Letter to the Editor.
Now that the ASEAN Charter has come into force and ASEAN has become a legal entity, member states should double their efforts to enhance cooperation within the region.
The global financial crisis which is already impacting upon ASEAN countries challenges the regional organization to commit itself wholeheartedly to initiatives which may not be palatable to certain powers outside Asia.
One such initiative that was proposed 11 years ago by a Japanese leader, Mr. Eisuke Sakakibara,—- the Asian Monetary Fund— has now been resurrected by some ASEAN leaders themselves. At that time, in 1997, in the midst of the Asian financial crisis, the Sakakibara proposal was strongly opposed by both the US government under President Bill Clinton and the International Monetary Fund (IMF). They did not want a new financial entity managed by Asians, which was to embrace the ASEAN states and China, Japan and South Korea, to dent the dominance of the IMF. It is worth noting that the US official who was most vocal in his opposition to the Asian Monetary Fund (AMF) was Lawrence Summers, then Deputy Secretary of the Treasury, who has now been appointed by President-elect Barack Obama to the powerful position of chair of the National Economic Council.
This time the US and its allies, and the IMF, will find it more difficult to crush the AMF idea. They are not only much weaker from a financial and economic angle; they are also more beholden today to China, Japan, and to a lesser extent, Korea than they were 11 years ago. This is why ASEAN and the three East Asian economic giants should be resolute in their determination to create the AMF.
There are signs to suggest that the AMF will be translated into reality at the ASEAN Summit in Bangkok in February 2009. Malaysia’s Foreign Minister, Dr. Rais Yatim, has indicated that there is the political will now to establish the AMF, capitalized at 120 billion dollars. The Prime Ministers of China, Japan and Korea have also urged governments in the region to set up the AMF which they hope will supersede the bilateral currency swaps envisaged in the Chiang Mai Initiative eight years ago.
Given the reluctance of the US government to undertake meaningful restructuring of the international financial architecture, an initiative like the AMF may be one of the few options available to economies in the region that seek to minimize the adverse consequences of the global financial crisis. Besides, the three East Asian states and ASEAN have the right to try to shape their own financial architecture to the extent that it is possible since they control two thirds of all the foreign exchange reserves in the world.
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Dr. Chandra Muzaffar,
President,
International Movement for as Just World (JUST).
19 December 2008.