monetary and financial cooperation in east asia: the chiang mai initiative and beyond

7/28/2019 Monetary and Financial Cooperation in East Asia: The Chiang Mai Initiative and Beyond

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ECONOMICS AND RESEARCH DEPARTMENT

ERD WORKING PAPER SERIES NO. 6

Pradumna B. Rana

February 2002

Asian Development Bank

Monetary and Financial

Cooperation in East Asia:

The Chiang Mai Initiative

and Beyond


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ERD Working Paper No. 6

MONETARYAND FINANCIAL COOPERATIONIN EAST ASIA:

THE CHIANG MAI INITIATIVEAND BEYOND

Pradumna B. Rana

February 2002

Pradumna B. Rana is the Director of the Regional Economic Monitoring Unit of the Asian Development Bank.This paper w as present ed at the 2001 KIE P /NEAEF Conference on S treng thenin g Economic Cooperat ion

in Northeast Asia held 16-17 August 2001 in Honolulu, Hawaii. The views expressed in this paper are

those of the aut hor and do not necessarily represent th ose of the Asian D evelopment B an k. The aut hor is

grat eful to Char les Adam s, Srinivasa Ma dhur, J uzhong Zhua ng, and J osef Yap for their valua ble comments.


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MONETARYAND FINANCIAL COOPERATIONIN EAST ASIATHE CHIANG MAI INITIATIVEAND BEYOND

16

Asian D evelopment B ank

P.O. Box 789

0980 Manila

Philippines

2002 by Asian Development Bank

February 2002

ISSN 1655-5252

The views expressed in this paper

are those of the author(s) and do not

necessarily r eflect t he views or policies

of the Asian Development B ank.


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Foreword

The ERD Working Paper Series is a forum for ongoing and recently

completed resear ch an d policy st udies underta ken in the Asia n D evelopment B a nk

or on its behalf. The Series is a quick-disseminat ing, informal publica tion mean t

to stimula te discussion a nd elicit feedback. P a pers published under th is Series

could subsequ ently be r evised for publica tion a s a rt icles in professiona l journa ls

or chapters in books.


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Contents

Abst r a ct vii

I . I n t r oduct ion 1

I I. The C ase for a nd aga inst Monet ary a nd Fina ncia l C oopera t ion 2

A. Ca se for Monet a ry a nd Fina ncia l Coopera t ion 2

B . Ca se a ga inst Moneta ry a nd Fina ncia l Coopera t ion 3

C . C ha nged C ont ext 4

I I I . E volving Regiona l F ina ncia l Archit ect ure in E a st Asia 5

A. Informa t ion E xcha nge a nd S urveilla nce P rocesses 5

B . Mecha nisms for Resource P rovision 7

C . Th e C h ia n g M a i I n it ia t i ve of t h e AS E AN + 3 F in a n ce M in is t er s 8

IV. Beyond the Ch iang Mai In i t ia t ive: Coord ina t ion

of Ma croeconomic a nd E xcha nge Ra te P olicies 11

V. C onclus ion 12

R efer en ces 13


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Abstract

U nt il recently, not much a tt ention had been paid t o the need to promote

regiona l monetar y a nd finan cia l cooperat ion. This is sur prising a s cooperat ion

in fina nce provides more opportu nities for win-w in situa tions. How ever, t he

pace of moneta ry a nd fina ncial coopera tion ha s picked up in the postcrisis period.

Countries in Ea st Asia a ppea r to have must ered a certa in am ount of politica l

will to propel the process furth er. Cooperat ion ha s ra nged from informa tion

exchange a nd surveilla nce, to establishing regiona l financing facilities an d ear lywa rning systems. Beyond the Chiang Mai Initiat ive, efforts a re also under wa y

to coordinat e ma croeconomic an d exchange r a te policies ma inly under the ASE AN

Task Force on ASEAN Currency and Exchange Rate Mechanism of the Asia-

Eur ope Fina nce Ministers gr oup. As a regiona l development ba nk, t he Asian

Development B a nk is supporting t he efforts of its developing member count ries

to strengthen regional monetary and financial cooperation.


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I. Introduction

While a lot ha s been sa id an d wr itten on regionalism in tra de and t he need to promote

intraregional trade and investment, relatively less attention was paid, until recently,

to the need for promoting r egiona l moneta ry a nd fina ncial coopera tion (or a n ew regional

fina ncial a rchitecture). This is a bit sur prising beca use coopera tion in fina nce provides pa rt icipat ing

members more opport unit ies for w in-w in situa tions, since it does not involve loss of competit iveness

vis--vis tra ding partn ers and tra de diversion a s could coopera tion in tr a de and investment. Oneargument for focusing on trade cooperat ion is that the benefi ts from monetary and financial

cooperat ion increase w ith t he level of tr a de integra tion. How ever, others (Rose 2001, Glick a nd

Rose 2001, and P ersson 2001) ha ve shown t ha t joining a monetar y un ion could ha ve significant

multiplier effects on tr a de. Rose shows tha t t ra de betw een countries tha t sha re a common currency

is on avera ge more tha n thr ee times wha t w ould be predicted from a gra vity model of tra de. P ersson

has found similar benefits, but less than 300 percent.

In the postcrisis period, th e pace of moneta ry a nd fina ncial cooperat ion ha s picked up in

a n encoura ging manner a nd th e countries in Ea st Asia appear t o have mustered up a certa in

a mount of political will to propel the process further. S ome ma y disa gree with this a ssessment,

for example, by noting tha t only 10 percent of th e fina ncing ava ilable under the bila tera l swa ps

u n d e r t h e C h i a n g M a i I n i t i a t i v e (C M I ) a r e f r e e of I n t e r n a t i on a l M on e t a r y F u n d (I M F )

conditionalities. But once institutional arrangements are in place, increases in size and loosening

of conditions could perhaps be relatively easy and more a regional initiative. Swaps among the

G-10 central banks were often increased during the 1960s and 1970s.

In this context, this paper has two major objectives: (i) to review the evolving postcrisis

efforts to promote a new regional financial architecture in East Asia; and (ii) to identify activities

of va rious groups, such a s th e ASE AN, ASE AN+ 3 (AS EAN plus P eoples Republic of China [P RC ],

J a pan , a nd t he Republic of Korea [henceforth Korea]), a nd t he Asia-Eur ope Fina nce Ministers

(ASEM), which are presently under way to strengthen the process.

Ea st Asian policymakers are a wa re tha t a t t he present level of tra de, moneta ry, a nd labor

ma rket int egrat ion, a single currency is a t best a long-term objective. They a re, however, keento consolidat e the successes so fa r a nd to extend integrat ion furt her by identifying the tr a nsitional

steps in the areas of macroeconomic policy and exchange rate harmonization.

