Ministers Attend Meeting on Asia Crisis

MEDIA RELEASE

Released By:
Downer

I am pleased to announce that ministers and other senior representatives from Asian crisis-affected countries, donor countries and international institutions will meet in Sydney on 5 March to discuss developmental challenges facing the Asian region.

I have convened the meeting as a part of Australia's continuing contribution to addressing the persisting impacts of the Asia crisis.

The meeting will focus on the economic and social consequences of the crisis and approaches necessary to achieve longer-term recovery and sustainable development. In particular, it will: focus on priority measures to restore growth, encourage a high-level commitment to addressing economic and social impacts over the medium to longer term, and seek to enhance cooperation and coordination among donors and regional countries.

The meeting will be the first occasion on which ministers and other senior representatives from the region and the broader international community have met to discuss the wider economic impacts of the crisis and long-term strategies for recovery. It will help to maintain the momentum for greater cooperation and coordination, and is also a further demonstration of Australia's leadership in helping to galvanise an effective international response to the crisis.

Despite welcome signs of recovery, East Asia remains vulnerable to economic shocks and is still enduring major social dislocation, especially through increased unemployment and falling incomes. GNP per capita in the worst affected countries (Indonesia, Malaysia, Thailand, and the Philippines) has fallen by 10 per cent since 1997.

Key challenges for regional and partner countries are to restore strong and sustained economic growth and protect and reinforce investments in the social sector, including in basic health and education, welfare and poverty reduction.

The meeting will be attended by regional ministers and senior representatives from donor countries, the World Bank, the Asian Development Bank and the IMF (see list below).

Media contacts:

Innes Willox (Minister's Office): 02 6277 7500/ 0419 206 890

Keith Scott (AusAID): 02 6206 4624/ 0417 689 035

BACKGROUND

In the two decades before the crisis in East Asia, economic growth transformed the region. Some 370 million people have been lifted out of poverty since the mid '70s and many millions benefited from gains in life expectancy, declines in infant mortality and improvements in basic education and health.

Since the onset of the 1997 Asia financial crisis - which quickly became a broader economic and social crisis - many of the gains from years of growth in Asia have been set back.

The international community has
responded to the crisis with assistance from the International Monetary Fund and
the World Bank and increased flows of bilateral aid. However, almost two years
after the financial crisis first struck, its economic and social impacts are
persisting and have significantly changed the development outlook for the
region. It is to help address medium- to long-term development issues arising
from the crisis that the Minister for Foreign Affairs, Mr Downer, has convened a
Meeting on Development Cooperation: Responding to the Asia Crisis, to be held in
Sydney on 5 March. The meeting will be attended by ministers and other senior
representatives from crisis-affected countries, donor countries and
international institutions.

While the unfolding economic and social
impacts of the crisis are complex and heterogenous, it is clear that they have
had adverse and serious consequences for people throughout the region. The
impacts include rising unemployment, rising food prices, increased levels of
poverty, increased school drop outs and reduced access to health care as a
result of reductions in income and increased costs of medicines. Millions of
people in the region have suffered major declines in living standards.

A return to high and sustained economic
growth throughout the region is urgently needed, as is a continued commitment to
address the medium- and long-term social impacts of the crisis. Within this
framework of restoring growth, protecting social gains must remain a focus for
regional countries and donors. Meeting these challenges will require continuing
and strong cooperation. This in turn will require practical mechanisms to ensure
responses are based on sound information and are well coordinated.

The meeting in Sydney will focus on the
development challenges facing the region and what needs to be done to restore
growth. It will seek to deliver a high-level commitment to address economic and
social impacts over the medium to longer terms and to encourage coordination and
cooperation. Key issues to be discussed will include the current state of the
region, major developmental challenges, response priorities, and coordination.

Australia's initiative in convening the
meeting is a further demonstration of our key role in responding to financial,
economic and social impacts in East Asia and in helping to galvanise an
effective long-term response. Australia has been active in helping to address
the immediate impacts of the crisis and in contributing to the longer-term
process of recovery. The Government joined, in 1997, IMF-sponsored support
packages for Thailand, Indonesia and Korea and last year announced substantially
increased aid to Indonesia and Thailand. The Government also established an Asia
Crisis Fund to strengthen economic governance and financial sector reform in the
region and in November the Prime Minister, Mr Howard, announced a $50 million
initiative to help regional countries strengthen economic and financial
management.