Asean finance ministers worry over investors fallout

Southeast Asian finance ministers meeting in Makati City expressed concern yesterday over the economic fallout from the deadly Jakarta hotel blast, and called for a firmer stance against terrorism.

Indonesian Finance Minister Boediono canceled his Manila trip to help President Megawati Sukarnoputri’s Cabinet work on a response plan to Tuesday’s attack, Association of Southeast Asian Nations (ASEAN) secretary general Ong Keng Yong said.

The JW Marriott Hotel blast left 14 people dead and 152 others wounded, the Red Cross said.

"Although ASEAN economies did quite well in 2002, we feel that the sentiment in 2003 will depend heavily on investor confidence. So terrorist attacks like the one in Jakarta undermine investor confidence," Ong told reporters after the ministers’ morning session.

"Every time we think that things are turning positive, something unfortunate like this takes place. Unfortunately, the bombing really throws a spanner into the works."

He said the officials are now concerned "that external investors will now raise questions whether they should put their money or substantial commitments to the region."

The blast came two days before a court was due to hand down the first verdict in the trials of alleged Jemaah Islamiyah militants accused of last year’s Bali attack that left 202 people dead, mostly foreign tourists.

"We believe that if all the ASEAN governments respond in a decisive way," they can "help to stabilize the confidence level," Ong said.

US-ASEAN Business Council president Ernest Bower said the Jakarta bombing was "very sad and unfortunate" but businesses had to accept that terrorism was a global concern and not unique to Southeast Asia.

"I hate to say this: we are all going to live in a bit of a different world where vigilance and concerns about security are part of our everyday lives," he told reporters after leading a group of American business leaders to a meeting with ASEAN finance ministers.

"This is the new world we are living in and businesses have to adapt to this new world," he said.

President Arroyo, in her opening remarks at the meeting, also said the region must learn to live with terrorism threats.

"Vigilance must become a way of life for the region, even as we maintain normalcy in the course of work and business," Mrs. Arroyo added.

ASEAN secretary general Ong said the failed July 27 military mutiny in the Philippines had also dampened investor confidence.

The ministers are meeting a block away from a high-end serviced apartment complex in the Makati financial district that was occupied for more than 20 hours by rogue soldiers.

"What is in the minds of the ministers is that all these little things add up to the unease among the foreign investors and businessmen," Ong said.

"To the people in America or in Europe, whether it is the Philippines, Indonesia, Thailand, Malaysia, or Singapore, it is Southeast Asia and so they all shy away from the region."

Brunei, Cambodia, Laos, Myanmar and Vietnam are the other members of ASEAN.

"What we need to do is to take measures and stay united and take firm actions so that we can convince investors to stay with us," Ong said.

Philippine Finance Secretary Jose Isidro Camacho said the two-day Manila meeting will assess ASEAN’s efforts to block the funding of terrorist activities through legal and other measures.

"We would probably update each other on efforts and steps already taken to address the concern," Camacho said, while noting that the establishment of the Asian Bond Market would be the primary agenda.

According to Camacho, while the Indonesian incident was tragic, it would not change the roadmap for financial development and cooperation in the region.

"This incident doesn’t change the urgency of (addressing terrorist financing). It’s always been an urgent concern," he said.

Camacho admitted there was a need for a concerted effort to curb global terrorism and the funding for such activities that are, by nature, not border-specific.

"It is important that we have a concerted response. Having said that (while) these acts of terrorism are monetary setbacks, we cannot paralyze ourselves in fear. We have to continue working towards fundamental economic concerns," he said.

The ministers are also expected to lay the groundwork for a financial system that will fuel a single ASEAN market, similar to the European Community, by 2020, officials said.

The ministers will meet their counterparts from China, Japan and South Korea on Thursday, during which they are expected to approve a "ASEAN plus three" fund for financial cooperation. — AFP, Des Ferriols