Cambodia hosts int'l meeting on global economic crisis

PHNOM PENH, Oct. 8 (Xinhua) -- Cambodia hosts a three-day meeting on Thursday in Cambodia's northern province of Siem Reap, focusing on global economic crisis.

A statement released by Cambodian Center for Study and Development in Agriculture (CEDAC) said the annual forum's theme for this year is "Overcoming the Global Financial and Economic Crisis: The Rule of Law as the Key to Economic Freedom," which is devoted to the topic of dealing with the global economic crisis.

"We need to understand them to see which reforms are needed. We also need to guard against those who use the crisis as a pretext for furthering their own illiberal agendas," the statement said.

"We will try to explore how to bridge the gap between people's clamor for action and protection against the effects of the crisis can be reconciled to sober economic analysis. Otherwise we risk wasting huge amounts of resources for little effect, resources that will go to the politically powerful rather than the poor and needy," it added.

The conference is a platform for the exchange of useful information, practical techniques and networking tailored to the needs of think tanks, industry, academics and policymakers.

Since 1998, it has become the Economic Freedom Network Asia conference's custom to utilize various forms of comprehensive and interactive programs.

In addition to keynote presentations and panel discussions, this year's conference will employ the Open Space Technology (OST). OST is a facilitation method which allows participants to identify specific issues, self-select into discussion groups and work on issues with individuals of similar interests.

Keynote speakers include Keat Chhon, deputy prime minister and minister of economy and finance of the Kingdom of Cambodia, and Professor Lawrence H. White from George Mason University.

The conference is sponsored and supported by Economic Freedom Network Asia and Friedrich Naumann Foundation for Liberty and in collaboration with the Cambodia Institute of Development Study and the Citizen Action Net for Social Development.

Donors air next year’s aid agenda

Wednesday, 30 September 2009
Sebastian Strangio and Vong Sokheng
The Phnom Penh Post

LAND rights, judicial reform and the global economic crisis are to be among the key challenges for Cambodia in 2010, according to foreign donors, who have expressed cautious optimism about the government’s progress in key areas.

Speaking at the Government-Development Partner Coordination Committee (GDCC) meeting held in Phnom Penh on Tuesday, senior officials and diplomats discussed the country’s progress on the series of Joint Monitoring Indicators (JMIs) that are linked to annual donations of foreign aid.

“This meeting of the GDCC is taking place at a particularly critical juncture, as we are seeing more clearly the impacts from the global economic downturn and the slowdown in Cambodia’s economic growth,” World Bank Country Manager Qimiao Fan said in a statement released following the meeting.

German Ambassador Frank Markus Mann hailed “very positive results” in the land sector but said a spate of recent land disputes represented an “urgent” challenge to poverty reduction and equitable economic development.

Similarly, Australian Ambassador Margaret Adamson praised recent actions on judicial reform, including the government’s plan to send the long-awaited anticorruption law to the National Assembly “in the coming weeks”, but expressed concerns about the recent crackdown on government critics.

The meeting came ahead of December’s annual Cambodia Development Cooperation Forum, at which foreign nations are set to announce their aid donations for 2010, but critics have long questioned the utility of such meetings.

In a February report, international group Global Witness argued that despite promises of reform dating back to 2001, the government has failed to deliver, noting the continued lack of an anticorruption law.

Sam Rainsy Party spokesman Yim Sovann said donors, who pledged nearly US$1 billion in aid in 2009, had the power to pressure the government on key issues, but that past experience was not encouraging.

“If they continue to do what they’ve done in past years, there will be no improvements,” he said.

Chith Sam Ath, executive director of the NGO Forum, who attended the meeting, said it was positive that the issues were being raised but that the government’s commitment would be tested in between the government-donor forums.

“There need to be further discussions between NGOs and development partners,” he said. “NGOs welcome” further discussions and dialogue.

