Chiang-Mai-Initiative
The Chiang Mai Initiative ( CMI) is a multilateral currency swap arrangement among the ten members of the Association of South East Asian Nations (ASEAN ), the People's Republic of China ( including Hong Kong ), Japan and South Korea. It draws from a foreign exchange reserves pool with a value of 120 billion U.S. dollars, was launched on 24 March 2010. This pool was expanded in 2012 to 240 billion U.S. $.
After the Asian financial crisis in 1997 committed the ASEAN 3 countries an initiative to tackle short-term regional liquidity problems, comply with international financial regulations and to facilitate the work of other international organizations such as the International Monetary Fund (IMF ). The initiative began as a series of bilateral swap agreements, after the member countries on 6 May 2000 at an annual meeting of the Asian Development Bank in Chiang Mai (Thailand ) met.
History
Concept
At the height of the Asian financial crisis in 1997, the Japanese authorities proposed an Asian Monetary Fund, which should serve as a regional version of the IMF. This idea, however, was down after strong resistance from the United States on ice. After the crisis, the finance ministers of the individual members of ASEAN, China, Japan and South Korea met on 6 May 2000 at the 33rd Annual Meeting of the Board of Governors of the Asian Development Bank in Chiang Mai, to the establishment of a network of bilateral currency swap to discuss arrangements, with the aim to prevent a repeat of the Asian financial crisis in the future. The proposal also implies the possibility of creating a pool of foreign exchange reserves of the participating central banks to combat currency speculation. The pool is regarded as self-help for the expansion of IMF resources. Following the ASEAN 3 Finance Ministers Meeting a joint ministerial statement was published on the development of CMI.
Critics doubted the reasoning behind the initiative. The Asia Times Online wrote in an editorial several days after the meeting: " The idea that the existence of a currency swap or the comprehensive concept of an Asian Monetary Fund [ ... ] could prevent the Asian crisis or the worst consequences, is false and politically harmful". After the former IMF chief Horst Köhler visited five Asian countries in June 2000, the Asia Times Online condemned his assent to the " ill-conceived and likely never actionable ASEAN plus three [ ... ] currency -swap plan". In a 2001 interview with the Far Eastern Economic Review Köhler said that the CMI would promote regional economic cooperation and development, and that he was not opposed to the formation of an Asian Monetary Union.
Development
Initially, the Chiang Mai Initiative served as a symbolic act since recovered the countries affected by the Asian crisis. Thailand's export and service sector developed steadily and the gross domestic product rose from about 40 % before the 1997 crisis, to about 75 %. However, the authorities intervened actively in the foreign exchange market to prevent the appreciation of their currency in the case of the influence of the export. The result of this procedure were the rapidly rising foreign currency reserves. Thus, the East Asian market had a foreign currency reserve of 4 trillion U.S. dollars, which represented a total global foreign exchange value of 55%. The accumulation of foreign currency reserves served as insurance against another crisis. However, this was not a result of a deliberate strategy to accumulate reserves. Rather, this accumulation of reserves was the result of exchange rate intervention, so that the local currency is gaining value and therefore does not harm the export sector. A high level of foreign capital grants, there is an appreciation of the currency, which can lead to a stock crash, if it is not prevented. In Thailand, the baht rose in 2006, which will, however, not prevented by the central bank could, even though they already intervened and this led to a stock market crash. However, the accumulated reserves also served to prevent further short-term foreign debt. Therefore stayed the respective countries that the short-term debt relative to reserves were as low as possible. To make this possible, a managed floating system was used instead a fixed exchange rate system. Through these measures, it was possible to prevent worse consequences, this foreign exchange interventions.
Although these mechanisms had worked one considers the Chiang Mai Initiative to involve even more, so you converted the bilateral agreements into a multilateral system, which on the 10th ASEAN 3 meeting in 2007 in Kyoto, Japan agreed.
As of 16 October 2009, the network of 16 bilateral agreements between the ASEAN 3 countries was worth about 90 billion U.S. dollars. Moreover, had the ASEAN swap agreement pool reserves of approximately U.S. $ 2 billion.
Multilateralizing
At the 10th Meeting of the ASEAN 3 Finance Ministers in May 2007, further procedures were agreed at the CMI. In February 2009, the ASEAN 3 agreed to extend the original 78 billion (2008 ) in the fund to 120 billion dollars. During the meeting of the ASEAN Finance Ministers in April 2009 in Pattaya, the individual contributions of each Member States were set to the pool reserves. Each of the six original members of ASEAN (Indonesia, Malaysia, Singapore, the Philippines and Thailand) controls with a contribution of U.S. $ 4.77 billion, while each of the remaining four members between 30 million dollars and 1 billion U.S. dollars contributes. The ten countries were planning a meeting with their partners, but the summit was canceled due to the Thai political crisis. Thus, the start of the multilateral agreement to a later date was postponed. As the leaders of the thirteen countries finally met in Bali in May, the individual contributions of China, Japan and South Korea have been completed. At this summit, as Hong Kong has been added as a new member whose contribution was calculated to China, although Hong Kong " a peculiar monetary management is ". Hong Kong's participation increased China's total contribution to $ 38.4 billion, equal to that of Japan and South Korea, which contribute 19.6 billion U.S. dollars. China and Japan remain the largest contributors, each of them has 32 percent of the total financial contributions, as well as Korea. These three countries share 80 % of all contributions to the CMIM while the remaining 20 % from the ASEAN countries to come.
On May 3, 2012, the 15th ASEAN 3 Finance Ministers and Central Bank Governors was meeting in Manila, Philippines, instead, that should conclude an agreement on the extension of the current value of 120 billion U.S. dollars to 240 billion U.S. dollars. The ASEAN 3 agreed also that CMIM Precautionary Line ( CMIM -PL), the. Modeled after the PPL program within the IMF It has been designed to prevent a financial crisis.
Members
Bloomberg believes that the members of the CMI held in 2009 more than 4.1 trillion dollars of other foreign currency.
AMRO (ASEAN 3 Macroeconmic Research Office )
AMRO is the macroeconomic surveillance unit of the multilateral Chiang Mai Initiative of ASEAN 3. AMRO is used for monitoring and analysis of the regional economy and for the early detection of risks. Its purpose is to provide a fast implementation of remedial and effective decision-making of the Chiang Mai Initiative.