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Rough APEC Summit Wraps Up

Pacific Rim nations approved a modest set of proposals Wednesday to counter the region's worst economic crisis in decades, endorsing IMF austerity measures and rejecting tighter currency controls advocated by host Malaysia.

But the two-day APEC summit was clouded by a diplomatic furor set off by Vice President Al Gore, and by a disagreement between the United States and Japan that forced the group to delay a landmark free-trade agreement.

Leaders of the 21-member Asia-Pacific Economic Cooperation forum said the hard-hit countries of Indonesia, South Korea, and Thailand should continue adopting painful International Monetary Fund reforms.

"We are resolved to work together to support an early and sustained recovery in the region to contain risk and contagion, and prevent the possibility of a global recession," the summit's final statement said.

APEC leaders also called for more financial assistance from the international community, and endorsed a U.S. proposal to speed emergency loans to Asian countries at the center of the crisis.

The statement was read by Malaysian Prime Minister Mahathir Mohamad at the close of the two-day summit. Some leaders stood by mopping their faces with handkerchiefs in the sun and stifling heat.

Eariler in the summit, Gore announced an agreement with Japan on a joint approach to the financial crisis, including a $10 billion support package designed to help struggling Asian nations.

Half the money will come from the United States and the other half from Japan, the World Bank, and the Asian Development Bank.

The assistance, though small compared with the magnitude of the region's debt burdens, should help assure nervous financial markets that the world's two largest economies have stopped bickering over how to approach the crisis.

Gore's open endorsement of Malaysian dissident Anwar Ibrahim's "reformasi" (reform) movement triggered widespread condemnation among members of Mahathir's governing coalition and perplexed opposition leaders who said the U.S. move could backfire in Malaysia by undercutting the campaign.

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Click here for a list of the Malaysian government's criminal charges against Anwar Ibrahim.
Once the heir apparent to Mahathir, Anwar is being tried in court on corruption and sodomy charges, which the sacked former finance minister maintains are politically motivated. Thouands have demonstrated for his release.

Malaysian Foreign Minister Abdullah Ahmad Badawi said Gore's remarks could put the nation's democratic process at risk. And APEC officials from Singapore, New Zealand, and Thailand urged the U.S. vice president to stick to economic issues during the meetings.

Mahathir brushed aside two questions from reporters Wednesday about Gore's comments, playing down the differences between the nations.

U.S. envoys also rejected suggestions that Gore's comments had distracted the summit from dealing with the serious economic crisis in Asia.

The economic crisis, which began in July 1997 in Thailand, has spread to Russia and is threatening Brazil and other Latin American nations.

The final APEC statement appeared to hew closely to the Clinton administration's free-market, pro-IMF handling of the crisis.

The IMF has organized loan packages totaling nearly $120 billion to Thailand, Indonesia, and South Korea to help bolster their economies. In return, it has demanded the nations adopt unpopular austerity measures that have sent interest rates soaring and unemployment rising.
©1998 CBS Worldwide Corp. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press and Reuters contributed to this report