The paper is orga nized as follows: S ection II outlines the argum ents for and a ga inst moneta ry

a nd fina ncial coopera tion and how t he context has cha nged in the pa st yea r or so. It w ill be argued


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that the case for a new regional architecture extends beyond the perceived inadequacies of the

initial I MF prescription. Section I II reviews efforts to promote moneta ry a nd fina ncial cooperat ion

in East Asia by facilitating information exchange and establishment of regional surveillance systems

a nd by developing self-help regiona l finan cing mechan isms. Some see th e CMI n a rrowly a s th e

esta blishment of a net work of currency swa p arra ngements. The CMI actua lly goes beyond this

a nd r eflects the Ministers desire to str engthen informa tion excha nge a nd t he peer review process,

a nd t o further enha nce moneta ry an d fina ncia l cooperat ion w ithin t he region. The CMI, t ogether

w ith th e esta blishment of the ASE AN a nd th e ASE AN+ 3 Surveillan ce P rocesses, therefore, mar ks

a w a tershed in a new regional fina ncial architecture in Ea st Asia. Section IV review s ongoing

efforts to enhance cooperation beyond the CMI and harmonize macroeconomic and exchange rate

policies. Section V concludes with the role of the Asian Development Bank (ADB).

II. The Case for and against Monetary and Financial Cooperation

In the immedia te a ftermat h of the Asian crisis, a number of cases were made both for and

a gainst a new r egiona l f inancia l a rchitecture in t he region.

A. Case for Monetary and Financial Cooperation

1. Globalization and Spillover Effects

G lobalizat ion of commodity a nd fa ctor m a rkets ha s led to increa sed interdependence a mong

count ries. Tra nsborder cha llenges, including t he spillover of policies across na tiona l bound a ries,

ha ve become importa nt forces to contend w ith. These externa lities can be globa l (e.g., mala ria ,

HI V/AID S cont rol) or regiona l (e.g., controlling fina ncial conta gion). In t his cont ext, na tiona l a nd

interna tional policies ha ve to be complemented by regiona l responses, beca use a single country

cannot fully internalize the benefits and costs of i ts actions. Unfortunately, while the demand

for international public goods to countervail the negative externalities has increased, their supply

ha s t ended to decline in th e post-hegemonic world (G uerreiri an d F a laut a no 2000).

2. East Asian Crisis: A Type II Crisis

Initially the East Asian crisis ignited the debate between the macrofundamental and the

investor panic views. According to the former, the crisis resulted from weak macroeconomic

fundamentals; in other words, i t was a question of solvency. The competing view held that thecrisis w a s a n outcome of self-fulfil l ing prophecies a nd fina ncial pa nics, including ba nk ru ns a nd

outflow of hot money, because of structura l wea knesses in fina ncial a nd governa nce syst ems. The

consensus view fa vors th e crisis-of-confidence-cum-str uctura l w eakness sta nce (Ra na a nd Lim

1999, Ra na a nd Ya p 2001). The Ea st Asian crisis differed from previous crises in severa l key respects.


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Section IIThe Case for and against Monetary and Financial Cooperation

First i t wa s a capital a ccount crisis, not a tra ditiona l current a ccount crisis (Yoshitomi and Ohno

1999). Second, unlike other crises of confidence of the 1980s and 1990s, its root causes were

structural : premature financial sector l iberalization, weak governance, and policy mistakes in

managing private capital flows. Another important characteristic of the crisis was that financial

contagion tended to be mainly regional, requiring regional solutions.

3. Viners Stages of Economic Cooperation

Viner (1961), focusing on economies of scale, identified three stages of cooperation in

ascending order of sophistication: (i) trade cooperation, (ii) monetary cooperation, and (iii) full

economic union. Since the early 1990s many of the East Asian countries have made sustained

efforts to deregulat e an d open domestic markets. As a result , intra regiona l tra de an d investment

ha ve increa sed. In terms of importing countr y da ta , intr a regiona l tra de in Ea st Asia (ASE AN+ 3

a nd Ta ipei,China) wa s more tha n 50 percent of the regions t otal t ra de in 1998, even wh en ma ny

of the countries were in crisis. The benefits of such trade could be maximized by further effortsto promote monetary and financial cooperation.

4. Increased Dependence on Short-term Capital

Ea st Asia tra ditionally ha s ha d high levels of savings (about 30-40 percent). B eca use of

wea k na t iona l and regiona l capi ta l mar kets, these savings were invested in the more advan ced

industr ialized count ries a nd w ere recycled t o meet the d evelopment fina nce needs of th e region,

mainly in the form of short-term bank loans from industrialized markets. This led to the growing

vulnerabi l i ty of East Asian countries, and eventual ly precipi tated the crisis (Kuroda 1999).

Development of a regiona l ca pita l mar ket including a regiona l bond ma rket w ould, therefore, reduce

vulnerabili ty in the future.

B. Case against Monetary and Financial Cooperation

The idea of regiona l moneta ry a nd fina ncial coopera tion, especially t he Asian Moneta ry

Fund (AMF), was initially opposed by the IMF, European Union, and United States, for a number

of reasons.

1. Regional Approaches could Aggravate the Moral Hazard Problem

It is argued that the global economy does not need a proliferation of regional efforts asthese could lea d t o soft conditiona lity a nd a ggra vat e the moral h aza rd problem. While it is true

tha t r egiona l funds might find it difficult t o impose politica lly unpopular policies, mora l ha za rd

is not a problem associa ted only w ith r egiona l facilities. The IMF itself is not t ota lly immune to

this problem and the Council of Foreign Relations, among others, has alluded to the problem and


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a dvised t he IMF t o adhere consistently to normal lending l imits to redress the moral ha zard

problem.

2. Lack of Political Will in East Asia

The argument goes that the East Asian countries, while satisfying many of the criteria

for an optimum currency area, have not developed political conditions necessary for a durable

regiona l arr an gement , certa inly not a s much as Europe had accomplished w hen i t sta rted the

exercise. East Asia lacks integrationist thinking and the web of interlocking agreements that

encourage monetary and financial cooperation.

While the importance of preconditions cannot be denied, recent developments in East Asia

suggest tha t pol it ical integrat ion h a s become less of a constra int t ha n before ma inly because

democratic principles are taking root in the governance of these countries. East Asian central banks

are also acquiring a greater level of independence (Park 2001). East Asia is changing and may

be on th e brink of an historical evolution, as E urope w a s ha lf a century a go (B ergsten 2000). Ha vingsurvived the crisis, Ea st Asian countries ar e prepa red to set a side their differences a nd w ork together

to develop a self-help support mechanism, in an effort to prevent future crises.

