Asian Responses to the Global Financial Crisis
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Asian Responses to the Global Financial Crisis

The Impact of Regionalism and the Role of the G20

Edited by Jehoon Park, T. J. Pempel and Geng Xiao

The expert contributors – both Asian and Western – illustrate that as G20 members, many Asian countries are now able to showcase their increasing powers and influence on global issues. Within this context, and via multidisciplinary economic and political science perspectives, the book deals with various issues such as World System analysis, the debate between the Washington Consensus and the Beijing Consensus, roles within the G20, and the contribution of ‘middle’ powers such as Korea and Australia. The application of European experiences to Asia is also considered, as are perspectives from the US. The book concludes that the key to resolving the current global economic crisis lies in how quickly a new global governance and monitoring system can be constructed, and that there are multiple roles for Asian countries to play in its development.
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Chapter 8: The G20 and Asian Monetary Cooperation

Woosik Moon


Woosik Moon1 8.1 INTRODUCTION Along with globalization, emerging countries have had to suffer from the whims of radical inflows and outflows of international capital. For instance, sudden capital outflows brought about a currency crisis in Asian countries in 1997. Bilateral swaps were not available; the International Monetary Fund (IMF) bailout was too stringent to help Asian countries to overcome the crisis. Realizing the need for an emergency fund, Asian countries set out to build the Chiang Mai Initiative (CMI). In 2008, Asian countries were hit by the global financial crisis which originated from the US subprime mortgage market collapse. They were victimized again, although they did not cause the crisis. The CMI was not yet ready. The IMF turned out to be inefficient and did not play any meaningful role to prevent and overcome the crisis. In the absence of an international lender of last resort, Korea, for instance, relied on a currency swap with the US, leading to the multilateralization of the CMI. It is obvious that such experiences made the creation of a global financial safety net and insurance against future crisis the top policy priorities of the Korean government. Indeed, the Korean government made best efforts to make these priorities a major part of the agenda in the G20 Seoul Summit held in November 2010. This chapter examines the strategies Korea should take to prevent financial crises and to contribute to the recovery of the world economy at global, regional and national levels. More precisely, this chapter...

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