China, Japan, South Korea and the 10 Southeast Asian states will launch an independent surveillance unit next year to monitor their economies for signs of financial stress, Vietnam said Wednesday. The launch of the unit is a crucial step in the implementation of a 120 billion dollar currency swap arrangement among the 13 countries, seen by analysts as a possible precursor to an Asian Monetary Fund.
Last month, ASEAN plus China, Japan and South Korea launched the currency swap agreement called the Chiang Mai Initiative Multilateralization Agreement, or CMIM, giving them a safety net against future liquidity shortages. The surveillance office will be launched in May 2011, Vietnam's finance ministry said in a statement released after a meeting central bank deputies and finance ministers of the Association of Southeast Asian Nations (ASEAN).
Named the ASEAN Plus Three Macroeconomic Research Office, or Amro, it will monitor economic developments in the region with a view to detecting potential risks and vulnerabilities. During a crisis, Amro will facilitate the timely activation of the swap arrangement by providing prompt assessment and updated information on the crisis-hit economy.
East Asia was hammered by a financial crisis in 1997 and 1998, prompting the Washington-based International Monetary Fund to organise multi-billion dollar bailouts for the stricken economies. But the tough conditions imposed by the IMF in exchange for the bailouts came under heavy criticism and gave rise to suggestions to pool the region's resources and set up an Asian Monetary Fund.
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