ASEAN should reverse stimulus measures

VIETNAM: Southeast Asian governments should prepare to wind down economic stimulus measures brought in during the global financial crisis, according to a draft summit statement seen by AFP on Wednesday.

In the document, the leaders of Association of Southeast Asian Nations (ASEAN) countries said they were confident the support measures could be phased out without damaging economic recovery.

"We affirm the need to start working on mechanisms to reverse the fiscal and monetary stimulus and then phase out these policy accommodations," said the statement, due to be issued on Friday at the end of a two-day ASEAN summit in Hanoi.

The draft gave no timescale for phasing out the measures, but the leaders say they were "fully confident that at the appropriate time we will be able to do so effectively to ensure sustained recovery and development."

ASEAN's export-dependent economies were battered by the financial crisis that began in the United States in late 2008 and lasted well into last year.

Like the rest of Asia, ASEAN governments rolled out massive economic stimulus packages and policies to boost domestic spending and eased credit lines to help the region emerge from the crisis better than expected.

The leaders' draft said that as market conditions improve and regional economies begin to recover, governments must reconsider support mechanisms. "We will maintain monetary and fiscal support while preparing for an orderly unwinding of expansionary policies until the recovery is on a firm footing," the draft said.

The statement also pledged to continue cooperation to restore the "health of financial systems" and to boost monitoring procedures in the hope of spotting future economic problems at an early stage. HANOI, Wednesday, AFP