Asia Reacts Little to Weekend Summit

By ERIC TALMADGE / AP WRITER

TOKYO — Analysts, investors and media around Asia expressed concern Monday that a weekend summit of world leaders aimed at tackling the global financial crisis—and preventing future debacles—was high on symbolism but low on action.

While welcomed around Asia as a significant first step, the two-day summit in Washington, which brought together leaders from 21 nations and four international organizations, put off many hoped-for concrete goals until their next meeting, to be held in late April after US President George W Bush is gone and President-elect Barack Obama is in office.

Asian markets reacted little to the summit—major indices were mixed Monday—perhaps because investor expectations were low.

"To put it harshly, there is little point in trying to figure out ways to prevent a disease once a patient is sick," Credit Suisse Japan analyst Shinichi Ichikawa said in a report released Monday. "The just-concluded summit came up with no specific prescription to alleviate the effects of the most serious international financial crisis."

TJ Bond, a Merrill Lynch economist in Hong Kong, said some investors were disappointed there was no explicit announcement of coordinated fiscal stimulus measures. The leaders supported the benefits of enacting government spending plans to stimulate their economies but stopped short of a commitment for all to act at the same time, as some Europeans had favored.

Bond said the summit's failure to live up such expectations may underscore the difficulty in coordinating policy and the possibility that the global response may be nearing its limits.

Summit participants vowed to cooperate more closely, keep a sharper eye out for potential problems and give bigger roles to fast-rising nations, but left the fine print to be worked out at their next gathering in April.

The leaders did promise more access for developing countries to financing from the International Monetary Fund and other international organizations, but they gave no figures on the possible size of lending or other details.

Such financing could help governments in South Korea, India, Indonesia and other economies where investor anxiety about a possible scarcity of foreign currency has driven down exchange rates. South Korea's won has fallen by 33 percent against the U.S. dollar this year as investors pulled capital out of the country.

Japan, hoping to raise its profile as a world leader, offered a $100 billion IMF injection. But China gave no indication whether it might respond by heeding appeals to use some of its $2 trillion in reserves to help expand a global bailout fund.

Governments attending the summit tried to put a positive spin on its results.

China got a promise of a bigger role for developing countries in global finance. Beijing had been pushing for developing countries to have more influence at the IMF and other global bodies, and its foreign ministry called the summit an "important and positive" step toward "the reform of the international financial structure."

Australia said it was pleased that the meeting did not endorse a retreat to protectionism as a means of shielding countries' domestic economies from cheaper imports.

South Korean President Lee Myung-bak called the meeting a success, highlighting the unity among the diverse economies that participated.

"No country easily predicted that advanced and developing countries would arrive at an agreement through these talks," he told reporters in Washington, according to his office.

But the conservative Yomiuri, Japan's largest newspaper, said in an editorial Monday that while the summit was an important chance for the leaders to come together, they failed to address the impact the crisis had had on the role the US dollar plays in international markets, and its impact when it loses value.

"This will definitely be an issue in future discussions," it said.

Meanwhile, The Nikkei, a major business newspaper, said now—not April—is the time to act.

"There are two months left in the Bush administration," it said in an editorial. "In that period it is necessary to reassure markets with effective measures."