THE International Movement for a Just World calls upon the Malaysian government to initiate a meeting of the finance ministers of Asean-plus-3 (China, Japan and South Korea) to examine the impact of the global financial crisis on the region and to propose concrete measures to protect people from the ravages of the crisis.

Leaders in the region have expressed deep concern as stock markets in Tokyo, Seoul, Shanghai, Hong Kong, Singapore, Jakarta, Bangkok and Kuala Lumpur continue to plummet.

The United States's US$700 billion (RM2.5 trillion) bailout package does not seem to have stemmed the crisis.

The danger of the US economy going into a tailspin and dragging along the rest of the world is real.

It is important to bear in mind that Japan and China have invested heavily in US Treasury bonds and bills. Japan holds US$590 billion in US Treasury instruments, while China holds US$510 billion. This is due largely to their huge trade surplus with the US.
Indeed, if the US fails to recover quickly from its credit crunch, it is predicted that its economy will go into a deep and long recession, which will have disastrous consequences for exports from Asian countries. This will impact adversely on our growth rates and the poorer and more vulnerable sections of our society will suffer a great deal.

This is why the Asean-plus-3 economies, many of which have extensive trade ties with the US, will have to come up with both short- and long-term strategies to cushion us against the consequences of a prolonged US recession.

Becoming less dependent on the US economy and encouraging more trade and investment within the Asean-plus-3 region is one of the important strategies that should be pursued.

It is true that this trend has been getting stronger in the last 10 years. However, much more can be done to generate endogenous growth within the region, especially through greater emphasis on scientific research in agricultural and industrial development.

Collaborative efforts in these areas could be one of the foci of the proposed Asean-plus-3 finance ministers meeting. The meeting could also explore ways and means of maintaining exchange rate stability, curtailing short-term debts, curbing inflation, ensuring prudent budgets and reinforcing effective banking systems in the face of the global financial crisis.

Since these were some of the concerns of the Chiang Mai Initiative (CMI) of May 2000, Asean-plus-3 finance ministers may want to give serious attention to strengthening the CMI as we address the challenges of a volatile global economic environment.