Race to Head 'Asian Monetary Fund' Heats Up

♠ Posted by Emmanuel in , at 10/11/2010 12:01:00 AM
A few months back, I discussed developments surrounding the creation of an ASEAN+3 Macroeconomic Research Office (AMRO) in Singapore. That post contains the back story behind the ill-fated Japanese proposal to create an Asian Monetary Fund in 1997 during the Asian financial crisis. At the behest of the haughty Americans who were wary of losing regional influence if a regional emergency lender emerged, unsubtle pressure forced the Japanese to back down. However, plans to create a regional lender have never entirely disappeared. First the Chiang Mai Initiative (CMI) was launched, a system of bilateral swaps among the ASEAN+3 (ASEAN's ten member states plus China, Japan, and South Korea). Later on, it became the Chiang Mai Initiative Multilateralization (CMIM) that is a $120 billion common pool of funds as opposed to a series of swaps.

Still, one of the odd preconditions for CMI (and CMIM after it) was that countries in this scheme could only get more money out than what they put in by first gaining an IMF seal of approval--probably a standby agreement. This situation was strange since regional emergency lending arrangements were originally meant to bypass the IMF and instead rely on good-neighbourliness in East Asia. In other words, it was again meant to placate certain Western powers. Hence, the establishment of an ASEAN+3 Macroeconomic and Research Office is important insofar as one of its envisioned roles is giving the "go" signal for disbursing emergency funds. That is, ASEAN+3 countries will no longer rely on the American-influenced IMF since AMRO in Singapore will decide on who gets what when and where.

The Thais are, for good reason, recognized as providers of diplomats in Southeast Asia. Supachai Panitchpakdi was formerly the director-general of the World Trade Organization and now heads the UN Conference for Trade and Development. Meanwhile, Surin Pitsuwan is the ASEAN secretary-general. As it now transpires, the deputy governor of the Bank of Thailand (their central bank), Bandid Nijathaworn, has quit his post in hopes of becoming AMRO's first head. After all, who wouldn't want to head our region's barely disguised 'Asian Monetary Fund' offshoot?
Bandid Nijathaworn has announced his resignation as the Bank of Thailand's deputy governor for monetary stability, effective at the end of November. Arkabusk Krairiksh, assistant governor for the management assistance group, said the central bank's board of directors approved Mr Bandid's resignation yesterday.

Mr Bandid said stepping down would allow him to be an independent applicant for the director of the Asean+3 Macroeconomic and Research Office (Amro), the regional office of the US$120 billion (3.7 trillion baht) Chiang Mai Initiative Multilateralisation Agreement. His departure was based on goodwill and he categorically denied his decision stemmed from internal conflicts or the fact he was not selected as governor of the BoT.

The Amro office was born out of the Asean+3 Finance Ministers and Central Bank Governors' meeting in December 2009. "Amro is an important organisation in the region. My application stands a good chance of forging cooperation between the BoT and the office," he told the Bangkok Post. "I decided to resign because I would like to pursue a new and challenging opportunity to play a key role in Amro as an independent candidate."
With such slow movement in including third world voices in IMF governance despite even Dominique Strauss-Kahn's agitation, it's certainly understandable as to why ASEAN+3 is keen on, yes, having a bank of our own. I can only assume that Bandid will be the first of many to try and become the 'AMF' chief.