Southeast Asian leaders were expected to endorse easier monetary policies and make a stand against protectionism on Sunday as they conclude a summit overshadowed by the worst financial crisis in decades.
The 10 leaders of the Association of Southeast Asian Nations went into talks at an oceanfront hotel in Hua Hin that will likely yield a statement on how the ASEAN community will confront a financial crisis hurting their export-dependent economies, an ASEAN official said.
They will also issue a separate declaration summing up the work of the summit and the ministerial meetings that preceded it.
A draft of that declaration obtained by Reuters shows the leaders vowing to work with the Group of 20 on reforming international financial institutions and to coordinate macroeconomic policies.
We agreed that counter-cyclical and more coordinated macroeconomic policies are the best response to this global financial crisis, it said.
Some governments have already implemented fiscal stimulus packages to boost domestic demand and accommodative monetary policy that enable the banking sector to continue their function.
The leaders were committed to resist any protectionist measures which would further dampen global trade and slow down the economic recovery and urged an early conclusion to the Doha round of world trade talks.
We will be severely tested from now on, both as a group and as a part of the broader Asia region, Thai Prime Minister Abhisit Vejjajiva said at the start of the summit on Saturday.
ASEAN has begun, with this summit, to begin implementing a roadmap that will turn what used to be a consensus-based group long derided as a talk-shop into a single community of 570 million people with a combined GDP of $2 trillion in six years.
The summit, whose theme this year was ASEAN Charter for ASEAN Peoples held a dialogue with civil society groups, which will now become a regular feature of these meetings.
But it got off to a wobbly start when Cambodia and Myanmar refused to recognize the groups representing their countries.
Activist groups on the sidelines of the meeting said the incident showed ASEAN members were still succumbing to its tradition of non-interference in each other's affairs and taking decisions by consensus instead of sticking to its rules.
Abhisit told reporters afterward: We must take gradual steps and encourage wider participation. This is something new. This is the first time and we will continue to make more progress.
The draft declaration says the leaders have broadly agreed on the terms of reference for a much-debated human rights body and will make it operational by the end of this year.
But the global financial crisis and the looming specter of unemployment in a region where poverty is still entrenched have overshadowed Myanmar and human rights, issues that have often take the spotlight at these meetings.
Singapore's prime minister, Lee Hsien Loong, said at the start of the meetings the world could be in for several more years of slow growth unless the banking system was fixed.
The biggest outcome of the meetings so far was the signing of Free Trade Agreement between ASAEAN, New Zealand and Australia that could eventually add $48 billion to economies in the region.
ASEAN officials have argued against protectionism but have defended their own buy-local campaigns, saying they conform with trade rules and are similar to the Buy American clause that was inserted into the $787 billion U.S. stimulus package.
ASEAN comprises Indonesia, Thailand, Singapore, Malaysia, Myanmar, Vietnam, Cambodia, Laos, Brunei and the Philippines.
(Editing by Jerry Norton)