-member Association of South-East Asian Nations (ASEAN), Japan, China and South Korea approved the key components of the scheme, including individual country contributions, Indonesian Finance Minister Mulyani Indrawati said.
Japan and China each committed $38.4 billion, or 32 percent, to the fund, while South Korea would provide $19.2 billion, the ministers said in a statement.
The reminder would come from the 10 ASEAN member countries.
Four of ASEAN’s richest members – Malaysia, Singapore, Indonesia and Thailand – would each contribute four percent, or $4.7 billion, to the regional fund, dubbed the Chiang Mai Initiative.
The Philippines committed to 3.1 percent while Vietnam would contribute slightly lower than one percent. The other members of ASEAN are Brunei, Laos, Myanmar and Cambodia.
“This is very good news,” ASEAN Secretary General Surin Pitsuwan told DPA.
“The region will have a major financial facility supplementary to the major international funding institution, the International Monetary Fund (IMF), which is responsible for that kind of thing,” Surin said.
He said the package was expected to be implemented before the end of the year, when a formal agreement has been signed.
The finance ministers’ meeting was held on the sidelines of the Asian Development Bank’s annual meeting in the Indonesian resort island of Bali.
Earlier in the day, Japanese Finance Minister Kauru Yosano said his country would establish an additional emergency fund of up to $60 billion in the event of an Asian financial crisis.
Japan also would provide guarantees up to 500 billion yen ($5 billion) on yen-denominated bonds issued in Japanese markets by developing countries unable to raise funds through bond issuance due to market turmoil, he said.
The Asian Development Bank (ADB) has warned that the crisis would keep more than 60 million people in developing Asia trapped in poverty this year and nearly 100 million more in 2010.
The International Labour Organisation estimated that 20 million workers would lose their jobs in Asia.
The ADB itself plans to set up a $3-billion fund to provide emergency loans to crisis-hit member countries faster and more cheaply than under the bank’s existing programmes.
The fund would help increase total loan disbursements by the bank by $10 billion to $32 billion over the next two years, the bank’s president, Haruhiko Kuroda, said.