Hanoi: Southeast Asian countries must coordinate in the face of currency turmoil that could undermine their economies, officials said on Thursday, as the region vowed action on a plan for political and economic union by 2015.
Leaders of 10 southeast Asian countries kicked off three days of talks and on Friday will be joined in Hanoi by colleagues from six Asian powers, including China, Japan and India, for a summit highlighting Asia’s role as the engine of global growth.
The region is once again attracting billions of dollars in capital inflows and its stock markets are among the world’s best performers this year.
US secretary of state Hillary Clinton joins the summit of 16 Asian countries on Saturday, underscoring a drive by the US administration to re-engage with Asia after a period of relative neglect amid unease about China’s new assertiveness.
Russian foreign minister Sergei Lavrov will also join the East Asia Summit on Saturday while UN Secretary-General Ban Ki-moon is also in the Vietnamese capital for meetings.
Tension between China and Japan over disputed islands will also likely be addressed in talks of some kind between Asia’s two largest economies, though a decision had yet to be made on a one-on-one meeting between leaders, a Chinese official said.
Differences over how to handle military-ruled Myanmar could bring discord among southeast Asian leaders even as they trumpet their vision of unity in the diverse region.
Global currency troubles are not officially on the agenda this week but the issue came up with southeast Asian economies fretting about the possibility of getting sandwiched in a currency war between China and the United States.
A main challenge is to manage robust capital inflows that have supported recovery from a short recession during the global crisis, but pose a risk by strengthening currencies and undermining export competitiveness.
Indonesian foreign minister Marty Natalegawa told reporters ASEAN had develop a common stand.
“We want to ensure that there are no inadvertent imbalances,” he said, referring to fears of competitive devaluations to protect exports.
Thai Prime Minister Abhisit Vejjajiva suggested to Philippine President Benigno Aquino that the region’s top finance officials meet more often to coordinate, Aquino’s spokesman said.
“Actions have been taken on an individual rather than a coordinated basis,” said the spokesman, Ricky Carandang.
“The concern right now is that, moving forward, if currencies like the baht and the peso continue to strengthen that those export figures might slow down.”
The Thai baht has gained 11.33% this year while the Philippine peso is up 7.18 %.
ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
Transforming the bloc of 580 million people into a political, economic and security community by 2015 will be easier said than done in a region with big differences in income and development levels, differing political systems and long-standing rivalries and territorial disputes. Political divisions over recalcitrant Myanmar and its 7 November election lurk.
Myanmar’s poor record on human rights damages ASEAN’s reputation and is an obstacle to cooperation with some of its international partners. The Philippines has condemned the Myanmar election, being held with pro-democracy leader Aung San Suu Kyi still in detention, as a “farce”.
But Myanmar raised the prospect of Suu Kyi’s release from house arrest next month, Indonesian minister Natalegawa said.
“It was our understanding that she would have served her sentence in November,” he told reporters.