3. Single Currency is Premature; Focus on Structural Reforms

The European experience emphasizes the need for satisfying preconditions and a relatively

long t ra nsition period. A typica l ar gument suggests t ha t E a st Asian countr ies should focus more

on fina ncial a nd corporat e reforms t o avoid futur e crises ra ther t ha n a single currency. While

this is a legitimat e argument, few Ea st Asia n policymakers a re na ive enough to believe tha t t hey

can establish a single currency in the near future. What they would like to do is to continue

the pace of moneta ry a nd finan cia l coopera tion a nd initiat e actions on the tra nsitiona l steps towa rd

a full monetary union, which is a long-term objective at this stage. Also reforms and regional

a rchitectur e a ddress t wo different sets of issues. While the former is oriented to efficiency a nd

growt h, the la t ter is a n a t tempt speci fical ly t ar geted to ma na ge if not prevent a crisis .

C. Changed Context

G ra dua lly th e situat ion ha s changed, and there is growing consensus tha t efforts t o promote

regional monetary and financial cooperation should be continued.

1. IMF and ASEM Support Regional Monetary and Financial Cooperation

In an interview la st yea r , Horst K ohler, IMF Ma na ging Director, commented tha t our

advice (to the East Asian region) is to pursue regionalization, not in opposition to the IMF, because

the IMF is a globa l institut ion, but t o do it in a complementa ry fa shion. Tha t is exactly wh a t is


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happening now and it makes a lot of sense (Fa r E aster n Economi c Revi ew14 J un e 2001, 48-

50). The ASEM Finance Ministers have also initiated the Kobe Research Project (see Section

IV).

A regional fina ncial coopera tive scheme such a s th e CMI could be structur ed to complement

the IMF in va rious wa ys. First , a regiona l facility could provide resources in addit ion to th a t provided

by the IMF while joining forces to work on matters related to the prevention and management

of financial crises. Second, i t could also support the work of the IMF by monitoring economic

developments in the region and taking part in the IMF's global surveillance activities. Finally,

competitive plura lism provides a menu of options to clients a nd pla ces t hem on th e driver's sea t.

2. Regionalism can Supplement Multilateralism

Any a rgument for regiona l arra ngements must begin by answ ering the most fundamenta l

quest ion of wheth er regiona l groupings, wh a tever forms t hey ma y ta ke, are conducive to, or likely

to interfere wit h, multilat eralism. Despite misgivings a nd t heir second best na ture, regiona l tra dingarrangements are increasingly being seen as building blocks rather than stumbling blocks for

a n integrat ing world. Some 170 regiona l tra ding ar ra ngements including bi lateral a reas ha ve

been r egistered w ith the WTO. The J a pan -Singa pore Fr ee Tra de Area (FTA) wa s signed recent ly.

Others being studied or negotiat ed in the Asian a nd P a cific region a re KoreaJ a pan F TA, Korea

P RC FTA, PR CASE AN FTA, Korea AS EAN FTA, and ASE AN+ 3 FTA. There is n o evidence

suggest ing tha t a n Ea st Asian f inancial a rran gement wi l l be oriented toward a wi thdra wa l from

the global economy a nd hence erect ba rriers to global fina ncial integra tion. The IMF Ma na ging

Director a grees tha t t he IMF ha s increa sed its support for regiona l cooperat ion a nd integra tion,

a s a wa y t o promote str ong policies a nd instit utions in neighboring countr ies a nd st epping stone

towa rd successful integra tion into global m a rkets (Kohler 2001).

III. Evolving Regional Financial Architecture in East Asia

Efforts t o promote monetar y a nd fina ncial coopera tion in Ea st Asia ha ve focused on tw o

a reas: informa tion excha nge a nd sur veillan ce processes, and resource provision mechan isms.

A. Information Exchange and Surveillance Processes

1. Manila Framework Group

The Manila Framework Group was established in November 1997, when the proposal for

the AMF w a s shot down, for t he overriding purpose of regiona l surveilla nce. This G roup meets

semiannually and brings together deputies from the finance ministries and central banks of 14

countries, both within and outside the Asian and Pacific region. In these meetings, ADB, IMF,

Section IIIEvolving Regional Financial Architecture in East Asia


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a nd World B a nk provide surveillan ce report s. Austr a lia is now coordinat ing a working group to

explore the possibility of establishing a regional financing facility under this Group. The proposal

was discussed at the meeting of the Group in New Zealand in December 2001.

2. ASEAN Surveillance Process

In October 1998, the ASEAN Finance Ministers signed a Terms of Understanding that

esta blished the ASEAN Sur veillance Pr ocess. B a sed on the principles of peer review a nd mu tua l

interest a mong ASE AN member count ries, the overa ll purpose is to strengt hen t he capa city of

policy making within the ASEAN group. In addition to the usual monitoring of exchange rates

a nd ma croeconomic aggregat es, the ASE AN Surveillance Pr ocess monitors sectora l an d social policies,

and includes provis ions for capaci ty bui ld ing , ins t i tu t ional s t rengthening , and shar ing o f

informa tion. The ASEAN Fina nce Ministers m eet tw ice a year for policy coordinat ion un der th e

ASE AN S urveilla nce P rocess.

The ASEAN Surveillance Process is an important initiative by a group of developing

countries to exchange information on economic developments and policies, and to consider individual

a nd collective responses to event s th a t could negat ively impact su bregional economic w ell-being.

3. ASEAN+3 Surveillance Process

The ASE AN+ 3 group wa s forma lized in November 1999 a nd t he first peer review meeting

under t he ASE AN+ 3 Surveilla nce Process w a s held in May 2000 in the sidelines of ADB s Annua l

Meeting. The ASE AN+ 3 Surveilla nce Pr ocess is similar t o the ASEAN Surveillance P rocess a nd

under it th e Finance Ministers of th e 13 countr ies a nd th e Secreta ry G eneral meet tw ice a yea r

for policy coordination.

4. Monitoring Capital Flows

A joint ADB /ASE AN S ecreta ria t Workshop on Monitoring P riva te C a pi ta l Flows in

ASE AN+ 3 wa s held on 26-27 April 2000. Subsequently, a dra ft da ta templat e ha s been developed

to monitor ca pita l (especia lly short-term) flow s to th e region a nd fina ncial ma rkets. The templat e

is being fina lized a nd implemented.

5. Establishment of the ASEAN+3 Early Warning Systems

The establishment of ASE AN+ 3 ea rly w a rning systems w as alluded to in t he communique

of the ASE AN+ 3 Fina nce Ministers Meeting in Honolulu in Ma y 2001. ADB is now implementing

a technica l assist a nce to support collabora tive efforts a mong the ASE AN+ 3 countries lea ding to

t h e d e v e l o p m e n t o f a r e g i o n a l e a r l y w a r n i n g s y s t e m t h a t w o u l d h e l p d e t e c t e m e r g i n g


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macroeconomic, financial, and corporate sector vulnerabilities, in an attempt to prevent financial

crises in th e future. The technica l ass ista nce will fina nce: (i) th e development of an ear ly w a rning

prototype based on existing a pproa ches of the IMF, t he aca demic commun ity, a nd va rious countries;

(ii) the identification of a core set of macroprudent ial indicat ors releva nt to esta blishing an ear ly

warning system; and (iii) workshops to finalize, disseminate, and implement the prototype model

a mong the ASE AN+ 3 count ries.

