Asian countries could eventually double the
size of the Chiang Mai Initiative's resources again, as they grow more
comfortable with one another, the Association of Southeast Asian Nations'
(ASEAN) secretary general said Friday.
Speaking
on the sidelines of the World Economic Forum on East Asia in Bangkok, Surin
Pitsuwan told Dow Jones Newswires that the increased size and the mere
existence of the fund were illustrations of countries' confidence in their
neighbors.
Last
month, the 10 members of ASEAN along with China, Japan and South Korea agreed
to double to $240 billion the fund, which is designed to fight liquidity crises
and make the region less dependent on entities like the International Monetary
Fund.
Asked
whether he envisioned the fund growing to a size that would enable the region
to deal with crises without any external assistance, Pitsuwan pointed out that
members had agreed to double its size after only a couple of years.
"Eventually,
I think if we grow closer to each other and more confident among ourselves, it
can again double," he said.
"So
it will move in that direction, again gradually."
He
noted that China had an interest in the health of East Asian economies as much
as its own, and that Japan also had a strong interest in Southeast Asia, given
that its gross domestic product is increasingly dependent on the region.
The
initiative is an attempt to avoid a repeat of the type of liquidity crisis that
struck Asia in 1998. A country that needed assistance would draw on Asian
nations' pooled reserves to help it meet debt payments or finance international
trade.
No
country has yet sought to tap the Chiang Mai fund. But worries about fallout
from the debt problems in Europe prompted policymakers to conclude that the
$120 billion previously pledged to the fund wouldn't be sufficient.
On a
panel Friday, Asian Development Bank Managing Director Rajat Nag noted that the
fund still wouldn't be large enough to deal single-handedly with a crisis in
the region, but that the message sent by the enlargement was a very important
one.
"Yes,
it's not enough," Pitsuwan agreed at the time. "But it's enough as a
message to the world that the first line of defense will be from us and among
us."
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