East Asians nations have decided to raise a fund of $80bn to protect their region from financial turmoil. This has been discussed by the ten members of the Association of Southeast Asian Nations (Asean)and is supported by South Korea, China and Japan. Those last three countries even contributed 80% of the capital.
The fund can be used by any participating country in times of emergency or to boost its liquidity. What’s in my opinion a very good idea to avoid recession and to preserve the confidence of people in the economy.
The political leaders are mostly concerned of the Western economies because they are very reliable of export to the west. There even is increasing evidence that leading countries are entering a recession. Chip maker Samsung for example announced a 44% fall in its third quarter profits.
Earlier Asian shares fell sharply with the Nikkei closing around 9.6% down.
With this fund at their disposal we can only hope that the inflicted damage would be as low as possible. Especially since the emerging economies don’t have the financial reserves Western countries have.
(Asean nations exists out of: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.)
http://news.bbc.co.uk/2/hi/business/7688406.stm
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