B. Mechanisms for Resource Provision

1. Asian Monetary Fund/ Regional Financing Facility

The notion of regiona l moneta ry cooperat ion in Asia w a s intr oduced initially by J a pan

in September 1997. A $100 billion fund was to be created, half of which was to be provided by

J a pan a nd the remainder by P RC; Hong Kong, China; Singapore; and Taipei,China . It w a s argued

th a t t his w ould provide sufficient liquidity th a t could be quickly mobilized to foresta ll speculat iveattacks on the region's currencies. Despite the strong support of Malaysia, the idea was turned

down at the Fi fth Asia P aci f ic Economic Coopera t ion Meeting in Ma nila. I t wa s a rgued tha t a

regiona l fund w ould unn ecessarily duplica te IMF s a ctivities a nd lead to moral ha zar d problems.

However, the regional monetary fund or an equivalent structure continues to feature

prominently in regiona l consulta tive meetings, a nd in a cademic pa pers and a rticles. A Regiona l

S t a b i li t y F orum w a s proposed by H a ji m e Sh i noha ra (1 99 9) of t he J a panese Ins t i t u t e for

Int erna tional Moneta ry Affairs to (i) promote r egiona l policy d ialogues, (ii) esta blish a mecha nism

for emergency f inancial support , and ( i i i ) prevent future crises through regional economic

surveilla nce a nd cooperat ion.

The ADB Institute in Tokyo and the Asia Policy Forum network that i t has established

have similarly suggested the establishment of a regional financing arrangement to (i) serve as

a lender of last resort, (ii) provide effective regional surveillance, and (iii) promote financial and

corporate restructuring (Yoshitomi and Shirai 2000).

The need for a regiona l moneta ry scheme ha s a lso been a prominent feat ure of discussions

outside of Asia. Former Vice-Minister of Germany Heiner Flassbeck (1999) was among the first

to suggest t ha t Asia sh ould ha ve a joint supervisory/a cademic body a s a precursor to a regiona l

currency regime. The body could undertake economic surveillance and advise governments, in

addition to prompting and coordinating their responses. It could even provide liquidity to countries

during financial crises.

The belief that the IMF could not monitor and respond appropriately to crises has led Wade

and Venoroso (1998) to support a regional fund. They make a strong case for the creation of AMF,suggesting t ha t it could build on Asias sa ving surplus, foreign exchange reserves, a nd net-creditor

status (including reserves and Treasury bills). The AMF could also raise the necessary funds for

its core financing from subscriptions by m ember government s.



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Andrew Rose of the US Federal Reserve Ba nk of Sa n Fr a ncisco is a lso in favor of esta blishing

a regiona l moneta ry fun d pa ra llel to the I MF. Rose (1999) notes tha t currency crises tend t o be

more regiona l a nd sprea d a long t he lines of tra de linka ges, disrupting regiona l tra de flows. Since

currency crises create regional costs, the region would have an incentive to mitigate these by

providing a f inancia l safety net .

The IMF B oard of Directors reitera ted in its meeting of September 1999 tha t sur veillan ce

should pa y more at tent ion to the vulnera bilities of individua l countries and t o the intern a tional

a nd regional a spects of surveilla nce. As discussions on a regiona l moneta ry fun d ga in impetus,

the I MF a ppea rs t o favor th e regiona l surveilla nce process over a regiona l fund, w hile not completely

ruling out a regiona l fund t ha t could complement the I MFs efforts in th e region in t he longer

term. The J oint Ministeria l St a tement of the seventh AP EC Fina nce Ministers Meeting a lso noted

that cooperative financing arrangements at the regional level designed to complement resources

provided by the IFIs in support of IMF programs can be effect ive in crisis prevention and

resolution(Bandar Seri Begawan, Brunei Darussalam 9-10 September 2000).

C. The Chiang Mai Initiative of the ASEAN+3 Finance Ministers

At t heir Ma y 2001 meeting held in Chia ng Ma i, in the sidelines of the ADB Annua l Meeting,

the ASE AN+ 3 Fina nce Ministers ca me up wit h the CMI . In a ddition to reiterat ing the need for

str engthened policy d ialogues an d regional coopera tion a ctivities, th e CMI called for:

(i ) An expanded ASEAN Swap Arrangement that w ould include a l l ASEAN countr ies

a nd a netw ork of bila tera l swa p and repurchase agr eement fa cilities am ong ASE AN

countr ies , PRC , J apa n , and Korea .

(i i) Use of the ASEAN+ 3 framework to promote the exchange of consistent and t imely

dat a a nd informa tion on capi ta l f lows.

(iii) E s t a b li s h m en t of a r e gi on a l f in a n c i n g a r r a n g em e n t t o s u pp le m en t e xi s t in g

interna tional fa cili ties.

(iv) Esta bli shment of an appropr ia t e mechanism (ear ly wa rning sys tem) tha t could

enha nce the a bili ty t o provide sufficient a nd timely finan cia l sta bili ty in th e Ea st

Asian region.

Notable progress has been achieved in each of the above areas.

1. Expanded ASEAN Swap Arrangement and Network of Bilateral Swaps

and Repurchase Agreements

Subsequent t o the Chian g Ma i meeting, the deputies of the ASE AN+ 3 negotiat ed the deta ils

tha t produced the fram ework paper for th e ASA and B SA. This fram ework paper wa s approved


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in a meeting of the deputies in Beijing in November 2000.

a. Expanded ASEAN Swap Arrangement (ASA)

In 1997, five ASEAN countries (Indonesia, Malaysia, Philippines, Singapore, and Thailand)

agreed to establ ish the ASA to provide l iquidi ty support for the part icipat ing countries that

experience balance of payments difficulties. In November 2000, the ASA was expanded to cover

a ll ASE AN members a nd t he tota l a mount w a s a lso increased from $200 million t o $1 bill ion.

U nder the ASA, apar t from the U S dolla r, other currencies ava ilable include the yen a nd

euro, w ith euro yen an d euro LIB OR interest ra tes, respectively, a s the a pplica ble ba se rat es. The

contr ibutions from part icipat ing count ries are cha ra cterized into tw o groups based on their a bility

to pay (Table 1):

Table 1. Contributions to ASA

Group 1 Amount ($ million)B runei, I ndonesia , Ma la ysia , P h ilippines, 150 E a ch

S inga pore, Tha ila nd 41.5

Group 2Viet Na m 60

Mya nma r 20

C a m bod ia 15

La o P eople's D emocra t ic Republic 5

The maximum dra wd own a mount by each par ticipat ing member rema ins limited to tw ice

their committed amount under the ASA. The swap transactions have a maturity not exceeding6 months, subject to rollover for a period not exceeding 6 months.

b. Network of Bilateral Swaps and Repurchase Agreements (BSA)

The B SA is a fa cility designed to provide short -term liquidity a ssista nce in t he form of swa ps

of US dollars w ith t he domestic currencies of a part icipating country . P a rticipat ing countries can

draw on the BSA for a period of 90 days. The first drawing may be renewed seven times. The

interest ra te a pplica ble to the dra w ing is the LIB OR plus a premium of 150 ba sis points for the

first a nd t he f i rst renewal dra wings. Thereaft er , the premium is increased by a n a ddi t iona l 50

ba sis points for every t w o renewa ls, but not exceeding 300 basis point s. While the fra mework pa per

lay s out t he ba sic principles, each bilat eral a greement could be slight ly different.

