Manila, July 2:

Asia may need to establish its own monetary fund if it is to cope with future financial shocks similar to that which rocked the region 10 years ago, a regional forum in Manila was told today.

An Asian Monetary Fund may be essential as the International Monetary Fund (IMF) was unable to adequately cope with the Asian crisis when it started in July, 1997, the forum hosted by the Asian Development Bank (ADB) was told. “The IMF failed to make precise reforms while the US was ill-positioned to take swift acti-on,” when the crisis broke said Duck-Koo Chung, former South Korean commerce minister said.

“Instead of waiting for a fire department across the world to act the region needs a voluntary, community fire brigade,” he said warning that “a sense of complacency may bring about another crisis.” Chung said the 1997 crisis, first triggered by a rapid withdrawal of foreign funds from Thailand, had been the worst crisis faced by his country since the Korean war in the 1950s.

Dorodjatun Kuntjoro Jakti, former minister of economic affairs in Indonesia, said the IMF conditions imposed to get Indonesia out of the crisis “created continuous tensions within the body pol-itic of Indonesia,” contri-buting to collapse of Suh-arto regime and leading to years of political turmoil.

Former Philippine finance secretary Roberto de Ocampo said that when Asian nations first proposed an Asian Monetary Fund (AMF) to deal with the crisis, this was immediately shot down by ‘the wise men’ from other states. He said “the Asian financial crisis ended soo-ner than everyone expected,” and linked this to increased inter-Asian trade that many states resorted to, after crisis broke out.

“The time has come for Asia to figure out, in their own way, what to do with their financial resources,” de Ocampo said. “Further Asian financial integration is the best antidote for Asi-an future financial crise-s.” He said that Asia had a huge surplus of savings which was invested mostly in US-dollar denominated instruments.

The IMF was “a debtors monetary organisation and we need a creditors’ monetary organisation.”