The Chiang Mai Initiative and Its Multilateralization: Toward an Asian Monetary Fund?

As a regional self-help system of liquidity support established in the aftermath of the Asian crisis of 1997, the Chiang Mai Initiative (CMI) and its recent multilateralization have been touted in some quarters as important achievements in a region where institutionalized financial cooperation had been sorely lacking, taking East Asia one step closer to the resuscitation of the still-born Asian Monetary Fund. Against such a sanguine assessment, I argue that the significance of the CMI, even after its multilateralization, is largely limited to symbolism and its practical implications are inconsequential. Despite the progress associated with CMI multilateralization, the underlying political dynamics in the region render East Asia fundamentally incapable of producing a coherent regional solution to the recurring problem of global financial instability.