The B SA is complementa ry t o the IMFs a ssista nce in tha t countr ies draw ing from th e facility

a re required to accept an IMF progra m for macroeconomic a nd st ructura l adjustment. The B SA,

however, a llows a n a utomat ic disbursement of up to 10 percent of the ma ximum a mount of draw ing



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10

wit hout a ny linka ge to an IMF program or conditiona lity. This limit is t o be increa sed as the region

develops its own surveilla nce ca pacity.

Repurchase a greements (Repo) are a lso to be esta blished t o provide short-term liquidity

to a part icipating m ember t hough the sa le and buyback of appropriat e securities. Securities eligible

under the Repo a greements a re U S Treasury notes or bills w ith a remaining life of not more tha n

5 years and government securities of the counter party country of the Repo.

After the ASE AN+ 3 summit in November 2000, P RC, J a pan , and K orea bega n negotia ting

BSAs with the ASEAN countries. So far, five BSAs have been signed, three other BSAs are to

be signed in the next few months, and four other BSAs are under negotiation (Table 2).

Ta ble 2. Bilateral Swap Agreements

Agreement s D a t e S igned Am ount s ($ B illion)

Signed

J a pa n -K orea 4 J uly 2001 2+ 5a

J a pa n-Tha ila n d 28 J u ly 2001 3

J a pa n-P h ilippin es 30 August 2001 3

J a pa n -Ma la ysia 5 Oct ober 2001 1+ 2.5a

P RC -Tha ila nd 6 D ecem ber 2001 2

Soon to be Signed

J a pa n-P RC 3

K orea -P RC 2

K orea -Tha ila nd 1

Negotiation in Progress

Korea-MalaysiaKorea-Philippines

P R C - M a la ys i a

PRC-Philippines

a Un der t h e N ew Miyazaw a I n i t ia t i v e

For a discussion of ASE AN+ 3 efforts t o monitor privat e ca pita l flow s an d establish a n

ASE AN+ 3 Ea rly War ning Syst em, see Sect ion I II .

2. Establishment of a Regional Financing Facility

The swa p arr a ngements t ha t a re in place between the ASE AN countries an d the ASE AN+ 3

group will be util ized only w hen one or severa l count ries encounter short-term a nd t empora ry

ba lance of payment s difficulties, a situa tion tha t ma y or may not a rise in the nea r future. To enha nce


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11

cross-border financial interactions within the framework of existing financing facilities, the ASEAN

Secreta riat ha d commissioned a study on Regiona l Finan cing Arrangement . This study ha s

recommended tha t ea ch moneta ry a uth ority set aside a modest percenta ge, sa y 5 percent, of its

interna tional reserves an d pla ce the funds w ith th e other 12 centr a l banks on a pro ra ta basis,

to be determined by some equita ble formula . This mult icurrency pla cement is designed to a chieve

the d ua l objective of increasing the r ole of currencies w ithin t he region w hile decreasing tha t of

outside currencies. The proposa l is also to let ea ch count ry borrow multiples of the pla cement a mount ,

a concept similar to the much pra cticed ma rgin loans in t he securities business.

3. Monitoring/Surveillance Unit and Decision-making Body

As a lready discussed, at th e inst itutiona l level, effort s a re being ma de to esta blish ea rly

w a rning syst ems and t o monitor short-term capita l flows. A stud y group has a lso been set up to

identify a Monitoring or Sur veillance Un it for t he successful implementa tion of the C MI. This U nit

will monitor:

(i ) l iquidity posit ions as well as economic fundamental s of it s member countr ies

(ii) im plem ent a t i on of com m on s t andards ag reed am ong m em bers

(iii) poli cy im pl em ent a t i on and reform s

(iv) coordinat ion a nd ha rmonizat ion of economic pol icies a mong the member countries

Efforts are being made to establish a decision-making body for the CMI.

IV. Beyond the Chiang Mai Initiative:

Coordination of Macroeconomic and Exchange Rate Policies

Efforts are also under way to go beyond the CMI and coordinate macroeconomic and

exchange rate policies. For example, an ASEAN Task Force on ASEAN Currency and Exchange

Rate Mechanism was established in March 2001 and its deliberations are continuing. Additional

impetus t o this w ork is being provided under t he Kobe Resear ch P roject, w hich is an initiat ive

of the Asia-Europe Finance Ministers group.

At t heir meeting in J a nua ry 2001, the ASE M Fina nce Ministers encoura ged cooperat ive

activities in economic and financial areas, such as sharing experience and lessons in fostering

regiona l economic a nd moneta ry coopera tion, exchange r a te regimes, an d public debt ma na gement.

Under the Kobe Research Project a large number of studies are being undertaken by

institut ions/individua ls in Asia a nd E urope to furth er enha nce moneta ry a nd fina ncial cooperat ionin the Asian region. The ADB is conducting a Study on Monetary and Financial Cooperation

in East Asia (RETA 6000). Three in-depth technical core studies have been commissioned on:

(i) informa tion excha nge, surveillance systems, a nd institut iona l a rra ngements; (i i) mecha nisms

for resource provision including multilateralization of the CMI swap agreements and regional

Section IVBeyond the Chiang Mai Initiative: Coordination of Macroeconomic and Exchange Rate Policies


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12

finan cing fa cili ties; an d (ii i) tra nsitional regiona l exchan ge rat e arr a ngements a nd coordinat ion

mecha nisms. The empha sis is on identifying the tr a nsitional steps tha t could perha ps facili ta te

the adoption of a single currency in the long term.

At a recent lectur e at ADB , Robert Mundell (2001) a rgued th a t eventu a lly Asia needs a

common currency like the euro. In t he interim, h owever, some tr a nsitional r egiona l cooperat ive

arrangement (e.g., a parallel currency to be used for international transactions) could be considered

to bring about greater coherence of macroeconomic policies across countries.

Eichengreen an d B a youmi (1999) ha ve calcula ted a n optimum currency index (ba sed on

trade patterns, openness, nature of disturbance) for East Asia and found that this index is not

very different from wh at i t w a s in Europe before the Maa stricht Treat y w a s signed. B ay oumi a nd

Ma uro (1999) a nd P lummer (2001) ha ve rea ched a s imila r conclusion for th e ASE AN count ries.

