Ten years after some Asian countries were hit by a twin currency and banking crisis marked by massive outflow of "hard currencies," they are faced with the challenge of how to tap its huge foreign reserves via financial cooperative mechanisms, said experts at a symposium held Monday in Manila on the 10th anniversary of the Asian financial crisis.
The symposium, hosted by the Asian Development Bank (ADB), drew such distinguished figures as Thai finance minister and governor of the Malaysian central bank, and attained a consensus that Asia has recovered from the crisis a decade ago and should seek a better quality development from now on by investing more in infrastructures, education and poverty-alleviation.
Ifza Ali, ADB chief economist, said in an ADB publication entitled "Beyond the Crisis" which was distributed at the symposium that Asia's once vulnerable external payments position has been erased and replaced by a staggering volume of reserves, totally 2.3 trillion U.S. dollars by the end of 2006.
How to use these huge reserves becomes one of the major challenges faced by Asian countries, which still lack regional capital and bond markets which are mature like those in Europe and the United States, according to officials and experts attending the symposium.
Zeti Akhtar Aziz, governor of the Bank Negara Malaysia or the Malaysian central bank, said Asian countries must set up a mechanism to make the best use of their savings into productive activities. She said this can be realized through strengthening regional financial cooperation which can also reinforce framework of crisis-management and resolution management.
Aziz said a regional financial cooperation to tap the foreign reserves will serve as "synergy partnership" or "concentration of energy" for the development of all countries in Asia.
Duck-Koo Chung, former South Korean minister of commerce, industry and energy, described as a good sign that ASEAN ( Association of Southeast Asian Nations) countries and China, Japan and South Korean have already begun the early state cooperation in the financial sector. He said Asia needs a new regional financial architecture now to avoid another crisis in future.
Roberto de Ocampo, former secretary of finance of the Philippines, said while Asia is the fastest growing region in the world, it also has the largest number of poor people. So how to reduce poverty through financial means and investment remains a major challenge for Asian countries.
He said large capital inflows being experienced by Asian countries now should be regarded as an opportunity for the poor to improve their livelihood instead of mere handout programs. He called for better mobilization of Asia's own capital resources to focus on building infrastructures, which he said is key for the improving social environment and reducing poverty.