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Alexander Downer

Minister for Foreign Affairs

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32nd ASEAN 
Post-Ministerial Conference - Plenary (10 + 10) Session

Opening 
Statement by the Hon Alexander Downer MP, Minister for Foreign Affairs, 
to the 32nd ASEAN Post-Ministerial Conference Plenary Sess  ion

Singapore, 27 July 1999

(Check Against Delivery)

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Introduction

It is a pleasure to be here in Singapore to participate 
in the 32nd ASEAN Post-Ministerial Conference. It is an annual event 
that I look forward to. The outlook for the region definitely appears 
brighter than it was last year, indeed even six months ago.

Australia has long believed that its future is tied 
up with Asia and has committed itself to a long-term, mutually beneficial 
relationship with the region. The past two years have been a testing 
time for East Asia and indeed the world, as the Asian economic crisis 
spread first to Latin America and then other parts of the globe. Every 
country has been affected to some extent. Still, Australia never lost 
its optimism about the region's future, or about its ability to bounce 
back.

In these past two years, Australia has proved it 
is no fair-weather friend to the region. We were there to help our neighbours 
when it counted, when they needed us most. Australia was one of only 
two countries to participate in the IMF second tier support arrangements 
for Indonesia, Thailand and Korea. We were concerned enough to persuade 
the IMF to amend the conditions of its rescue package for Indonesia 
to more sensitively address the real needs of that country. Australia 
has provided other programs to help regional countries meet the challenges 
caused by the crisis.

Australia has been happy to offer assistance and 
information to our neighbours on the means to combat problems associated 
with the economic crisis, and on implementing economic reforms. Our 
advice has carried weight for two reasons: because it comes from a country 
that has been doing well when others have been doing it tough, and because 
we have shown that we are prepared to take our own advice. For all these 
reasons, it is all the more heartening to see the emergence of signs 
that the worst of the East Asian economic crisis may be over.

It has not been an easy task for our neighbours, 
and there were times when it appeared too hard - especially as the social 
costs of the crisis mounted. There is still a long way to travel before 
we can confidently say that we've seen a resumption of sustained economic 
growth in East Asia, and there are still many potential risks. But the 
fact is that the reforms are starting to take root. There are growing 
signs of confidence: confidence in regional economies, and confidence 
in the systems of Asia, in their ability to overcome the crisis and 
emerge stronger. For Australia's part, I would like to reassure our 
neighbours that we remain firmly committed to working with you as you 
pull out of the depths of the crisis, we are committed to continuing 
to provide assistance in dealing with the other effects of the economic 
crisis.

Regional Political and Economic 
Issues

The worst of the contraction, caused by the economic 
and financial crisis, appears to have passed. Most economies in the 
region are forecast to experience positive growth in 1999. Rising stock 
markets and exchange rates, improved external positions and lower inflation 
and interest rates are evidence of a recovery. Growth forecasts for 
most of the economies of East Asia are being revised upwards.

Still, the economic future is uncertain. The continuing 
strength of the economic recovery will depend on the growth of import 
demand in East Asia's foreign markets. Growth in the United States is 
expected to slow this year and recovery in Japan is not guaranteed. 
Low growth in the European Union is affecting world growth. We must 
also be alert to, and vigorously resist, the rising protectionist tendencies 
in all markets. If we resile from open and outward looking trade and 
foreign investment regimes, we may stifle the turnaround in East Asia. 
We therefore cannot afford to become complacent - there is still much 
to do to ensure the nascent recoveries take root firmly and develop 
into a new period of sustainable growth.

The Australian economy has 
shown remarkable resilience to the financial crisis. Our economy is 
among the fastest growing in the world. Interest, unemployment and inflation 
rates are at their lowest for years. This has been achieved in the middle 
of the wor  st East Asian economic crisis for half a century, 
through the pursuit of a thorough program of economic and labour market 
reform.

We can never underestimate the challenges facing 
the region. East Asian governments must push ahead with reforms to the 
banking system and financial sector, including eliminating non-performing 
loans, recapitalisation of cash-strapped institutions and an easing 
of the credit crunch. Corporate restructuring should be pursued with 
vigour. Public and corporate governance and the transparency of economic 
transactions need to improve. Only by continuing with the economic reforms 
begun over the past two years can sustained economic growth be locked 
in for the region. Any backsliding could possibly see a return to recession 
and increased social tensions.

The Hanoi Plan of Action, ASEAN's response to the 
issues affecting the region, is an ambitious range of initiatives to 
hasten economic recovery and address the social impact of the economic 
crisis. The Statement on Bold Measures is especially welcome in that 
it seeks to accelerate the ASEAN Free Trade Agreement (AFTA) by one 
year, and to increase the number of tariffs at zero. In the face of 
the crisis, it reaffirms ASEAN's commitment to regional economic integration. 
Australia encourages ASEAN members to fully implement commitments made 
under AFTA on a most favoured nation basis. Australia also welcomes 
the decision by ASEAN to enhance the investment climate for foreign 
investors. The Hanoi Plan of Action shows ASEAN is open for business 
and sends a strong signal to the international financial community about 
the region's commitment to liberalisation.

