The Chiang Mai Initiative Multilateralisation and Regional Integration

When I was in Bangkok during the last two weeks of February 2013, there was much media and public attention on the ASEAN Economic Community.  As part of overarching regional objectives to be in effect in 2015, it is quite understandable why citizens of member countries would like to learn more about this regional project and how it would affect their lives.  Researching on the Chiang Mai Initiative Multilateralisation (CMIM), a mechanism to provide financial safety-net to ASEAN and its three counterparts, namely China, Japan, and South Korea (or the ASEAN+3), allows me to explore how this cooperation fits in and contributes to the process of regional integration.

To date my research has focused on understanding how the CMIM has evolved and what we could learn from this evolution about regional cooperation under the framework of ASEAN+3.  Evidence from written works on the CMIM and my interviews with Thai officials and scholars points to an incremental and cautious approach, which is largely a product of the preference for pragmatism and respect for national autonomy held among Southeast and East Asian policymakers.  The ten-year lapse between the birth of the CMI (Chiang Mai Initiative) in 2000 as a framework for bilateral swap arrangements among ASEAN+3 countries and when the CMIM became effective as a multi-lateralized mechanism in 2010 attests to the gradualism and caution underlying ASEAN+3 cooperation.  Central to this process of negotiation was the related issues of financial contribution and voting power, which took about two years to complete after an agreement for the CMIM was reached in 2007.  In 2010, another incremental step was made to establish the ASEAN+3 Macroeconomic Research Office (AMRO) to monitor regional economies and provide decision-making for the CMIM.  While the AMRO’s corporate status may limit its authority (compared to an international organization like the IMF), the private standing could put member countries at ease with regard to its potentially-intrusive surveillance role.  Pragmatic intention can also be seen in AMRO’s small size (11 staffs in 2011), making it relatively easy for member governments to agree on funding, while leaving opportunity to grow to future development.

As I continue to examine the financial and monetary cooperation in East Asia and their impact on regional integration, an observation can be made.  While the evolution of the CMIM has its own dynamics and rationale, the interest among ASEAN countries in forming an economic community could help inspire efforts to institutionalize the CMIM.  At the governmental level, this means more willingness to make the CMIM really work for member countries, as seen in a move in 2012 to increase its total size (from US$ 120 billion to US$240 billion) and the IMF de-linked portion (from 20% to 30% in 2012 and possibly to 40% in 2014).  However, lesser development has been made at the societal level as the CMIM continues to be known rather exclusively among policymakers and technocrats.  Implications of the CMIM’s technical nature on public perception of regional integration will need to be explored further.

This blog post has been written by Supanai Sookmark. Supanai is an instructor at Carleton University in Ottawa and a Junior Fellow for 2012 under the ASEAN-Canada Research Partnership. For more information on the ASEAN-Canada Research Partnership, please click here.