All of th em a rgue a lso tha t some of the condit ions for successful economic int egra tion a re endogenous,

i .e., they arise after financial cooperation is initiated.

V. Conclusion

In the postcrisis period, there ha s been a significa nt change in th e thinking of East Asian

policymakers in developing a new regional financial architecture by promoting self-help efforts.

In t his context t he esta blishment of the ASEAN an d ASE AN+ 3 Surveilla nce Processes ar e not

only historic but a lso regiona l wa tersheds. So is the Chia ng Ma i Initia tive. Efforts a re also being

ma de to expand th e CMI t o ha rmonize macroeconomic and excha nge ra te policies. Politica l will

ha s t o be developed for more concerted a ctions. The Ma croeconomic Monitoring G roup of Mercosur

in Sout h America ha s set convergence ta rgets t o be met by th e end of 2002. Simila rly, t he Economic

Community of West African S ta tes is head ing for a full moneta ry un ion by 2003 and 2004. Ea st

Asia has to catch up with these other subregions.

As a regional development bank, ADB continues to support the efforts of the ASEAN,

ASE AN+ 3, ASE M, an d Ma nila Fr a mework groups. In ea rly 1999, ADB esta blished the Regiona l

Economic Monitoring Unit (REMU) to support regional monetary and financial cooperation. REMU

provides high frequency monitoring inputs to meetings of the Ma nila Fr a mework Gr oup a nd t he

ASE AN a nd ASEAN+ 3 Fina nce Ministers. Through capa city building activities, REMU a ssists

in esta blishing a netw ork of institut ions t o support th e ASE AN Su rveillan ce P rocess involving

Na tional S urveillance Un its in t he Ministries of Fina nce, th e ASE AN S urveillance Coordina tion

U nit a t the ASEAN S ecretar iat , an d th e ASE AN S urveil lan ce Technical S upport U nit a t ADB .

REMU is support ing regional ini t iat ives in the monitoring of short-term capi tal f lows and

esta blishment of early w a rning systems. REMU a lso ma inta ins and develops the Asia RecoveryIn forma tion Cent er w ebsite (ht tp://a ric.adb.org) and prepar es the q ua rt erly Asia Economic Monitor

report. REMU is conducting special st udies on t opics relat ed to regiona l moneta ry a nd fina ncia l

cooperat ion, including a study to develop a roa dma p of policy options t o ca rry forw a rd t he on-

going moneta ry a nd fina ncial cooperat ion efforts in E a st Asia a s par t of the Kobe Research P roject

of the Asia-Europe Finance Ministers.


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13

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16

Countries

Jennif er Sour, Mar ch 1984

No. 27 Economic Scene in Asi a and I t s Speci a l Fea tures

Kedar N . Kohli , November 1984

No. 28 The Ef fec t of Terms of Trade Changes on the

Bal ance o f Payments and Real Nat iona l

Income of Asian Developing Countries

Ju ngsoo Lee and L utgar da L abios, J anuar y 1985

N o. 29 C a u s e a n d E f f ect i n t h e Wor l d S u g a r M a r ke t :

Some Empirical Findings 1951-1982

Yoshi hi ro Iw asaki, Februar y 1985

N o. 30 S ou r ce s of B a l a n ce of P a y m e n t s P r o bl emin the 1970s: The Asian Experience

Pradum na Rana, February 1985

N o. 3 1 In d ia s M a n u f a ct u r ed E x p or t s : An An a l y si s

of Supply Sectors

I fzal Al i , February 1985

N o. 32 M ee t in g B a s i c H u m a n N ee d s i n As ia n

Developing Countries

Ju ngsoo L ee and Em ma Ban ari a, Mar ch 1985

N o. 33 Th e Im pa c t of F or e ig n C a p it a l In f low

on Investment and Economic Growth

in Developing Asia

Evelyn Go, May 1985

No. 34 The Cl imate fo r Energy Development

in the P aci f ic and Asian Region:

Priori t ies and Perspect ives

V.V. Desai , Apri l 1986

No. 35 Impac t of Appreci a t i on o f the Yen onDeveloping Member Countries of the B ank

Ju ngsoo Lee, Prad um na Rana, and Ifzal Al i,

M ay 1986

No. 36 Smuggling and Domest i c Economic Po l ici es

in Developing Countries

A.H .M.N . Chowdhur y, October 1986

N o. 3 7 P u b li c In v es t m en t C r i t er i a : E con om ic In t er n a l

Rate of Return and Equal izing Discount Rate

If zal Ali , November 1986

No. 38 Review o f the Theory o f Neoc lass i ca l P o li t ic a l

E conomy: An Applicat ion to Tra de P olicies

M .G. Quibr ia, D ecember 1986

No. 39 Fac tors In f luencing the Choice of Loca t ion :

Local and Foreign Firms in the Phi l ippines

E.M. Perni a and A.N. H err in, Februar y 1987

No. 40 A Demographic Perspec t ive on Developing

Asia and Its Relevance to the BankE.M . Pern ia, M ay 1987

N o. 41 E m e rg in g I s su es i n As ia a n d S o ci a l C o st

Benefi t Analysis

I. A li , September 1988

N o. 42 S h if t in g R ev ea l ed C o mp a r a t iv e Ad v a n t a g e:

Experiences of Asian and Pacific Developing

Countries

P.B. Ran a, November 1988

N o. 43 Ag r icu lt u r a l P r i ce P o li cy i n As ia :

Issues a nd Areas of Reforms

I. Al i, N ovember 1988

No. 44 Serv ice Trade and Asi an Developing Economies

M .G. Quibri a, October 1989

No. 45 A Review o f the Economic Analys i s of Power

Projects in Asia and Identification of Areas

of Improvement

I. Al i, N ovember 1989N o. 46 G r o w t h P e r sp ect i ve a n d C h a l le n ge s for As ia :

Areas for Policy Review and Research


N o. 4 7 An Ap pr oa c h t o E s t im a t i n g t he P ov er t y

Alleviation Impact of an Agricultural Project

I . Al i , January 1990

N o. 4 8 E c on om ic G r ow t h P e rf or m a n ce of In d on e si a ,

the Phi l ippines, and Thai land:

The Human Resource Dimension

E.M. Perni a, Januar y 1990

N o. 4 9 F or e ig n E x ch a n g e a n d F i sca l Im p a ct o f a P r oje ct :

A Methodological Framework for Estimation

I . Al i , Februar y 1990

N o. 50 P u b li c In v es t m en t C r it e ri a : F i na n c ia l

and Economic Internal Rates of Return

I. Al i , Apr i l 1990

N o. 51 E v a l ua t i on o f Wa t e r S u pp ly P r o je ct s :

An Economic FrameworkArl ene M. Tadl e, Ju ne 1990

N o. 5 2 In t e rr e la t i on s h ip B e t w e en S h a d o w P r i ce s, P r o je ct

