The Asian Development Bank will decide in its March 16 board meeting to establish a fund to alleviate the Asian currency crisis with the backing of the Japanese government, ADB Vice President Peter Sullivan said Wednesday.
In his speech at the Japan National Press Club, Sullivan said the fund will begin operations in April, providing crisis-hit countries with credit guarantees and interest payment support totaling some $3 billion.
The fund is part of a $30 billion aid package Finance Minister Kiichi Miyazawa announced in October. Dubbed the “Miyazawa Plan,” the proposals are intended to promote the early economic recovery of the Asian nations hit by the currency crisis, which started 20 months ago.
Sullivan said that some Asian nations appear to have passed through the worst stage of the economic crisis. “In Korea and Thailand, there is the prospect of a return to positive, albeit historically low, growth rates this year,” he said. “The Philippines, too, can reasonably expect to grow again this year.”
Sullivan added, however, that the economic recovery in Indonesia — most seriously hit by the crisis — will be slower than in other countries and that the Indonesian government will have to play a crucial role in rehabilitating the banking system.
Asia’s economic future will also depend heavily on China, Sullivan said. While the possibility of a financial panic stemming from China is unlikely, thanks to the nation’s robust economic growth and large foreign reserves, the most-populous nation will still have to speed up privatization and financial reform to maintain high growth rates, Sullivan said.