I have long argued that if IMF fails to take proper actions to increase the vote power of Asian countries we may see a birth of the Asian Monetary Fund, see my post from RFM to AMF. In today’s article Financial Times presents several views of Asian officials that AMF idea is on the cards. The FT quote follows:
“The IMF failed to make precise reforms [while] the US was ill-positioned to take swift action,” said Duck-Koo Chung, South Korean finance vice-minister at the time of the crisis. “Instead of waiting for a fire department across the world to act, the region needs a voluntary, community fire brigade.”
The crisis began when Thailand devalued the baht on July 2 1997, and rapidly spread to Indonesia, the Philippines, Malaysia and South Korea. Japan proposed an Asian bail-out fund in late 1997, but the idea failed to take off amid strong US resistance.
Mr Chung said inter-national opinion had become more receptive to the idea of creating an Asian Monetary Fund. “Ten years before . . . the environment was not so positive. But now we have support from inter-national society,” he said.
The Thai finance minister, Chalongphob Sussangkarn, said the balance of power in the global financial system had shifted in favour of Asia, making the idea more feasible. He said Asian central banks had accumulated trillions of dollars in foreign exchange reserves invested mostly in US Treasuries.
“We cannot let debtor nations manage the global financial system,” he said. “The IMF is more like a debtor monetary organisation. We need a creditor monetary organisation.”