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Affordable delays for the Chiang Mai Initiative?

Author: Joel Rathus, Adelaide University While the worst of the Global Financial Crisis may have passed, in East Asia the economic pressures are still mounting. Regional economies are struggling with inflation, asset bubbles and now increasingly volatile exchange rate movements

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While the worst of the Global Financial Crisis may have passed, in East Asia the economic pressures are still mounting. Regional economies are struggling with inflation, asset bubbles and now increasingly volatile exchange rate movements. One mechanism which might aid the regional economies to coordinate their exchange rate policies, to fend off currency speculation and assist with reigning in increasingly problematic ‘hot money’ flows is the Chiang Mai Initiative Multilateralisation (CMIM).

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However, getting Japan and China to agree has proven difficult – especially on the issue of contribution and (therefore) voting weight. This is important because these two are both required to effectively bankroll the CMIM.

The most recent addition to this saga of strained Sino-Japanese political relations hampering the development of regional institutions is the contest over who will head the surveillance arm of the CMIM, the so-called ASEAN+3 Macroeconomic Research Office (AMRO). The original schedule, which was accelerated due to the GFC, called for an appointment to be made in November, however Chinese objections to the Japanese candidate have apparently pushed the timetable back until the next ASEAN Plus Three Finance Ministers Meeting in April 2011.

After the ruckus caused by shifting the AMRO office from Thailand to Singapore due to domestic political instability, can the CMIM really afford to have another internal dispute over the AMRO director?

It is clear why such disputes would arise. AMRO’s function of providing regional surveillance is crucial to the utility of the CMIM as a whole. This is because as long as financial policy coordination remains at the level of policy dialogue, CMIM members will be hesitant to allow crisis-stricken countries access to the pooled reserves. Indeed, the fact that only 20 per cent of the funds can be tapped without an IMF agreement in place reflects the fact that the IMF is continuing to lead – this is due to the IMF’s credibility in providing surveillance under both Article IV and in its actual rescue packages and other assistance programs. The massive expansion of the New Arrangements to Borrow at the IMF announced by the 2009 London G20 Leaders Summit, together with a series of other institutional innovations, is slowly reducing the need for the CMIM to develop its own competencies in this regard – indeed, it is worth recalling that an expansion of the NAB was the policy response initially considered by East Asian governments in the face of the Asian Financial Crisis before discussions moved via the shortly lived Asian Monetary Fund proposal to the CMI. Thus a return to the NAB suggests a shifting of focus away from the CMI, even though both mechanisms have been expanded after the outbreak of the Global Financial Crisis.

Crises are crucial inflection points at which policymakers can question the received wisdom and create new solutions. Many questions remain about how the CMIM will operate. Indeed, despite activation, the CMIM was not used during the GFC, regional member countries preferring to use ‘faster’ bilateral swap arrangement among themselves. And while some such as Korea and Singapore were also willing to engage with the US Fed, Asia as a whole continued to shun the IMF and focussed on building up the CMIM. One should never waste a good crisis, and the Global Financial Crisis provided the impetus to override intra-mural tensions in both North-east and Southeast Asia allowing compromise solutions to emerge.

But continued bickering over largely symbolic roles within the CMIM is running the risk that the crisis will have receded before the institutional arrangements are in place and a new solidarity in East Asia has developed. This would a pity because as de Bouwer has noted in his book, Financial Governance in Asia, the CMIM is not in some form of Gresham’s Law-type competition with the IMF, and would supplement rather than weaken global economic management at a time when this is much required.

Author: Joel Rathus, Adelaide University

Joel Rathus is a recent PhD graduate from Adelaide University and a regular contributor to the East Asia Forum. His other posts can be found here.

  1. The Chiang Mai Initiative’s multilateralisation: A good start
  2. The Chiang Mai Initiative: China, Japan and financial regionalism
  3. Are the Philippines equal before the Chiang Mai Initiative?

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Affordable delays for the Chiang Mai Initiative?

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Asean

COVID-19 Vaccine Roll Outs in ASEAN Live Updates by Country

Thailand is currently expecting vaccines to be delivered in mid-2021. The doses would cover 13 million people in a population of about 69 million. Thailand’s National Vaccine Institute signed a non-refundable advance market commitment contract worth 2.38 billion baht (US$79 million) with AstraZeneca to reserve the supplies

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ASEAN coronavirus Covid-19 live updates by country

Brunei

Brunei has joined the global Covax scheme and is expecting to have the COVID-19 vaccine in Q1 2021, having sourced enough supplies to cover 50% of the population. Discussions are on-going with other suppliers.   

