The ASEAN+3 countries agreed on Sunday to set up a $120 billion emergency fund for use in an economic downturn.
The Chang Mai Initiative is the first independent move by Asia to create a network of Bilateral Swap Arrangements in order to manage regional short-term liquidity problems, and was initiated by ASEAN+3 countries after the 1997 Asian Financial Crisis.
We are pleased to announce that we have reached agreement on all the main components of the CMIM (Chiang Mai Initiative) and decided to implement the scheme before the end of the year," the finance ministers of ASEAN+3 said in a joint statement after talks alongside the Asian Development Bank (ADB) annual meeting in Indonesia.
Japan and China will contribute 38.4 billion dollars each, with China's share including 4.2 billion dollars from Hong Kong. South Korea was the next largest with 19.2 billion dollars.
Following the East Asian countries, the next biggest contributors were Indonesia, Singapore, Thailand and Malaysia, which agreed to provide 4.77 billion dollars, or 4 percent, each.
The Philippines committed to 3.1 per cent while Vietnam would contribute slightly lower than 1 per cent.
The fund is being created to replace current bilateral currency swap arrangements between the 13 countries, and is not meant to replace the IMF’s role in the region. The ministers were careful to explain the scheme was intended to "supplement" existing international financial institutions.
The Asian ministers stressed that the currency swap initiative met the region's two "core objectives" -- to address short-term liquidity difficulties and "supplement existing international financial arrangements."
Japan, the region's biggest economy, also announced a plan to supply up to 6 trillion yen ($61.54 billion) to support its neighbours in an economic downturn.
AFP, ASEAN, China, Japan, SKorea finalise crisis pact, 3 May 2009, http://www.google.com/hostednews/afp/article/ALeqM5gjvs9kCsNuS_RsMZf3wIM...
Reuters, Key Asian nations finalize details on crisis fund , 3 May 2009, http://www.reuters.com/article/ousivMolt/idUSTRE54208B20090503