Special Report: Global Financial Crisis

    PHUKET, Thailand, Feb. 21 (Xinhua) -- A multilateral fund of 120 billion U.S. dollars is expected to help the ASEAN plus China, Japan, South Korea tackle possible foreign capital flow shortage in the future, Thai Finance Minister said Saturday in Thailand's southern resort island Phuket.

    Top financial officials from the 13 countries will discuss further on a management mechanism and terms of borrowing to bring the fund into operation during Sunday's Special ASEAN + 3 Finance Ministers' Meeting here, said Thailand 's Finance Minister Korn Chatikavanij.

    The idea of setting up a common foreign reserve pool, with each participating country injecting a sum of foreign capital to help each other in a scenario of financial crisis, was agreed among the finance ministers of ASEAN countries plus China, Japan and South Korea last May.

    The move will upgrade the current bilateral currency swap arrangement, known as the Chiang Mai Initiative (CMI), initiated after the 1997 Asian financial crisis, into a multilateral system.

    Initially the size of this reserve pool was set at 80 billion U.S. dollars, but later proposed to add to 120 billion dollars, with 80 percent of the fund contributed by China, Japan and South Korea and the remaining 20 percent by ASEAN countries.

    The exact size of the fund, quota for each participating country for the money injection and details of a management mechanism were among issues to be discussed during Sunday's meeting.

    Proposals and agreements concerning the reserve pool from this Phuket meeting will be forwarded for further discussion during next ASEAN+3 finance ministers' meeting in May in Bali, Indonesia.

    No legal signing will take place during Sunday's meeting, added Korn.

    The Special ASEAN + 3 Finance Ministers' Meeting will be the first time for the region since the global economy was hit by a new crisis, said Suparut Kawatkul, Permanent Secretary of Thailand's Finance Ministry.

    The ASEAN plus three countries are currently the strongest economies in the world (in face of a gloomy global economic picture) and movements among these countries will have great impact on developments in the other parts of the world, Suparut said.

    Meanwhile, the Asian Development Bank (ADB) will also participate in this meeting to provide economic analysis and proposals to tackle the current economic downturn, said Suparut.