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  • Brunei recorded one new case on May 8, bringing the total to 330 cases amid three deaths.
  • Brunei saw one new case on May 7, taking the total to 229 cases amid three deaths.
  • Brunei recorded one new case on May 4, taking the total to 228 amid three deaths.

Cambodia

Cambodia is expected to import vaccines from both China and Russia. China’s vaccines are still undergoing clinical trials while Russia has already commenced production. Australia has offered financial support to aid vaccine coverage in several southeast Asia countries including Cambodia.  

  • Cambodia recorded 538 new cases on May 8, bringing the total to 18,717 cases amid 114 deaths.
  • Cambodia recorded 558 new cases on May 7, taking the total to 18,179 cases and 114 deaths.
  • Cambodia reported 650 new cases and four deaths on May 6, bringing the tallies to 17,621 cases and 114 deaths.

Indonesia

Indonesia has commenced vaccinations with just over nine million doses being given to front line workers from last month. China’s Sinovac is in discussions with Indonesia to provide supplies, however, the Government faces difficulties with a large population of 268 million and price sensitivity at Sinovac’s estimated costs at 200,000 rupiah (US$20) a dose.

Indonesia’s Health Ministry’s Disease Control and Prevention Director-General Achmad Yurianto said that vaccinations would only be provided to citizens aged 18-59. The vaccine has also been required to pass halal certification prior to use and it is uncertain how the country can source enough vaccines to reach a sizeable part of its population.  Australia has stated it will also provide financial support to solve these issues.  

  • Indonesia recorded 6,130 new cases and 179 deaths on May 8, bringing the totals to 1,709,762 cases and 46,842 deaths.
  • Indonesia saw 6,327 new cases and 167 deaths on May 7, bringing the tallies to 1,703,632 cases and 46,663 deaths.
  • Indonesia reported 5,647 new cases and 147 deaths on May 6, bringing the totals to 1,697,305 cases and 46,496 deaths.

Laos

Laos has been trialing the Russian Sputnik V vaccine and is also in discussions with China about acquiring supplies. 

  • Laos recorded 28 new cases on May 8, bringing the total to 1,233.
  • Laos saw 28 new cases on May 7, taking the total to 1,205.
  • Laos saw 105 new cases on May 6, taking the total to 1,177.

Malaysia

Malaysia is to provide vaccines free of charge to its nationals, but foreigners will need to pay for the treatment, according to the Malaysian Minister of Health, Tan Sri Muhyiddin Yassin, who has signed a deal with Pfizer for 12.8 million doses.

These will be administered in two stages of 6.4 million people each, with the program to commence in Q1 2021. The country aims to inoculate between 80-100% of its citizens. 

  • Malaysia reported 4,519 new cases and 25 deaths on May 8, taking the tallies to 436,944 cases and 1,657 deaths.
  • Malaysia saw 4,498 new cases and 22 deaths on May 7, bringing the tallies to 432,425 cases and 1,632 deaths.
  • Malaysia recorded 3,551 new cases and 19 deaths on May 6, taking the totals to 427,927 cases and 1,610 deaths.

Myanmar

Myanmar is seeking assistance from the Gavi and Covax programs to acquire vaccines, while Australia is also providing financial relief. At present, the Government aims to treat 20 percent of the ‘most at risk’ in the country with vaccines. The Government is struggling with finances and logistics and is also under US sanctions, while cases are surging. The Government has banned the celebration of Christmas and other seasonal celebrations.   

  • Myanmar recorded 31 new cases on May 8, taking the total to 142,934 amid 3,210 deaths.
  • Myanmar saw 29 new cases on May 7, taking the total to 142,903 amid 3,210 deaths.
  • Myanmar recorded 16 new cases and one death on May 5, bringing the total to 142,874 amid 3,210 deaths.

Philippines

The Philippines aims to commence vaccinations from June 2021 and expects to inoculate about 25 million people (about 25 percent of its population) over the course of the year. The country has been badly affected by the virus and has the second-highest rate in Southeast Asia.

