The Asian Perspective
Edited by Masahiro Kawai, Peter J. Morgan and Pradumna B. Rana
Chapter 4: Enhancing the effectiveness of CMIM and AMRO: challenges and tasks
Recent crises, particularly the sovereign debt crisis in the euro area economies, have provided momentum to greater regional financial cooperation in the region. This is particularly evident among the Association of Southeast Asian Nations (ASEAN)+3 economies. Through the establishment of the Chiang Mai Initiative Multilateralization (CMIM) and the ASEAN+3 Macroeconomic Research Office (AMRO) in March 2010 and May 2011, respectively, substantial headway has been made in this regard. Despite the advance of regional cooperation among the ASEAN+3 economies, a series of fundamental questions have been raised, above all about the size of the CMIM facility. Although the CMIM was doubled in size to US$240 billion with effect from May 2012, the amount has frequently been criticized as insufficient. The European Financial Stability Facility (EFSF) of 750 billion euros in 2011, for instance, amounted to about 8 per cent of the total gross domestic product (GDP) of the euro area, while the CMIM amounted to only about 1.5 per cent of the total GDP of the ASEAN+3 economies. The question, therefore, is whether the CMIM can be an effective and relevant part of regional financial cooperation given its limited financial resources. Another fundamental issue is the role of the CMIM and its relation to other available facilities, including bilateral swap lines, as well as global facilities – most notably those provided by the International Monetary Fund (IMF).
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