Leaders of Southeast Asia Announce a Recovery Plan

Southeast Asian leaders Wednesday unveiled what they called a “bold” plan to reinvigorate economies that have been pounded into recession after two decades of stunning growth.

Although the “Hanoi Action Plan,” announced at the conclusion of a two-day summit, contained little that was likely to provoke a reaction from investors or markets, it was reassuring to Western economists because the 34-point declaration emphasized that recovery is dependent on continued free-market policies.

The Assn. of Southeast Asian Nations, or ASEAN, reaffirmed the need to accelerate economic reforms, particularly in the banking sector; open markets; attract foreign investment; and liberalize trade--all steps advocated by the International Monetary Fund.

“The important thing is that this is the first time since the crisis started . . . that ASEAN has spoken in one language and signaled to the world its commitment to pursue reforms,” said Jean-Pierre Verbiest, Hanoi representative of the Asian Development Bank.

“It doesn’t mean every country is going to pursue reforms in the same way, but the fact that the region could reach consensus on this shows they fully realize how deep the crisis is,” he said.

Leaders of ASEAN, representing nine countries populated by 500 million people, also called for increased financial assistance from the developed world. Japan reacted to the plea Wednesday by announcing in Hanoi that it will provide low-interest loan packages totaling $5 billion to Southeast Asia.

And in Washington, in a move diplomats said was timed to send a message of support to the Southeast Asian nations, the IMF announced it had approved a further $957-million payment for Indonesia and $140 million for Thailand, the first two countries struck by the Asian meltdown that began with the devaluation of the Thai baht in July 1997.

As the lender of last resort to troubled Asian economies, the IMF has put together rescue packages worth $47 billion for Indonesia and $17 billion for Thailand. An additional $61 billion has been provided to South Korea. Other international donors have funneled billions of dollars more into the region.

ASEAN also reaffirmed its commitment to education, eradicating poverty, developing agriculture sectors and strengthening its information technology--but, to the disappointment of some, made no mention of human rights.

Several countries, most notably Myanmar, formerly Burma, Indonesia and Malaysia, have recently come under attack for human rights abuses. Human rights is a sensitive subject in a region where--with the exception of Thailand and the Philippines--economic progress and society’s well-being are generally considered more important than individual rights.

In a reference to China’s increased military activities in the Spratly Islands, a chain in the South China Sea that is claimed in whole or in part by China, Taiwan and four ASEAN member states, ASEAN called on all countries to exercise restraint and refrain from actions that are inimical to the peace, security and stability of the Asia-Pacific region.

ASEAN, formed in 1967, groups Vietnam, Laos, Thailand, Brunei, Myanmar, Singapore, Indonesia, Malaysia and the Philippines.

Cambodia is expected to be granted membership in a few weeks, ASEAN leaders said.