Investment , and Pol icy Reforms:

An Analyt ical Fra mework


No. 53 Issues in Assess ing the Impac t of Pro ject

and Sector Adjustment Lending

I . Ali , December 1990

N o. 54 S om e As pe ct s of U r ba n i za t i on

and the Environment in Southeast Asia

Er nesto M. Pern ia, J anuar y 1991

N o. 55 F i n a n ci a l S e ct or a n d E c on om ic

Development: A Survey

J un gsoo L ee, September 1991

N o. 5 6 A Fr a m e w or k f or J u s t if y in g B a n k -As s is t ed

Education Projects in Asia: A Review

of the Socioeconomic Analysisand Identification of Areas of Improvement

Et ienne Van De Wall e, Febru ar y 1992

N o. 57 M ed iu m -t e rm G r o w t h -S t a b i li za t i on

Relationship in Asian Developing Countries

and Some Pol icy Considerat ions

Yun-Hw an K im, February 1993

N o. 58 U r b a n i za t i on , P op ul a t ion D i st r ib u t ion ,

and Economic Development in Asia

Er nesto M. Perni a, Februar y 1993

No. 59 The Need fo r F i sca l Conso lida t ion in Nepal :

The Results of a Simulation

Fil ippo di Maur o and Ronald Antonio But iong,

Jul y 1993

N o. 6 0 A C om p ut a b le G e n er a l E q u i li br i um M od el

of Nepal

Timothy Buehrer and Fi l i ppo di M auro,

October 1993No. 61 The Role o f Government in Expor t Expansion

in the Republic of Korea: A Revisit

Yun-Hw an K im, February 1994

N o. 62 R u ra l R ef or m s, S t r uct u ra l C h a n ge ,

and Agricul tural Growth in

the Peoples Republic of China

Bo Lin , August 1994

No. 63 Incent ives and Regula t ion for Po l lu t ion Abatement

wit h a n Applicat ion to Was te Wat er Trea tment

Sudipto M undl e, U. Shankar,

and Shekhar M ehta, October 1995

N o. 64 S a v i ng Tr a n s it i on s i n S ou t h ea s t As ia

Frank H arr i gan, February 1996

N o. 6 5 Tot a l F a c t or P r o d uct i vi t y G r ow t h i n E a s t A si a :

A Critical Survey

Jesus Feli pe, September 1997

N o. 66 F or ei gn D ir e ct In ve st m en t in P a k i st a n :Pol icy I ssues an d Operat ional Implicat ions

Ashfaque H. Khan and Yun-Hw an Ki m,

Ju l y 1999

No. 67 Fi sca l Po li cy, Income Dis t r ibut ion and Growth

Sai lesh K. Jha , November 1999


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17

N o. 1 I nt er na t ion a l R es er ves :

Factors Determining Needs and Adequacy

Evelyn Go, May 1981

N o. 2 D om es t ic S a v i ng s i n S e le ct e d D e ve lop in g

Asian Countries

Basi l M oore, assisted by

A.H.M. Nur uddi n Chowdhury, September 1981

N o. 3 C h a n g es i n C o ns u mp t ion , Im p or t s a n d E x por t sof Oil Since 1973: A Preliminary Survey of

the Developing Member Countries

of the Asian Development B ank

Dal H yun K im and Graham Abbot t ,

September 1981

N o. 4 B y -P a s s e d Ar e a s , R eg ion a l In e q ua l it i es ,

and Development Policies in Selected

Southeast Asian C ountries

Will iam Jam es, October 1981

No. 5 Asi an Agr i cul ture and Economic Development

Wil l i am J ames, March 1982

N o. 6 In f la t i on in D ev el op in g Me mb er C ou n t r ie s:

An Ana lysis of R ecent Trends

A.H.M. Nurudd in Chowdhuryan d

J. Malcolm Dowling,Mar ch 1982

N o. 7 I n du st r ia l G r ow t h a n d E m pl oy m en t in

Developing Asian Countries: Issues andP erspect ives for th e Coming D ecade

Ul r i ch Hi emenz, Mar ch 1982

N o. 8 P e t r od ol la r R e cy cl in g 19 73 -1 98 0.

Part 1: Regional Adjustments and

the World Economy

Burn ham Campbel l , Apr i l 1982

N o. 9 D e ve lop in g As ia : Th e Im p or t a n ce

of Domestic Policies

Economi cs Offi ce Staff u nder th e directi on

of Seij i N aya, May 1982

N o. 10 F in a n ci a l D ev el op m en t a n d H o u se h ol d

Sa vings: Issues in Domest ic Resource

Mobilization in Asian Developing Countries

Wan-Soon Kim , Jul y 1982

No. 11 Indust r i a l Development : Role o f Speci a l ized

Financial Inst i tut ions

Kedar N. K ohl i , August 1982No. 12 Pet rodol lar Recycl ing 1973-1980.

Par t I I : Debt Problems and an Eva lua t ion

of Suggested Remedies

Bur nham Campbell, September 1982

N o. 13 C r e di t Ra t i on in g , R u r a l S a v i ng s , a n d F in a n ci a l

P olicy in Developing Count ries

Will iam Jam es, September 1982

N o. 14 S m a l l a n d M ed iu m -S ca l e M a n u fa c t ur in g

Esta bl ishments in ASE AN Countries:

P erspect ives a nd P olicy I ssues

M athias Bruch and U lr ich Hi emenz, M arch 1983

N o. 15 In com e D is t r ib u t ion a n d E c on om i c

Gr owth in Developing Asian Countries

J. M alcolm Dowli ng and David Soo, M arch 1983

N o. 1 6 Lon g -R u n D e bt -S e r vi ci n g C a p a ci t y of

Asian Developing Countries: An Application

of Cri t ical Int erest Ra te ApproachJ un gsoo Lee, Ju ne 1983

N o. 17 E x t er n a l S hock s , E n e r gy P o li cy,

and Macroeconomic Performance of Asian

Developing Countries: A Policy Analysis

Wil l i am J ames, Jul y 1983

N o. 18 Th e Im p a ct of t h e C u r r en t E x ch a n g e R a t e

System on Trade and Inflat ion of Selected

Developing Member Countries

Prad umn a Rana, September 1983

No. 19 Asian Agr i cul ture in Transi t i on : Key Po li cy Issues

Will iam Jam es, September 1983

N o. 2 0 Th e Tr a n s it i on t o a n In d u s t r ia l E c on om y

in Monsoon Asia

H arr y T. Oshim a, October 1983

No. 21 The S igni fi cance o f Of f-Farm Employment

and Incomes in Post-War Ea st Asian G rowth

Har ry T. Oshima, Januar y 1984

N o. 2 2 In com e D i st r ib u t ion a n d P o ve r t y in S e l ect e d

Asian CountriesJohn M alcolm Dowl in g, Jr., November 1984

No. 23 ASEAN Economies and ASEAN Economic

Cooperation

Nar ongchai Akr asanee, November 1984

No. 24 Economic Analys i s o f Power Pro ject s

Ni t in D esai, Januar y 1985

No. 25 Expor t s and Economic Growth in the Asi an Region

Pradum na Rana, Februar y 1985

N o. 26 P a t t e rn s of E xt e r na l F in a n ci n g of D MC s

E. Go, May 1985

No. 27 Indust r i a l Techno logy Development

the Republic of Korea

S.Y. Lo, Ju ly 1985

N o. 2 8 R is k An a l y si s a n d P r o je ct S e l ect i on :

