Association of South-East Asian Nations (ASEAN), China, Japan, and South Korea (ASEAN+ 3) 

The 1997 Asian Financial Crisis caused various countries in the region to enhance financial cooperation, with different initiatives and mechanism to prevent and resolve economic crisis within the region.  

In 1999, ASEAN governments, along with China, Japan, and South Korea (ASEAN+ 3) together resolved to establish a “self-help and support mechanism”. Afterwards, ASEAN+ 3 Finance Ministers held a meeting in Chiang Mai and resolved to establish a regional financial assistance program, also known as “Chiang Mai Initiative” (CMI) as a Regional Financing Arrangement in the form of a network of Bilateral Swap Arrangements (BSAs). 

In 2007, ASEAN+ 3 Finance Ministers agreed to elevate the CMI from a bilateral to multilateral cooperation under the name “Chiang Mai Initiative Multilateralisation” (CMIM). CMIM fund was established as a mechanism for regional financial cooperation to provide liquidity in case of Balance of Payment or short term liquidity problems, and acted as additional financial support received from the IMF. CMIM is set up in the form of a Self-Managed Reserve Pooling Arrangement (SRPA), whereby member countries will contribute funding only when distressed countries request financial assistance. 

Moreover, ASEAN+ 3 members foresaw the problem with reliance on short term foreign currencies during a crisis. Therefore, they chose to develop the regional bond market to increase funding channels. As such, the Asian bond Markets Initiative (ABMI) was established in August 2003, which focused on local currency bonds and developing the bond market infrastructure. 

Currently, ASEAN+ 3 primary roles and responsibilities can be broken into 3 dimensions: financial cooperation, bond market development, and economic surveillance.  

1. Financial Cooperation or “Chiang Mai Initiative Multilateralisation” (CMIM) to provide financial liquidity for member countries facing Balance of Payment or short term foreign currency liquidity problems, both through the CIMIM Precautionary Line (CMIM-PL) and CMIM Stability Facility (CMIM-SF) with a total funding limit of 240,000 million USD. The ratio of contribution between ASEAN members and +3 economies (China, Japan, and South Korea) is 20:80. Thailand is committed to a maximum financial assistance of 9.100 million USD and is eligible for a maximum of 22,760 million USD in financial assistance. In this regard, the portion that members are eligible to receive from CMIM in case they do not apply for financial assistance from the IMF (de-linked portion) is 40% of the maximum limit that members can receive. Furthermore, if regional surveillance is operating efficiently, the aforementioned portion will increase. In addition, regarding agreement amended by March 2021, members are able to make local currency available for the provision of liquidity support.

2. The Asian Bond Market Initiative (ABMI) is comprised of 4 working committees that consider and promote regional bond market infrastructure across various areas. These are (1) Credit Guarantee and Investment Facility (CGIF) (2) facilitating local bond market demand (3) improving the regulation and procedures pertaining to regional bond markets and (4) improving relevant bond market infrastructure such as payment systems. 

3. The establishment of the ASEAN+3 Macroeconomic Research Office (AMRO) whose primary objectives are to monitor, assess, and report economic and financial conditions of member countries and the ASEAN+ 3 region. On 9th February 2016, AMRO was officially elevated to an international organization and is currently developing its operational capacities to provide more freedom in assessing member countries’ economic and financial conditions. 

The BOT plays a role in ASEAN+ 3 cooperation framework, along with the Thai Ministry of Finance, particularly in terms of CMIM and other issues that relate to economic monitoring. Furthermore, the BOT also has a role in various working committees within the ABMI. 

In 2019, Thailand Co-Chaired ASEAN+ 3 along with China, with the aim of supporting and promoting local currency usage within the region, particularly for trade and investment. This was also one of the BOT’s strategic plans. 

International Cooperation Framework

Additional Information

International Cooperation Team 1-2, International Cooperation Department, Corporate Relations Group