Office rentals down 25pc as demand falls, supply rises

The SSN office building on Norodom Boulevard enjoyed high rentals in recent years. (Photo by: TRACEY SHELTON)

Wednesday, 20 May 2009
Written by Soeun Say
The Phnom Penh Post

25% Fall in office rentals
Average office rentals in Phnom Penh have dropped around 25 percent from the first half of 2008 due in part to the global economic crisis, according to National Valuers Association of Cambodia figures.

Figures from Valuers association show that commercial space is becoming cheaper, eroding rapid rental increases during Cambodia's boom years.

Average rentals for office space in Phnom Penh were down around 25 percent in the first quarter compared to a year earlier, according with estimates from the National Valuers Association of Cambodia.

Figures first released late last month at a conference in Vietnam show that office space in the capital was fetching $12 per square metre per month on average over the first three months of 2008, down from $16 per square metre over the first half of 2008.

Rentals began falling in the middle of last year after the global economic downturn kicked in, dropping to an average of $14 per square metre, the figures showed.

"Because of the impact of the global financial crisis, rentals for office space has dropped," association President Sung Bonna said.

"Now there is not much demand, but we have a big supply of office space and commercial property for rent."

Asking rentals for top office space had dropped from between $30 and $35 a square metre to between $25 and $28, he added.

The downturn comes after years of soaring rentals in the capital due to rapid economic growth amid a shortage of suitable office space.

According to the valuers association's figures, average rentals were just $6 per square metre in 2006 and $10 in 2007.

Less chasing more
Vutha Oum, director of Angkor Khmer Real Estate agreed that rentals for office space and commercial property had decreased, blaming a downturn in demand and an increase in overall supply.

At least six new office buildings had come on the market over the last couple of months, he said, and further decreases in rent were likely.

He said landlords were reducing rentals to attract clients. "Some owners of office buildings have tried to offer discounts of up to 50 percent but they are still finding it hard to get clients," Vutha Oum said.

Sear Chilin, director of Visal Real Estate, said it was unlikely that all available office space would be taken because Cambodia's business environment was "unstable".

Chun Keng, general manager of a new building on Monireth Boulevard in Stung Meanchey district, said he had been unable to fill his three-month-old building despite reducing rents between 40 and 50 percent to $5.50 per square metre.

"I haven't got clients even though I have discounted prices between 40 and 50 percent," he said.

Mony Sokha, managing director of an office building on Sihanouk Boulevard in Boeung Raing district, said discounts had helped him attract some tenants.

Economic crisis disastrous for world's poor [... but not in Cambodia, according to Dr Hun Xen]

March 10, 2009
ABC Radio Australia

The global financial crisis is fast becoming a disaster for the world's poor.

The World Bank has released a dire forecast for the international economy, saying it will shrink for the first time since World War two. It says falling trade will hit the East Asia region the hardest, with developing countries facing possible catastrophe. It means more poverty and hardship with governments likely to be starved of money. But there are a few glimmers sunshine in the gloom.

Presenter: Karon Snowdon
Speakers: Richard Martin, Managing Director of IMA-Asia; Ashok Sharma, the Asia Development Bank

Click here to listen to the audio program (Windows Media)

SNOWDON: The latest World Bank report is grim reading. The global economy will shrink for the first time since World War Two and trade will experience its biggest fall in eight decades. The greatest losses will be in East Asia. As if to highlight the speed of the turnaround - Japan the world's number two economy also just recorded its first current account deficit in 13 years. At almost two billion dollars in the red it's a massive fall from the 18 billion dollar surplus for the same period last year.

Richard Martin, Managing Director of IMA-Asia agrees the world faces recession.

MARTIN: We're expecting a contraction for the whole global economy of around one to two per cent this year. Most of that is going to occur in the northern hemisphere, but it will not miss Asia. Asia is still going to do better but the financial crisis we saw last year in the northern hemisphere becomes Asia's manufacturing crisis this year. And it'll certainly pull growth down in the region.

SNOWDON: The World Bank says developing countries, previously on the sidelines, could be facing crisis, especially where poverty is already high.

