After meeting in Canberra with his Singaporean counterpart Goh Chok Tong, prime minister John Howard highlighted Indonesia as crucial to any recovery, with elections there on June 7 vital for stability.

Shigemitsu Sugisaki, deputy managing director of IMF, urged Asian leaders to put greater emphasis on attracting stable-long-term investments instead of short-term capital controls.

He said the basic strategy in crisis hit countries was sound and appeared to be working but another set of key issues must be debated.

"One of the most important relates to capital flows," he wrote in the Australian Financial Review, adding the involvement of private sector creditors to prevent another crisis was also critical.

"The fact that so many external creditors could pull their money out of thecrisis countries at short notice was one of the reasons that the crisis spread.

"There is a need to anticipate and prestall similar reactions in the future.

"This, in part, requires an effort to avoid the build-up of economic imbalances and heavy inflows of short-term capital that ultimately destabilised emerging market economies."

But he said this could not be forced on countries and that transparency must spring from an understanding that more information was in the best interests of healthy markets.