In his speech at the opening ceremony of the region’s annual summit, Thai Prime Minister Abhisit Vejjajiva expressed hope the meeting would be a stepping stone for regional measures to combat the economic slump but did not announce anything concrete.
“We will be severely tested from now on, both as a group and as a part of the broader Asian region,” he said. “As the financial crisis deepens, the world will look towards our region for action and for confidence.”
Leaders and top officials from the 10-member Association of Southeast Asian Nations are gathered in the Thai resort town of Cha-Am, 120 miles (200 kilometers) south of the capital Bangkok, for their 14th annual summit. Thailand is the current holder of ASEAN’s rotating chairmanship in the diverse region of more than 500 million people and GDP of $1.2 trillion.
The meeting, usually dominated by human rights issues, is overshadowed this year by the worst global economic downturn in decades, which has already dragged the export-dependent region’s most advanced economy -Singapore -into recession.
Thailand’s economy shrank in the fourth quarter and others like Malaysia and Indonesia are facing rapidly slowing growth as exports crumble.
The region is at the mercy of global economic winds, particularly from the U.S., a major export market for Southeast Asian countries.
Singapore’s leader has warned the global economic slump may last several more years if the U.S. doesn’t fix its creaking banking system, a newspaper reported Saturday.
The city-state’s Prime Minister Lee Hsien Loong told the Bangkok Post in a pre-summit interview that the U.S. -the world’s largest economy -will be in recession for at least the rest of the year and could continue to stumble after that.
“So you could easily be in for several years of quite slow growth worldwide. And I think it’s best that we prepare for that, and prepare our people,” said Lee, son of Lee Kuan Yew, the city-state’s leader from 1959 to 1990.
The major economic announcement of the summit has been the signing of a free trade pact between New Zealand, Australia and ASEAN. The deal could add $48 billion to the GDP of the 12 nations by 2020 but is unlikely to ease the economic pain brought on by the global downturn.
Thailand’s Abhisit said he hoped the summit and a meeting last week of finance ministers from ASEAN nations, China, South Korea and Japan would “serve as a stepping stone for a series of regional initiatives ... to help address the impact of the financial crisis in the region.”
The finance ministers meeting agreed in principle to expand a proposed emergency currency fund to $120 billion from $80 billion -and make the funds easier to access in times of crisis -but final agreement wasn’t expected at the ASEAN summit. China, Japan and Korea would provide 80 percent of the funds.
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