(AFP) - Southeast Asian finance ministers began talks on ways to safeguard their economic recovery from another crisis as fears of a global recession mounted.

Satisfaction at a generally strong bounce-back from the 1997/98 meltdown was tempered by apprehension as ministers from the Association of Southeast Asian Nations (Asean) started two days of debate.

A plan for an expanded regional swap arrangement to shield currencies from any future crisis remained stalled over Malaysian-led objections to any role for the International Monetary Fund (IMF).

Top Asian Development Bank officials urged ministers to "enhance their competitiveness and continue with corporate restructuring to cope with the severe impact of an economic slowdown," an Asean official said.

Malaysia Finance Minister Daim Zainuddin opened the closed-door meeting on an upbeat note.

"We meet today under much improved cirumstances, with growth in our economies remaining robust and indicators suggesting improving consumer confidence and domestic demand," he said in a speech.

Greater flexibility

This gave Asean great flexibility in addressing the emerging challenges and risks and the longer-term issues.

"At the global level we are bracing ourselves for the slowing down of the world economy following the already moderating US economy," Daim said.

"What remains uncertain at this point is the magnitude, duration and severity of the slowdown.

"Aside from the impact of such a slowdown on exports from the region, other issues include external financing, oil prices and the direction of equity markets."

Daim said issues to be addressed to sustain growth ranged from macroeconomic stabilisation to structural reforms.

"We need also to remain focused on the longer-term issues including preventing the recurrence of the currency and financial crisis."

Ministers should address "the continuing challenges" of globalisation and liberalisation, the need for reforms to the international financial architecture and ensuring everyone benefits from global growth.

Linking international reserves

Ministers will debate the "Chiang Mai initiative" to link the international reserves of the 10 Asean countries with those from China, South Korea and Japan to provide greater resources in future crises.

Japan wants IMF involvement and is supported by China and South Korea. But Malaysia and some other Asean countries fear that a surveillance role for the IMF would interfere in decision-making by individual states.

The finance ministers, in a draft statement prepared before the meeting, say Southeast Asia faces an "increasingly uncertain" economic outlook this year amid the US slowdown and Japan's still-stalled recovery.

The draft predicts average growth of 4.5 to 5.0 percent for 2001 compared with 5.3 percent last year.

Stronger domestic demand will help compensate for the fall in exports, the draft statement says.