KUALA LUMPUR Southeast Asian finance ministers opened a two-day annual meeting in Kuala Lumpur Saturday to discuss how to sustain economic growth and stabilize weakening regional currencies amid a U.S. economic slowdown.

The ministers from the 10-member Association of Southeast Asian Nations (ASEAN) are also expected to discuss the region's economic outlook, the progress of financial reforms and corporate restructuring, efforts to liberalize the financial sector and a stepping-up of privatization schemes.

Malaysian Finance Minister Daim Zainuddin, who opened the meeting, said ASEAN countries were "bracing" for the impact of a world economic slowdown, triggered by the moderating economy of the United States, the biggest trading partner of most ASEAN nations.

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

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

Daim said the task for ASEAN now is how to sustain the momentum of economic growth and prevent a recurrence of the 1997-98 currency and financial crisis that devastated the region.

Despite the gloomy economic outlook, he said, ASEAN should not be "distracted" from watching out for the challenges of globalization, pushing for reforms in the world's financial system and ensuring that developing countries get an equal share of a liberalized global economy.

According to a draft of the ministers' joint statement, to be issued today, they will pledge to pursue the region's efforts to restructure banking and corporate sectors and develop a vibrant ASEAN capital market.

A key issue for the ministers is whether they can reach a consensus on how to operate a proposed bilateral currency swap arrangement known as the Chiang Mai initiative and involving Southeast Asian countries and Japan, China and South Korea.

Under the proposed swap deal, ASEAN countries suddenly hit by short-term liquidity would be able to swap their domestic currencies for the U.S. dollar, Japanese yen or the euro.

The ASEAN ministers are eager to present a joint agreement on the issue before they meet with their counterparts from Japan, China and South Korea next month in Honolulu.

(DPA)