The most concern is for the poor in Africa but Asia is not immune. This latest report comes on top of one in February saying 53 million more people could be trapped in poverty as a result of the global slowdown. The examples are mounting...more than half a million jobs were lost in India in the last three months of 2008. Cambodia has lost 30,000 jobs in the garment industry, its only significant export.

The Bank says governments of developing countries could face the additional problem of not being able to raise money and experience a funding gap of between 300 and 700 billion US dollars as export income disappears. It says they'll face a credit squeeze as rich nations suck up scarce finance.

Ashok Sharma from the Asia Development Bank told Stephen Long some government bonds - that's the way governments raise money - will have no buyers.

SHARMA: In fact even in Germany which has about the most liquid bond market two bond issues of ten years have failed in the market so you can imagine what will happen to emerging countries.

SNOWDON: Richard Martin from IMA-Asia says Eastern Europe is in real trouble but the picture is more mixed in Asia.

MARTIN: The big picture is right now we have a US government rapidly ramping up its deficit and pushing up public debt towards 70 per cent of GDP. By contrast the picture across in Asia is we have China with relatively low levels of public debt 24-25 per cent of GDP and plenty of scope to fund its deficit out of its domestic market. And that's what makes people confident China will pull off quite a big fiscal stimulus this year. Elsewhere it's a bit patchy in the region. Most of Asia if we exclude Japan has done an excellent job of reducing public debt in the eleven years since we had the Asian crisis. So a lot of Asia or a fair amount of Asia is in a position to apply a fiscal stimulus now. And in that favourable group you'd put the two city states of Singapore and Hong Kong, Korea, Taiwan would fit in there, Australia and New Zealand will fit in there. Now the countries not in a position to do it are Vietnam, India, Philippines and Indonesia, though those last two seem to be getting through ok on their fiscal management.

Sacrava's Political Cartoon: Dr Hun's Dream

Cartoon by Sacrava (on the web at http://sacrava.blogspot.com)

Click here to read the related article

Port traffic down by as much as 30% this year [...but it's can't be due to economic downturn, Dr. Hun Xen said Cambodia is immune to economic crisis]

A freight ship docks at the Phnom Penh Port awaiting a consignment of cargo in this file photo. A global slowdown in trade has hit heavily Cambodia’s two main shipping terminals. (Photo: Bloomberg)

Thursday, 05 March 2009
Written by May Kunmakara and George Mcleod
The Phnom Penh Post

30% drop in throughput at Phnom Penh Port
Cambodia's second largest container port has been affected more heavily than Sihanoukville by the global economic crisis during the first two months of this year

Global downturn hits trade, with flagging construction imports accounting for the bulk of the losses since January

CARGO shipments at Cambodia's second-largest port have declined sharply in the first two months of the year as global trade slows, say port authorities, adding that hundreds of jobs have also been axed in the downturn.

The Phnom Penh International Autonomous Sea Port reports a 30 percent drop in throughput, largely due to falling imports of construction materials, officials told the Post Wednesday.

"The decline is caused by the global financial storm that started to hit at the end of last year. This affected not only our ports, but also others in the region," said Hei Bavy, director general of the Phnom Penh port.

He said that about 90 percent of goods crossing through the docks are construction materials. With many of the country's construction projects stopping or on hold, the port says shipments are in free fall.

"Developers are suspending their imports because they face the credit crunch," he said, adding that staff had been cut from 700 to 400.

"I do plan to cut more staff, but I have reduced salaries to prevent more layoffs," Hei Bavy said.

He added that the company is also instituting across-the-board cost cuts to prevent further job losses.

"This affected not only our ports, but also others in the region"

Port traffic is falling globally, with Asia bearing the brunt of the international trade slowdown. Singapore, the world's largest container port, said container traffic was down 20 percent, and Shanghai, the world's second biggest, down 19 percent, according to Bloomberg.

Cambodia's ports are reporting similar troubles, with officials blaming not only a slowdown in the construction sector, but flagging overseas garment sales as well.

