Asean Monetary Cooperation

This study examines the case for and against regional financial arrangements in East Asia, describes the Chiang Mai Initiative, compares it to financial arrangements in other regions. It speaks specifically to the concerns of American, European and multilateral organizations, assessing the pros and cons for the global system of such regional financial arrangements.

Surveys the growing literature on monetary cooperation in East Asia (EA) that goes beyond the Chiang Mai Initiative. It compares and contrasts the various proposals for cooperation such as the Williamson basket peg, the Asian monetary system, and the yen block as to their crisis prevention impact and their feasibility, both economic and political. Also reviews the evidence on the readiness of EA and some of its proper subsets for a currency union in the light of experiences elsewhere, especially of European monetary cooperation. Chapters: currency unions and the European Monetary Union; current exchange rate regime and monetary cooperation in EA; proposals for monetary and exchange rate cooperation in EA; and costs and benefits of a monetary union in EA.

Significant changes have taken place in the major areas of ASEAN economic co-operation. In trade, AFTA has replaced PTA; in industry, AICO replaces AIC and AIJV; while in agriculture an enhanced Food Security Reserve Scheme is being developed. At the same time, new areas of economic co-operation, notably in services and intellectual property, have been mandated. This book will enable the reader to monitor ASEAN's development with better insight and clearer understanding. It will also give policy-makers a clearer perspective of the issues relating to regional economic co-operation and help chart future directions.

The member states of the South Asian Association for Regional Cooperation have set as a target the achievement of an economic union by 2020. Reaching this goal will require greater levels of monetary cooperation. How should this be achieved? Data from South Asia suggest that member states have minor trade linkages and face asymmetrical patterns of shocks. This paper concludes that, absent a clear road map for monetary cooperation, the present process must be structured so as to be harmonized with the level of regional economic integration.