VZCZCXRO8564
RR RUEHCHI RUEHDT RUEHFK RUEHHM RUEHKSO RUEHNAG RUEHNH RUEHPB
DE RUEHBK #0534 0630112
ZNR UUUUU ZZH
R 040112Z MAR 09
FM AMEMBASSY BANGKOK
TO RUEHC/SECSTATE WASHDC 6256
INFO RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION
RUEAIIA/CIA WASHINGTON DC
RHEHNSC/NSC WASHDC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHEFDIA/DIA WASHDC

UNCLAS BANGKOK 000534 
 
SIPDIS 
 
STATE FOR EAP/EP AND EEB/OMA A. WHITTINGTON 
TREASURY FOR IMB B. MURDEN, W. MONROE, AND M. BEASLEY 
 
E.O. 12958: DECL: 03/03/2024 
TAGS: ASEAN ECON EFIN TH
SUBJECT: THAILAND FOR ASEAN -- INFORMATION IN ADVANCE OF G-20 MEETINGS 
 
REFS: A) SECSTATE 17502 B) BANGKOK 384 C) 08 SINGAPORE 947 D) BANGKOK 
370 
 
¶1.  (SBU) In response to ref A, we believe there are four issues that 
Thai Prime Minister Abhisit Vejjaviva, speaking on behalf of ASEAN, 
may raise at the G-20 Summit. (Note:  For information regarding how 
the financial crisis has affected Thailand specifically, and how the 
Royal Thai Government (RTG) has responded, see ref B.) 
 
Fight Against Protectionism 
--------------------------- 
¶2. (SBU) Thai press has reported that Prime Minister Abhisit will 
raise the issue of protectionism at the G-20 London Summit.  Thai 
authorities (echoing those of other ASEAN nations) have expressed 
concern over the potential for trade protectionism represented by the 
"Buy American" provision in the recently-passed U.S. stimulus bill. 
Facing protectionist tendencies back home, PM Abhisit may feel that 
anything short of a strong repudiation of protectionism by the G-20 
could lead to a justification for protectionism in Thailand and 
elsewhere within ASEAN (ref. D). 
 
Capital Increase for the ADB 
---------------------------- 
¶3. (SBU) At a meeting of the ASEAN Plus Three (Japan, China, and 
South Korea) Finance Ministers in Phuket, Thailand, on February 22, 
the Ministers agreed that, to assist nations dealing with the 
economic crisis, the Asian Development Bank (ADB) should receive a 
capital increase. 
 
Regional Financial Mechanism 
-------------------------------- 
¶4. (SBU) The Finance Ministers on February 22 also agreed to increase 
the overall size of the existing currency pool arrangement known as 
the Chiang Mai Initiative (CMI) from approximately USD 80 billion to 
USD 120 billion, with the Plus Three nations contributing 80 percent 
of the funds and the ASEAN nations contributing 20 percent.   (Note: 
The CMI is an effort, still fledgling, to give the Asian region an 
alternative to having to go to traditional international financial 
institutions for forex assistance in time of financial crisis.  For 
background information on the CMI, see ref. D.  End Note).  The 
Ministers also agreed to support the multilateralization of the fund, 
transforming it from a series of bilateral currency swap 
arrangements, and to set up a surveillance unit for the 
multilateralized fund, although no decision on where to house the 
unit was taken. 
 
Reform of Financial Institutions 
-------------------------------- 
 
¶5. (SBU) Judging from his public remarks at the ASEAN summit on 
February 28 in Bangkok, PM Abhisit may also raise the need to reform 
existing international financial institutions in light of the 
deficiencies demonstrated by the current crisis.  However, there was 
no indication that he would go beyond a general call for reform and 
make specific recommendations. 
 
¶6. (SBU) Comment: While no doubt appreciating the invitation to 
attend the G-20, ASEAN is a consensus-based organization that arrives 
at decisions slowly.  The economic circumstances of the member 
countries vary widely and each has dealt with the crisis in a variety 
of ways.  PM Abhisit is an eloquent and effective speaker, but he is 
unlikely to get too far in front of what little ASEAN members have 
formally agreed upon. Both the need for consensus and the different 
needs of the member states make it difficult for ASEAN to implement 
specific bold initiatives among themselves, let alone call for such 
at the G-20. 
 
JOHN