The Finance Ministry in February reported a two-percent drop in garment exports at the beginning of the year.

Lou Kim Chhun, director general of Sihanoukville International Autonomous Port, told the Post Wednesday that he is waiting on figures for February, but that container shipments were down 20 percent due to the economic slowdown.

"The crisis has impacted our port revenue, which will hurt the government's tariff and tax income," Lou Kim Chhun earlier told Rasmey Kampuchea.

Hei Bavy said that the export of agricultural goods have been one bright spot for the Phnom Penh Port.

"Agricultural exports have been stable, but I expect the crisis to affect us for a long time," he said, adding that Cambodians should rely more on domestically produced goods.

"If our people stop using imported products, it will support local businesses. The crisis could drain our national wealth if people keep buying foreign goods."

Asean to Back Stimulus Measures [... but CPP Cheam Yeap said there was no need for economic stimulus in Cambodia, was he shooting in his foot?]

MARCH 1, 2009
By DAVID ROMAN

HUA HIN, Thailand -- The Association of Southeast Asian Nations, or Asean, Sunday said it will support economic stimulus measures and reject protectionist moves during the global economic crisis.

In a joint statement delivered at the close of the 14th Asean summit here, the heads of government of the 10 member countries said economic measures must promote sustainable growth in a region where the top economic powerhouses are highly dependent on exports to developed countries, such as Japan and the U.S., now deep into recession.

No specific policy actions were announced during the summit, where the focus of interest was on human rights and illegal immigration issues. This followed recent disputes among Asean members on the treatment of seaborne migrants along the eastern half of the Indian Ocean.

As planned, Asean leaders during the summit signed an ambitious free-trade agreement negotiated last year with Australia and New Zealand. This is the most comprehensive trade pact ever completed by the 41-year old regional grouping, and a harbinger for a joint Asean FTA deal now being discussed with the European Union.

In a related meeting the previous weekend, Asean finance ministers had agreed to increase the size of the so-called Chiang Mai Initiative -- a pool of bilateral currency swaps for emergencies -- to $120 billion from $80 billion, and turn the pool into a multilateral swap system, possibly with easier access to the funds.

However, that move remains largely symbolic as three non-Asean countries -- China, Japan and South Korea, accounting for 80% of the extra funding for the pool -- have yet to agree on their respective contribution, and the pool has been very sparsely used since it was launched in 2000.

Asean leaders inked other minor deals at the end of the summit, including the general outline of an internal regional mechanism to address a potential lack of oil products in any member, and stressed that the region must cooperate more to surmount the current economic crisis.

Abhisit Vejjajiva, prime minister of host country Thailand, said Saturday that the regional grouping -- including several export-oriented countries -- faces negative short-term economic prospects.

In its closing statement, Asean called for a "bold and urgent reform of the international financial system" to take into consideration "the interests and voices of the emerging and developing economies."

Besides Thailand, Asean comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore and Vietnam.

Write to David Roman at david.roman@dowjones.com

Cambodia asks U.S. to help boost its tourism sector [-Gasp! Thong Khon contradicts Hun Sen and claims Cambodia face global financial crisis?]

PHNOM PENH, March 1 (Xinhua) -- Cambodia has asked U.S. to provide some help to boost its tourism sector, one of the kingdom's pillar industries, Chinese-language newspaper the Jian Hua Daily said on Sunday.

Tourism Minister Thong Khon made this request while meeting with U.S. Ambassador Carol Rodley here earlier this week, said the paper.

Cambodia expects U.S. to help Cambodia establish a training school of vocational skills and promote its eco-tourism, especially in face of the global financial crisis, said the minister.

Rodley expressed her support of the idea, saying that she will relay the message to the U.S. government in order to help Cambodia develop its human resources in the tourism sector and push forward its eco-tourism.

Cambodia received around 2 million foreign tourist arrivals in 2008, a 5.5 percent rise over 2007, but slightly lower than the government's expectation, according to official figures.

