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The IMF and East Asia: A Changing Regional Financial Architecture

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  • Gordon de Brouwer

Abstract

The financial crises of 1997 and 1998 have had a profound effect on how East Asia sees the role of the IMF and its strategic interests relative to those of the United States in international finance. The crises have spurred demand for a regional financial architecture in East Asia – ranging from deeper policy dialogue and surveillance, a system of financial cooperation, and even talk of common exchange rate arrangements. This paper analyses the economic, strategic and chauvinistic motivations behind this, and evaluates the merit of some of these proposals. Regional policy dialogue and surveillance in East Asia are weak, and the strengthening that is occurring through the ASEAN+3 grouping is welcome and important. There is also a strong case to be made for regional financial cooperation to complement global arrangements. A regional arrangement can secure liquidity and financing support to respond to small or localised crises, and may be a more effective preventive measure than the IMF’s Contingent Credit Line facility. A regional arrangement would also boost policy dialogue and surveillance. But progress to date has been slow.

Suggested Citation

  • Gordon de Brouwer, 2002. "The IMF and East Asia: A Changing Regional Financial Architecture," Asia Pacific Economic Papers 324, Australia-Japan Research Centre, Crawford School of Public Policy, The Australian National University.
    • Handle: RePEc:csg:ajrcau:324
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    File URL: https://crawford.anu.edu.au/pdf/pep/pep-324.pdf
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    References listed on IDEAS

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    1. Kawai, Masahiro & Akiyama, Shigeru, 2000. "Implications of the currency crisis for exchange rate arrangements in emerging East Asia," Policy Research Working Paper Series 2502, The World Bank.
    2. Roberto Rigobon, 2002. "Contagion: How to Measure It?," NBER Chapters, in: Preventing Currency Crises in Emerging Markets, pages 269-334, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Andrew Elek, 2003. "Beyond Free Trade Agreements: 21st Century Choices for East Asian Economic Cooperation," Asia Pacific Economic Papers 336, Australia-Japan Research Centre, Crawford School of Public Policy, The Australian National University.

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    JEL classification:

    • F50 - International Economics - - International Relations, National Security, and International Political Economy - - - General

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