With a view to tackle the on-going global financial crisis, thirteen Asian countries have decided to create a 120 billion US dollar emergency fund. The decision was taken during the Asian Development Bank (ADB) annual meeting in Bali. The crisis fund aims to support international banks at this crucial phase of global economic downturn. China and Japan will contribute $38 billion each in the new emergency fund. The newly proposed emergency fund is expected to be launched by the end of 2009. Apart from it, a surveillance unit to monitor Asia's economies will also be established with the help of the ADB and the ASEAN Secretariat.

 

The emergency fund has been planned out to restrict the kind of situation that prevailed during Asian financial crisis of 1997/98. The fund will offer emergency balance of payments support to any country hit by crisis. As per the estimates of ADB, Asia's economies are likely to grow just 3.4 percent in 2009 which is a very slow growth rate. According to ADB Managing Director General Rajat Nag, the fund will make the countries of the region self-reliant. He stated that 1997/98 debacle has taught a lesson to the Asian countries and the recent move will help them to fight the menace without taking help from others.

 

While announcing the plan to form the crisis fund, the finance ministers of the 13 Asian countries said that it imperative that efforts should be made to enhance confidence, maintain financial stability and prevent further decline in economic growth in this current global situation. The joint statement claimed that trade and investment in region have been badly hit by deepening global economic downturn. Apart from China and Japan, South Korea will contribute 16 percent of the total fund while the rest will come from the 10-member Association of South East Asian Nations (ASEAN).