Hyundai to delay parts plant, open showroom

Friday, 27 February 2009
Written by Nguon Sovan and George Mcleod
The Phnom Penh Post

The announcement follows official visit from Hyundai boss to gain support for new factory

South Korea's Hyundai Motors said it is delaying construction of a parts assembly plant in Cambodia after the company's vice chairman, Choi Han Young, met Prime Minister Hun Sen and National Assembly President Heng Samrin to drum up support for the venture.

Jason Sun, director of Star Motors (Cambodia) - the authorised local Hyundai distributor - said that the plans would have to be delayed because of the global financial crisis, which has seen automobile demand nosedive around the world, including in Cambodia.

However, he said Hyundai still planned to go ahead with a new Hyundai showroom in Phnom Penh to increase the company's presence.

"Cambodia is a small market, but the standard of living is rising, and there is lots of potential," he said.

The showroom, located on Russian Boulevard, has already been built and will be launched "in a few weeks", Sun added.

Choi met Hun Sen on Tuesday and Heng Samrin Wednesday, and an application for the parts assembly plant is currently being considered by the authorities.

"We have submitted our investment proposal to the council for the development in Cambodia already, but there is no approval yet," said Sun, declining to reveal the investment cost, the location and when construction will begin.

"I received the investment proposal for [Hyundai's assembly plant]," Sok Chenda, secretary general for the Council for the Development of Cambodia, said Thursday. He declined to reveal the details of the proposal.

Tough market

Around 300 Hyundai vehicles are currently sold each year in Cambodia, but the company is entering a tough market, with all car companies reporting weak sales on the economic slowdown.

Kong Nuon, president of TTHK Co Ltd, Cambodia's only Toyota distributor, forecast that auto sales would drop 40 percent within the next two years due to the economic crisis and the real estate downturn.

He added that 2,800 new cars were typically sold in Cambodia each year, and about 20,000 secondhand automobiles changed hands. Sales of new cars were shared between around six automobile importers: Toyota, Ford, Mitsubishi, Nissan, Mercedes and Ssangyong, he said.

In a related development, the local partner in a joint venture Yamaha motorcycle manufacturing facility in Phnom Penh told the Post Monday that construction had also been delayed as a result of the global economic crisis.

Kong Nuon, who is also president of Kong Nuon Import & Export, added that planned capacity had been scaled back between 30 and 40 percent from 30,000 motorcycles in the first year.

Globally, Hyundai has fared better than other car companies. Bloomberg reported the Seoul-based company saw US sales jump 14 percent from a year earlier in January, while industry-wide sales fell 37 percent.

Typhoon or big bright sun: the economic forecast on Cambodia goes wild

Kralanh (Siem Reap, Cambodia). 28/08/ 2008: Storm or no storm: can statistical projections prove as reliable as weather forecasts... (Photo: John Vink/ Magnum)

24-02-2009
By Laurent Le Gouanvic
Ka-set

Short, poor, ill and corrupt, or, in other words, the new potential composite of the average Cambodian person elaborated on the basis of statistical figures circulated here and there by various international and national organisations intervening in Cambodia. However, despite the profusion of reports, charts, tables and databases supposed to dissect the Cambodian economy and society, finding recent and reliable elements in the jungle of numbers that these statistics made in Cambodia represent remains a hard task. Alarmist views regarding the economic crisis do not help either since they provide indices which take different shapes and prove randomly malleable. And indeed, predictions for 2009 might well make one feel giddy, as they bet on an economic growth rate oscillating between 1% and... 6%, according to sources. Even though analyses disagree on the results concerning the past few years, forecasting Cambodian economy looks like a tough challenge.

Click to Read More...

ASEAN+3 to cushion financial meltdown

Mon, 02/23/2009
Rendi A. Witular
THE JAKARTA POST
PHUKET, THAILAND

Finance ministers of Southeast Asian nations, as well as Japan, China and South Korea, agreed Sunday on steps to prevent the region falling into financial meltdown.

