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 25 Feb 2009

Asean Summit:
Concerns mount over global crisis impact

Southeast Asian leaders hold their annual summit in Thailand this weekend, worried that the worst global financial crisis in decades will derail their export-driven economies and throw people out of work.

The leaders will implement a landmark charter containing a roadmap for turning the Association of South East Asian Nations (Asean) into an EU-style bloc by 2015 -- and keeping their economies on a growth trajectory.

Asean leaders are expected to sign a free trade agreement with Australia and New Zealand and make a stand against "creeping protectionism" in the teetering global economy.

The diverse 10-nation grouping, whose governments range from Brunei's absolute monarchy and Myanmar's junta to the young democracies of Indonesia and the Philippines, will also try to agree on the contours of a human rights body.

Thailand, which holds the Asean chair this year, was forced to postpone the summit scheduled for December in Bangkok and move it to the royal seaside resort of Hua Hin due to the political turmoil that has afflicted the country for nearly four years.

With several countries in the region on the brink of recession and some facing elections, Asean leaders only have to look to host Thailand to see how an economic downturn can combine with political unrest to unseat their governments.

"They are concerned about the immediate pressure on the economy from the global downturn that was underscored in yesterday's report on Thailand that the 4th quarter had the steepest quarterly drop on record," said David Cohen, an analyst with Action Economics, a financial research firm in Singapore.

"That showed how much they have been affected by the collapse in global export demand."

The 6.1 percent contraction partly reflected the protracted political unrest that culminated in anti-government protesters shutting down Bangkok airport -- and air cargo trade -- for part of November and December.

Thai Prime Minister Abhisit Vejjajiva, who came to power in December on the back of those protests, is pitching the summit as a means to boost investor confidence in Thailand and the region.

"What I hope the Asean countries would do at our meeting ... is to send a powerful message to the rest of the world that despite the global financial crisis, we will not be tempted to resort to any kind of protectionism," Abhisit told reporters at Asean 's headquarters in Jakarta last week.

"We do detect a creeping protectionism in various countries and regions," he added.

The region of 570 million people with a combined GDP of $1 trillion instead will try to keep the focus on how their new rules-based bloc will integrate regional economies, open up markets and create more jobs.

That will be highlighted when the leaders sign an agreement creating an Asean -Australia-New Zealand Free Trade area, which will take effect a year from now, Thai officials said.

The group has also sought to mitigate risks by pooling currency resources with China, Japan and South Korea to prevent a repeat of the panic runs on currencies and banks in the 1997-98 "Asian Contagion" financial crisis.

But the absence of regional powers from the annual Asean extravaganza at the beach resort has taken some of the wind out of the sails of a group with world-class ambitions.

Asean 's summit with the three East Asian powers along with India, Australia and New Zealand has been put off until at least April because of scheduling conflicts arising from the December postponement.

Philippine diplomats described the weekend summit as "very low-key" and that it is being held "just to get it over with."

Asean was formed in 1967 as an anti-communist bulwark at the height of the Vietnam War when it was feared countries in the region would fall like dominoes to the communist bloc. With a legacy of military dictators and authoritarian rulers, the region has had a spotty human rights record over the years.

The grouping hopes to change that image by adopting a human rights body as part of its charter, though critics doubt members such as Myanmar would allow it to have much teeth.

Asean leaders were expected to talk about the "terms of reference" for that body -- particularly penalties for offending members -- and when the body would come into being.




 

 

 

 

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