The business community has reacted, more than 30 local companies signed an agreement to purchase at least 2.6 million vaccine doses from AstraZeneca in the country’s first such deal to secure coronavirus vaccines, ten days ago. They plan to donate a large part of the doses to the government for its planned vaccination program and use the rest to inoculate their employees. 

  • The country saw 6,979 new cases and 170 deaths on May 8, taking the totals to 1,094,849 cases and 18,269 deaths.
  • The Philippines reported 7,733 new cases and 108 deaths on May 7, bringing the tallies to 1,087,885 cases and 18,099 deaths.
  • The Philippines saw 6,637 new cases and 191 deaths on May 6, bringing the totals to 1,080,172 cases and 17,991 deaths.

Singapore

Singapore has been working on producing its own ‘Lunar’ vaccine, in a joint venture between the US company Arcturus together with the Duke-NUS medical school. It is a single dose, mRNA shot, developed from genetically engineering COVID-19 genes into an otherwise harmless virus. This technique is marginally safer than other vaccines which rely on dead Covid-19 material to provoke an immune response. The vaccine is expected to be available from Q1 2021. High-risk personnel will receive the vaccine first in a process to be determined by the government.     

  • Singapore recorded 20 new cases on May 8, taking the total to 61,331 cases amid 31 deaths.
  • Singapore saw 25 new cases on May 7, taking the total to 61,311 cases amid 31 deaths.
  • Singapore saw 18 new cases on May 6, bringing the total to 61,286 cases amid 31 deaths.

Thailand

Thailand is currently expecting vaccines to be delivered in mid-2021. The doses would cover 13 million people in a population of about 69 million.

Thailand’s National Vaccine Institute signed a non-refundable advance market commitment contract worth 2.38 billion baht (US$79 million) with AstraZeneca to reserve the supplies. Discussions are also on-going with Oxford University in the UK to secure a vaccine that could be available in Q1 if trials are completed in time.   

  • Thailand reported 2,419 new cases and 19 deaths on May 8, taking the tallies to 81,274 cases and 382 deaths.
  • Thailand recorded 2,044 new cases and 27 deaths on May 7, taking the totals to 78,855 cases and 363 deaths.
  • Thailand reported 1,911 new cases and 18 deaths on May 6, taking the tallies to 76,811 cases and 336 deaths.

Vietnam

Vietnam’s National Institute of Hygiene and Epidemiology (NIHE), a division of Vietnam’s Ministry of Health, has signed an agreement with Medigen Vaccine, a Taipei, Taiwan-based vaccine company to secure the supply of 3 million to 10 million COVID-19 vaccine doses in 2021. Medigen is currently conducting Phase II studies of the vaccine, co-developed with the USA’s National Institutes of Health (NIH), in Taiwan and Vietnam with a view to a Q1 2021 rollout.  

Vietnam is also working on producing its own vaccine, with the Institute of Vaccines and Medical Biologicals (IVAC) in Nha Trang City, partnering with New York City-based Icahn School of Medicine and the global health non-profit organization PATH. Phase 1 trials are already underway in Vietnam, while Phases 2 & 3 will be conducted at the beginning of 2021. The institute plans to submit documents for approval to the health ministry as early as April next year and claims to be capable of producing 30 million doses a year, expecting that a national vaccine could be distributed to the general population in October 2021.

  • Vietnam saw 15 new cases on May 8, taking the total to 3,152 cases amid 35 deaths.
  • As of May 7, 2021, Vietnam’s Ministry of Health confirmed a total of 3,091 cases of COVID-19. However, 2,560 of the affected patients have recovered and been discharged from hospitals. Vietnam has also recorded 35 deaths due to the pandemic. The latest community transmission cases have been reported from Hanoi, Vinh Phuc, Thai Binh, Bac Ninh, and Da Nang among others. 16 local cases are linked to the National Hospital of Tropical Diseases in Hanoi’s Dong Anh district.
  • As of May 6, 2021, Vietnam’s Ministry of Health confirmed a total of 3,030 cases of COVID-19. However, 2,560 of the affected patients have recovered and been discharged from hospitals. Vietnam has also recorded 35 deaths due to the pandemic. The latest community transmission cases have been reported from Hanoi’s outskirts district of Dong Anh.

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