In its joint statement after a meeting in the Thai resort island of Phuket, the ASEAN+3 countries agreed to prepare the precautionary measures by expanding their cooperation fund to US$120 billion from $84 billion worth of foreign exchange reserves under the Chiang Mai Initiative framework signed in 2000.

Japan, China and South Korea will supply 80 percent of the fund, and ASEAN members the remaining 20 percent. Details on the contribution of each countries are still undecided.

“The immediate effect of the agreement is that there will be a positive signal to the financial market in which we reassure them that we have sufficient backup and ammunition to face possible financial turmoil,” said Indonesian Finance Minister Sri Mulyani Indrawati.

She added that ASEAN+3 had noted that while Asian economies were in a better position to face challenges, due to the structural reforms undertaken since the Asian financial crisis, it recognized the regional economy was now facing great challenges.

“The current severe economic downturn of the global economy, coupled with heightened risk aversion in financial markets, has adversely affected the region,” Mulyani said.

ASEAN+3 includes the 10 member states of ASEAN — the Philippines, Indonesia, Thailand, Malaysia, Singapore, Brunei, Vietnam, Myanmar, Cambodia and Laos — and the three East Asian nations of Japan, China and South Korea.

The group has a total population of 2 billion people, a combined GDP of $9.09 billion, and foreign reserves of $3.6 trillion. Effectively, ASEAN+3 represents one-third of the world’s population, 16 percent of the world’s GDP, and holds more than half of the world’s reserves.

As the first concrete joint action in Asia to cope with the global economic downturn, the foreign exchange reserve pool is accessible to members in a swap mechanism to boost their foreign exchange reserves and to address short-term liquidity problems.

Members in dire need of the foreign exchange reserve fund, however, will be subject to an independent surveillance mechanism by other members.

A surveillance by member countries is preferred because most of the ASEAN+3 nations have suffered a traumatic experience from tapping financial support from the International Monetary Fund (IMF), which is regularly tied with seemingly unfavorable and ineffective terms and condition.

After the surveillance mechanism takes full effect in its function, members can use more of the fund without having to worry about being put under IMF supervision.

Under existing rules, members withdrawing the fund by more than 20 percent of their real need are required to have IMF supervision.

ASEAN+3 is still working on expanding the 20 percent tolerance level to enable members to get more funds but still remain under the surveillance of other members.

The group will also speed up measures to better manage the region's bond market by accelerating the completion of the Asian Bond Markets Initiative (ABMI) road map.

Asian finance ministers to broaden regional liquidity fund

22 Feb 2009
IANS (India)

PHUKET: Finance ministers from Japan, China, South Korea and across South East Asia agreed on Sunday to broaden and increase a regional liquidity fund, in the wake of the global financial crisis.

The three, plus the ten members of the Association of South East Asian Nations (ASEAN) penned an agreement at a summit in Phuket, Thailand, to "multilateralise" the Chiang Mai Initiative (CMI) fund, and to increase it to $120 billion.

Until now the CMI has taken the form of multiple bilateral agreements on currency swapping.

Meeting at Thailand's premier vacation island, 550 km south of Bangkok, the finance ministers also agreed to beef up the regional surveillance mechanism for the CMI, by setting up an independent regional watchdog in conjunction with the International Monetary Fund.

How long it will take to implement the multilateralisation is not clear.

Thai Finance Minister Korn Chatinkavanij, who co-chaired the Phuket meeting with his South Korean counterpart Jeung Hyun Yoon, pointed out after the meeting that the various countries have differing approval processes.

"But we expect the approval schedules to be discussed in the next meeting in Bali (in May)," he added.

Until the surveillance mechanism is in place and all countries have approved the multilateralisation, the current bilateral system will remain in place.

It was also agreed at the meeting that the ASEAN countries - Thailand, the Philippines, Singapore, Malaysia, Vietnam, Myanmar, Laos, Cambodia, Indonesia and Brunei - will put up 20 percent of the $120 billion fund, with the remaining 80 percent being contributed by China, Japan and South Korea.

