The Economic Rise of China: Challenges and Opportunities for ASEAN

This paper looks at the economic rise of China and its impacts and implications for the Association of South-East Asian Nations (ASEAN) region. The issues of complementarities and competitiveness of ASEAN and China in trade and investment and the opportunities and challenges arising from China's emergence and the ASEAN-China Free Trade Area are discussed. The message from China's emergence is clear and strong; it is that size does matter. To increase ASEAN competitiveness, the paper highlights the need for a deeper and more rapid economic integration of ASEAN in order to exploit scale economies. The important role of Japan in this process is highlighted. Finally the issue of ASEAN economic diversity is discussed. It is suggested that while ASEAN is fairly diverse, this should not be a critical stumbling block to a more rapid economic integration of ASEAN.     

Ten Years After the Financial Crisis in Thailand: What Has Been Learned or Not Learned?

The 1997 financial crisis provided many lessons about the weaknesses of Thailand's economic and financial system before the crisis, weaknesses that eventually led to the crisis. Since then, these lessons have led to many economic and financial reforms. This paper reviews the lessons and reforms that have been carried out. These include improvements to the data system needed for adequate macroeconomic monitoring, changes to the macroeconomic management framework and monetary policy regime, and various aspects of financial sector reforms. This paper also indicates the lessons that might not yet have been sufficiently learned and new risks to future economic stability. These include political interference in financial institutions, leading to inappropriate or excessive lending, and lack of transparency in fiscal liabilities that could mislead macroeconomic management.     

Chiang Mai Initiative Multilateralization: Origin,Development, and Outlook

This paper discusses the Chiang Mai Initiative Multilateralization (CMIM) – its origin, development, and outlook. The experiences of the 1997–1998 East Asian financial crisis that led to the creation of the Chiang Mai Initiative (CMI), the evolution of the Chiang Mai Initiative to become the CMIM, and the setting up of the ASEAN+3 Macroeconomic Research Office (AMRO) to support CMIM are reviewed. Proposals are made on how to make the liquidity support role of the CMIM more effective. These involve changing the International Monetary Fund link from that based on using more than a certain percentage of a country's CMIM quota to that based on the number of times the 90‐day CMIM swap needs to be rolled over, supplementing the size of the CMIM through linked bilateral swaps, allowing “contributing partners” beyond the current CMIM members, and developing the effectiveness of AMRO and its evolution into an East Asian monetary organization.