The economic crisis has placed enormous pressure 
on the social safety nets in the region as increased demand overwhelmed 
the systems. While the East Asian economies may be on the road to recovery, 
the social impact of the crisis will be felt for some time. ASEAN has 
demonstrated its commitment to address the social impact of the economic 
crisis, when it implemented its action plan on social safety nets as 
part of the Hanoi Plan of Action. Australia applauds such efforts to 
reinforce and protect social investment and welfare mechanisms. Nevertheless, 
the international community must continue to provide support for social 
investment and human capital. Australia is pleased to be able to fund 
two proposals under the ASEAN Plan of Action on Social Safety Nets. 
These projects will focus on developing the capacity for social impact 
assessments to assist program design and increase the effectiveness 
of social safety nets through the application of best practices in design 
and operation.

The region has weathered the worst of the crisis 
and has seen its institutions grow. Cambodia's inclusion in ASEAN on 
30 April completed the reintegration of Cambodia into the regional community 
and realised the vision of an ASEAN 10. This is a welcome development, 
which also poses challenges to ASEAN. I am sure however, that, as it 
has done in the past, ASEAN will be able to meet these new challenges 
and turn them to advantages.

International Political and Economic 
Issues

The haze from forest fires continues to have serious 
environmental and economic effects on the region. The haze is estimated 
to have cost over US$1 billion in reduced economic activities such as 
tourism, air flights and in direct health costs over the past two years. 
Australia welcomes the recent ASEAN Environment Minister's agreement 
on an Immediate Action Plan to combat haze in Indonesia and the development 
of a legal framework to assist in the implementation of the Regional 
Haze Action Plan. The Indonesian government's new laws against open 
burning show how determined ASEAN is to combat this issue. Australia 
is assisting countries in the region through cooperative training in 
land clearance and forest and fire management.

The economic crisis has impacted 
on those least able to look after themselves - such as women and children 
- and makes them easy targets for unscrupulous people. Australia has 
a strong commitment to combat trafficking in women and children for 
forced labou  r or sexual slavery and is involved in a number of 
international initiatives in this area. The Australian government has 
taken the lead on combating this abhorrent practice by developing specific 
legislation to address trafficking in persons for the purposes of sexual 
slavery. We strongly encourage other governments to enact similar laws. 
Australia is also working cooperatively in the region to strengthen 
communication and cooperation between law enforcement authorities in 
order to combat people trafficking, and narcotic drug trafficking. Money 
laundering continues to be a serious problem, with the proceeds from 
narcotics production being integrated into the financial systems of 
the region. Playing its part in endeavours to combat this activity, 
Australia has provided $1 million to the Asia/Pacific Group on Money 
Laundering, as part of the "Tough on Drugs" strategy. In addition, 
Australia recently provided $1 million to the United Nations Drug Control 
Program to reduce drug demand and develop alternative activities in 
the Mekong sub-region states.

Conclusion

In conclusion, let me say the Year 2000 (Y2K) problem 
presents an unprecedented challenge to our region. It has the potential 
to impair the delivery of key services such as transportation, communications, 
power, water and sewerage, health facilities, emergency services and 
banking and finance. The dimensions of the Y2K problem and its cross-border 
impacts have reinforced the importance of regional cooperation in meeting 
this challenge.

Australia welcomes the increasing attention that 
governments and major business enterprises in our region are directing 
to sharing information and expertise on tackling Y2K. Australia has 
been pleased to cooperate with regional governments in international 
forums including the United Nations, APEC, the International Atomic 
Energy Agency, and the Second Global Summit on Y2K in Manila in March 
1999. Australia is working with Papua New Guinea and the Pacific Island 
Countries on Y2K programs in critical areas such as telecommunications, 
utilities, aviation, health, accounting and revenue collection. We are 
also assisting with other regional partners in the aviation, telecommunications 
and power sectors.

The challenge for us all for the remainder of 1999 
is to intensify our cooperative efforts on contingency planning; to 
promote greater transparency including by encouraging international 
sectoral groups such as the International Civil Aviation Organization, 
the International Telecommunications Union, and the International Maritime 
Organization to provide information on the Y2K preparedness of key sectors 
internationally and to disseminate information on contingency planning 
by those sectoral groups; and to continue to cooperate on appropriate 
mechanisms for early advice to our communities on the actual impact 
of international Y2K issues as they occur during the Y2K critical period.

ENDS

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