FINANCE ministers from the world's most powerful economies will today hear a stark warning from Chancellor Gordon Brown about the ''major social problem'' sweeping Asia on the back of its economic crisis.
The preparatory meeting ahead of next week's G8 summit in Birmingham will discuss the consequences of the financial collapse which has left the so-called ''tiger economies'' of the East struggling to stay afloat.
Brown, who has just returned from a tour of the region, warned yesterday there would be ''social tensions if nothing is done'' and said an urgent package of economic reform backed by help on social issues was needed.
The G8 preparatory meeting in London brings together finance and foreign ministers from Britain, France, Italy, Japan, the United States, Canada, Germany and Russia. In addition to the Asian financial crisis, finance ministers are to consider European monetary reform, the progress of structural reform in Europe and employability.
The Chancellor warned the slowdown in growth which was accompanying the financial crisis, and the ensuing unemployment, was causing potentially serious social difficulties.
In Indonesia widespread protests over dramatic price increases in fuel and transport designed to restore stability to the economy have led to rioting.
Brown said he would recommend to his fellow ministers four key measures:
q The introduction of IMF codes of good practice on fiscal matters, monetary and financial policy and accounting and corporate governance.
q The strengthening of the ''architecture'' of international institutions, including the creation of a joint department of the IMF and World Bank.
q The improvement of co-ordination of the activities of governments and private sector creditors.
q Action to address social problems.
He said international financial regulation was becoming increasingly important, and consequently the international supervisory bodies had to be more effective.
The overall lesson to be drawn from the Asian crisis was the need for greater transparency in the international financial system and, to ensure that, ''new international rules of the game'' were required.
''I'm ever more convinced that if we are building new rules for the game in the future, then openness, transparency and accountability are increasingly the watchwords that have got to be applied,'' said Brown.
He also stressed the importance of encouraging the Asian governments to observe citizens' individual rights.
On social reform, the Chancellor suggested that the Asian countries had to consider whether their social security systems were adequate to deal with the fallout of the region's financial crisis.
Ahead of today's talks, European Union Commissioner Yves-Thibault de Silguy said it was vital that ministers looked at the ''impact of the effect of Emu . . . on employment''.
''I think Emu will boost employment in Europe because it is based on a sound economic framework with low inflation and based on sound public finance,'' he told a Westminster press conference.
''Emu is also a catalyst for continued structural reform in Europe. We have arrived at a stability culture in Europe and we have endorsed economic policy co-operation.''
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