MANILA - EFFORTS to tackle future financial crises in East Asia should be spearheaded by a regional response, said economic chiefs past and present from some of the countries hardest hit by the meltdown that erupted a decade ago yesterday.
In a pointed criticism of the Western-dominated global lenders led by the International Monetary Fund (IMF), the Thai Finance Minister called for Asia to play a greater role in the international financial system and set up its own monetary fund.
'Looking ahead, we need to take responsibility,' said Dr Chalongphob Sussangkarn. 'Asia needs to come together and discuss how we want to shape the financial system.
'We cannot let debtor nations manage the global financial system. The IMF is more like a debtor monetary organisation.'
East Asia's central banks have some US$3 trillion (S$4.6 trillion) in foreign exchange reserves - much of it invested in US government debt - giving the region enormous clout on the global financial markets.
Serving and former officials from the five countries most affected by the crisis - South Korea, Thailand, Malaysia, Indonesia and the Philippines - told a conference hosted by the Asian Development Bank (ADB) here that the region had rebounded, though there was no room for complacency.
The crisis erupted on July 2, 1997, with the collapse of the Thai baht, and spread rapidly across the region as other overvalued currencies came under attack. Three countries - South Korea, Thailand and Indonesia - needed multibillion-dollar loan bailouts from the Washington-based IMF.
On that rescue, South Korea's former commerce and industry minister Chung Duck Koo said: 'The big city fire department was located far away, and what we needed was a community fire brigade to minimise the danger.'
Critics of the IMF's loan terms - a regimen of austerity measures involving government expenditure cuts and the closure of rickety financial institutions - said they came at too high a social cost.
A proposal in 1997 by Japan to create an East Asian monetary fund was 'shot down' - as one speaker termed it - by Washington.
But the region's financial muscle, pumped up by surging inflows of foreign capital, and lingering resentment over the IMF's handling of the 1997-98 crisis has revived the fund plan as part of wider measures to deepen financial cooperation in the region.
'Perhaps the time has come for Asia to figure out what to do with its financial resources,' said former Philippine finance secretary Roberto de Ocampo.
A regional monetary organisation - like the six-decade-old IMF - would act as lender of last resort to governments in a financial fix.
But the discussion has not yet reached the stage where policymakers are considering where such an institution would be headquartered.
Since the crisis, East Asian governments have set up various regional financial safety nets such as currency-swap pacts between central banks and early-warning surveillance to detect fault lines appearing in financial systems.
ADB president Haruhiko Kuroda noted with approval that a decade after the crisis, countries across the region continued with reforms to strengthen their economies.
This, despite a string of external shocks over the years, including the dot.com bust in the US, volatile oil prices and international terrorism.
'It is clear that regional approaches are vital to keep Asia's economies strong in the face of threats,' he said.
Malaysian central bank governor Zeti Akhtar Aziz cited numerous factors that have bolstered the region's ability to withstand future shocks, including an 'ingrained aptitude to persevere and resolve challenges'.
