PHUKET - Asian finance ministers meeting here agreed to boost by 50 percent a multi-billion dollar emergency fund to fight off the global downturn, officials said Sunday.
The proposal was agreed at a ministerial meeting of the Association of Southeast Asian Nations (ASEAN) and China, Japan and South Korea and will be finalized later this year, they said.
"The total size of the Multilateralized Chiang Mai Initiative will be increased from the initially agreed level of 80 billion dollars to 120 billion dollars," an official statement said.
The meeting was called to discuss ways of softening the impact of the economic crisis, with expanding the Chiang Mai Initiative foreign exchange pool -- an emergency credit line for ASEAN countries -- at the top of the agenda.
The statement said the move to expand the fund aimed "to ensure regional market stability and to foster confidence in the markets," and would be finalized at another meeting of finance officials this year in Bali, Indonesia.
The proposal will also likely be discussed at the annual ASEAN summit, which will be held from Friday in the Thai resort town of Hua Hin, although there is no time frame for when the expanded fund will be operational.
Ministers and officials from ASEAN's Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam met Sunday with Chinese and South Korean finance ministers and a top Japanese official.
ASEAN's 10 member states plus China, Japan and South Korea agreed after the 1997-98 Asian financial crisis to set up the Chiang Mai Initiative bilateral currency scheme to prevent a repeat of the turmoil.
The Asian nations now want to expand that agreement into a multilateral reserve pool, as the current economic climate threatens millions of jobs as well as recent robust growth in the developing economies.
A multi-nation scheme of currency swaps aims to make it easier for countries to borrow emergency funds.
The statement said the ASEAN members would contribute 20 percent of the pool with larger economies Thailand, Malaysia, Indonesia, Singapore and the Philippines giving a bigger share.
The remaining 80 percent will come from the big three Asia economies, and Chinese Finance Minster Xie Xuren told reporters that China, South Korea and Japan were still discussing how they would divide up the sum.
ASEAN Secretary General Surin Pitsuwan said earlier the regional fund would be used to help members "badly affected" as the downturn hits Asia's key trading partners in the United States and Europe.
"It is one of the mechanisms -- it is not to replace or compete with the IMF (International Monetary Fund), but it will be an alternative for Asian countries," Surin said on Thai television.
"If it materializes, it will be one of ASEAN's most tangible achievements."
Thai premier Abhisit Vejjajiva said earlier the fund would "serve as a cushion against future weaknesses at the time of the crisis."
Sunday's meeting also agreed to strengthen the region's monitoring and surveillance of the world economic climate, and stressed the importance of expanding bond markets in ASEAN.
"We believe that proactive and decisive policy actions are required in order to restore confidence, financial stability and promote a sustainable economic growth in the region," the statement said.