* ADB holds annual meeting in Bali May 2-May 5 * East Asian countries to discuss details of FX fund * Swine flu emerges as potential threat to Asian countries * ADB to boost lending to help economies through downturn By Yoo Choonsik SEOUL, May 1 (Reuters) - East Asian finance chiefs are expected to try to hammer out details in coming days of a proposed $120 billion fund they can tap in the event of a currency crisis. They will meet on the sidelines of the Asian Development Bank's (ADB) annual meeting in Bali that runs from Saturday until Tuesday as Asia faces the global economic downturn and the new threat of a pandemic outbreak of the swine flu. "I expect the swine flu issue to become an important topic this year because it can give a severe impact on international trade," Kim Kyung-ho, an executive director of the ADB, the region's biggest multi-national lender, said by telephone from Manila. The World Health Organisation raised its alert level to phase 5 this week, meaning a pandemic is imminent. But although the virus is blamed for the deaths of 176 people Mexico, only one death has been reported outside the Latin American country. To confront the global downturn, the ADB will add $3 billion to the $10 billion earmarked for project lending over the next two years, the bank's president, Haruhiko Kuoda told the Financial Times newspaper. The financial crisis and the risk aversion it has prompted means many Asian countries will struggle to raise funds and will need to rely on other countries or multilateral lenders such as th ADB. The lender said in a statement on Thursday that it will triple its capital base to $165 billion so that it can increase lending to emerging Asian economies, all of which have been hit first by last year's spike in prices and later the global economic downturn. [ID:nHKG287337] Confronted by the downturn, the 13 countries of the Association of Southeast Asian Nations plus Japan, China and South Korea have agreed to boost a currency swap agreement to $120 billion from $80 billion. The multilateral pool will replace a network of bilateral currency swap arrangements sealed under the Chiang Mai Initiative (CMI) to help member countries avoid a repeat of the 1997-1998 financial crisis when several currencies buckled in the face of capital flight from the region. The countries have agreed to launch the emergency fund but have yet to agree on how the fund will be put together and how to operate it. "Negotiations are still going on how to divide the contributions to the CMI between South Korea, China and Japan, but the final agreement could not be reached this time," Shin Je-yoon, South Korea's deputy finance minister, told reporters. Japan, China and South Korea, who together have more than $3 trillion in foreign exchange reserves, have agreed to chip in 80 percent of the total funds. But they have yet to agree on individual stakes between them. In addition, policy makers will also discuss how to counter the growing risks from climate change, which the ADB warned this week threatens southeast Asia's huge coastal cities and could slash crop output and access to clean water. [ID:nSP457574] LINKS: * http://www.adb.org/AnnualMeeting/2009 for details of the ADB's annual meeting * [nFLU] for full coverage of the deadly flu * [ASIA-ECI-NEWS] for recent stories on Asian economies (Editing by Neil Fullick)
A visitor mourns for victims of the Sichuan earthquake at the Donghekou Earthquake Site Park in Qingchuan County, Sichuan province May 1, 2009. China will mark the one-year anniversary of the ...
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