India sceptical about 'Asian fund' move

By P. S. Suryanarayana

CHANG MAI (THAILAND), MAY 6. India today responded to the move for the creation of an `Asian Monetary Fund' with great circumspection, with the Union Finance Minister, Mr. Yashwant Sinha, saying it ``cannot be child's play'' to conceive and fashion such a new organisation.

Answering questions from TheHindu here on the initiative by some select countries in East Asia to transform the Asian Development Bank into a regional monetary fund or even set it up as a window of the ADB itself, Mr. Sinha said, ``if the idea is that the problems on the capital account in Asian countries should be met by some such arrangement, this calls for very serious discussions'' among all the members of the institution.

Without, however, rejecting the idea altogether, Mr. Sinha, here to attend the ADB's 33rd annual meeting of Board of Governors, said ``we have our own ideas on the subject.'' Asked whether India would, in principle, accept a regional monetary fund, he said: ``No. This is an issue where the principle is as important as the detail. We can't just divorce the details from the principle and say we are agreeable in principle subject to details being worked out. Because, the devil is in the detail.''

Noting that India had not been sounded out on this idea which ``needs to be approached very carefully,'' Mr. Sinha said, ``there have probably been discussions among a few countries.'' But, ``we have not been part of the discussions.''

In his view, ``the ADB cannot be a forum for or a party to sub- regional matters. If anything has to be considered for the ADB, then the entire membership of the ADB has to be involved in this, at the right time, in the right spirit.'' India ``would not like to be surprised by a decision which some countries might make at the some point of time and confront the rest of the membership of the ADB with that decision.''

He identified the issues at stake as follows: ``What is the role which is envisaged for the IMF in crisis management? What is the role which is envisaged for regional banks such as the ADB? (The question is) whether the character of the bank should change completely and (where it) should, from a development bank, become a lender of the last resort? What will be the relationship between the ADB and the IMF? These are issues which have to be very carefully considered in today's complex global financial system.''

Mr. Sinha said similar considerations would weigh with India in regard to a parallel suggestion by or on behalf of some countries that an Asian regional pool be created for some form of currency- swap arrangement in favour of those in need of contingency help to tackle domestic financial crises.

The Japanese Finance Minister, Mr. Miyazawa, said in the evening here today that the formation of a regional monetary fund was not discussed at a formal meeting between the Association of South East Asian Nations (ASEAN) and Japan besides China as also South Korea. Some U.S. delegates said behind the scenes that an Asian monetary fund would merit consideration only if the specifics about its perceived need and operational parameters were spelt. Mr. Sinha also indicated that India's keenness to forge closer ties with the ASEAN should be seen in the larger context of Asia being able to speak in one voice. On the question of India being able to join the forum of ASEAN Plus Three (namely, China, Japan and South Korea), he said the ``utility'' of any such arrangement would depend on an ``equal and mutual desire.''

Mr. Sinha said there were no plans for any meeting here between him and Pakistan's chief delegate to the ADB meetings now.

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Section  : International
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