The country-by-country breakdown has not yet been finalised, said China's Finance Minister Xuren Xie said.

"We have a good idea of the splits, both among the ASEAN countries and among the plus-3 countries," Korn noted.

When asked whether the absence of the new Japanese Finance Minister, after the recent resignation of his predecessor in an alleged drunkenness scandal, had had any effect on the talks, Korn said, "As far as we were concerned, the Japanese government was represented," he replied. "There was no negative impact whatsoever."

The ministers also made a strong plea for Western countries not to increase protectionist trade barriers in a bid to shield their domestic industries, and to stabilise their own economies and financial markets.

"Free and fair trade must be maintained," Korn said, not only within Asia but globally.

He also called for the development in Asia of "relevant policies for the development of domestic economies in order to counter the effects of reductions in exports."

The ministers, in their joint statement at the end of the conference, noted the importance of the Asian Bond Markets Initiative (ABMI) and hinted at relaxation of international currency regulations: "We recognise the important role of the private sector in the development of bond markets, particularly in cross-border bond transactions and settlement issues. We will explore ideas for new arrangements that would provide development assistance to the region while addressing unexpected liquidity constraints."

Finally, the ministers called for "an immediate and substantial capital increase" for the Asian Development Bank, calling for agreement on this before the next annual meeting of the ADB, in three months' time.

Asian finance ministers meet on economic crisis

Sunday, February 22, 2009

PHUKET, Thailand (AFP) — Finance ministers and top officials from Southeast Asia, China, Japan and South Korea met here on Sunday to discuss how the region can soften the blow from the global financial crisis.

Topping the agenda is a proposed multi-billion-dollar credit line to help Association of Southeast Asian Nations (ASEAN) countries cope with the crisis, which members want to see expanded from 80 to 120 billion dollars.

"The meeting will send a very strong signal to the world that we are committed to alleviating the global economic slowdown," Thai Finance Minister Korn Chatikavanij said at the meeting on the southern resort isle of Phuket.

"Finance ministers in all countries need to work to find the base and most effective solutions and measures to tackle and underlie uncertainty."

Ministers and officials from ASEAN's Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam are meeting with Chinese and South Korean finance ministers and a top Japanese official.

ASEAN Secretary General Surin Pitsuwan said the long-discussed regional fund would be used to help members "badly affected" as the global economic downturn hits Asia's key trading partners in the United States and Europe.

"It is one of the mechanisms -- it is not to replace or compete with the IMF (International Monetary Fund), but it will be an alternative for Asian countries," Surin said on Thai television.

"If it materialises, it will be one of ASEAN's most tangible achievements."

ASEAN members plus China, Japan and South Korea agreed after the 1997-98 Asian financial crisis to set up a bilateral currency swap scheme known as the Chiang Mai Initiative to prevent a repeat of the turmoil.

Asian nations now want to expand that agreement into a multilateral fund pool to help member nations as the current economic climate threatens millions of jobs as well as the recent robust growth in Asia's developing economies.

Asian nations had previously discussed an 80-billion-dollar emergency pool, but last year mooted expanding that figure to 120 billion dollars.

"Unfortunately our region is currently facing enormous challenges including global economic slowdown and ... financial turbulence," said South Korean Finance Minister Yoon Jeung-Hyun.

"The environment calls for stronger cooperation among the ASEAN countries ... I believe the Chiang Mai Initiative and its multilateralisation is a prime example of such regional collaboration efforts."

As the morning session came to a close, Surin told reporters that the meeting was "good and positive," and said all ministers agreed in principle to expand the fund.

He said ASEAN members would equally contribute to make up 20 percent of the pool, with the remaining 80 percent coming from the big three Asia economies.

"This idea will be submitted to the ASEAN summit in Hua Hin next week," Surin said.

Sunday's meeting comes ahead of ASEAN's annual summit starting on February 27, which current chair Thailand will host at the seaside resort town.