A Review of Practical Issues

J.K . Johnson, August 1985

N o. 2 9 R ice i n In don e si a : P r i ce P o li cy a n d C o m pa r a t i v eAdvantage

I . Al i , Janu ary 1986

N o. 3 0 E f f ect s of F or e ig n C a p it a l In fl ow s

on Developing Countries of Asia

Ju ngsoo Lee, Pradum na B. Ran a,

and Yoshihiro I wasaki, Apr i l 1986

No. 31 Economic Analys is of the Env i ronmenta l

Impacts of Development Projects

John A. Di xon et al. , EAPI,

East-West Center, August 1986

No. 32 Sc ience and Technology for Development :

Role of the Bank

Kedar N . Kohl i and Ifzal Al i , N ovember 1986

N o. 3 3 S a t e ll it e R em ot e S en s in g in t h e As ia n

and Pacific Region

M ohan Sundar a Rajan , December 1986

N o. 34 C h a n g e s i n t h e E x por t P a t t e r n s of As ia n a n dPacific Developing Countries: An Empirical

Overview

Pradum na B. Rana, Janu ary 1987

N o. 3 5 Ag r icu lt u r a l P r ice P o li cy i n N ep a l

Geral d C. Nelson, M arch 1987

N o. 3 6 Im p li ca t i on s of F a l li n g P r im a r y C o mm od it y

Prices for Agricultural Strategy in the Philippines

If zal Al i, September 1987

N o. 3 7 D e t er m in i ng I r r ig a t i on C h a r g es : A F r a m ew o rk

Prabh akar B. Ghat e, October 1987

No. 38 The Role of Fer t il izer Subsid ies in Agr i cul tura l

Production: A Review of Select Issues

M .G. Quibri a, October 1987

N o. 3 9 D o me st i c Ad ju s t me n t t o E xt e r na l S h o ck s

in Developing Asia

J un gsoo L ee, October 1987

No. 40 Improv ing Domest i c Resource Mobi li za t i onthrough Financial D evelopment : I ndonesia

Phil ip Er quiaga, November 1987

No. 41 Recent Trends and Issues on Foreign Direct

Investment in Asian an d P aci f ic Developing

Countries

P.B. Rana, M arch 1988

N o. 4 2 M a n u fa c t ur ed E x p or t s f r om t h e P h i li pp in e s:

A Sector Profile and an Agenda for Reform

I. A li , September 1988

N o. 4 3 A F r a m ew or k for E v a l ua t i n g t he E con om ic

Benefi ts of P ower P rojects

ECONOMIC STAFF PAPERS (ES)


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N o. 1 P o ve r t y i n t h e P e op le s Re pu b li c of C hi n a :

Recent Developments and Scope

for Ba nk Assistance

K.H. M oinuddi n, N ovember 1992

N o. 2 Th e E a s t e r n I s la n d s of In don e si a : An O ve r vi ew

of Development Needs and Potent ial

Bri en K . Parkinson, Janu ary 1993

N o. 3 R ur a l I n st it u ti on a l F in a n ce i n B a n g la d es h

and Nepal : Review and Agenda for ReformsA.H.M.N . Chowdhu ry and M arcel i a C. Garcia,

N ovember 1993

N o. 4 F i sca l D ef ici t s a n d C u r re n t Accou n t Imb a l a n ce s

of the South Paci f ic Countries:

A Case Study of Vanuatu

T.K. Jayar aman , D ecember 1993

N o. 5 R ef or m s in t h e Tr a n s it i on a l E con om ie s of As ia

Pradu mna B. Rana, D ecember 1993

N o. 6 E n v ir on m en t a l C h a ll en g es i n t h e P e op le s R ep ub li c

of China and Scope for Bank Assistance

Eli sabetta Capannel l i and Om kar L. Shr estha,

December 1993

N o. 7 S u st a i na b le D ev el op me nt E n vi ron m en t

and Poverty Nexus

K.F. Jal al , December 1993

N o. 8 I n t er m ed ia t e S e rv ice s a n d E con om ic

Development : The Ma laysian Exa mpleSutanu Behur ia and Rahul Khul lar , M ay 1994

N o. 9 I n t er es t R a t e D er eg ul a t ion : A B r ie f S u rv ey

of the Policy Issues and the Asian Experience

Carl os J. Gl ower, J ul y 1994

N o. 1 0 S o me As pe ct s o f La n d Ad m in i st r a t i on

in Indonesia: Implicat ions for Bank Operat ions

Sutanu Behur ia, Ju ly 1994

No. 11 Demographic and Socioeconomic Determinant s

of Contracept ive Use am ong Urba n Women in

the Melanesian Countries in the South Paci f ic :

A Ca se Stud y of Port Vila Town in Van ua tu

T.K. Jayar aman , Februa ry 1995

N o. 12 M a n a g in g D e ve lop me n t t h r ou g h

Inst i tut ion Bui lding

H il ton L . Root, October 1995

N o. 13 G r ow t h , St r uct u ra l C h a n ge , a n d O pt im a l

Poverty Intervent ions

Shil adi tya Chat terj ee, November 1995

N o. 14 P r i va t e In v es t m en t a n d M a cr oe con om ic

Environment in the South Paci f ic Island

Countries: A Cross-Country AnalysisT.K. Jayar aman, October 1996

No. 15 The Rura l -Urban Transi t i on in Viet Nam:

Some Selected Issues

Sudipto Mu ndle and Br i an Van Ark adie,

October 1997

N o. 16 A N ew Ap pr oa c h t o S e t t in g t h e Fu t u r e

Tra nsport Agenda

Roger Al lport, Geoff Key, and Char les Melhui sh

Ju ne 1998

N o. 1 7 Ad ju s t me n t a n d D is t r ib u t ion :

The Indian Experience

Sudi pto Mu ndl e and V.B. Tul asidhar, Jun e 1998

No. 18 Tax Reforms in Viet Nam: A Select i ve Analys i s

Sudi pto M und le, December 1998

N o. 19 S u r g es a n d Vol a t il it y of P r i va t e C a p it a l F l ow s t o

Asian Developing Countries: Implications

for Mult i lateral Development BanksPradu mn a B. Ran a, December 1998

No. 20 The Mil lennium Round and the Asi an Economies :

An Introduction

Di li p K . Das, October 1999

N o. 21 O ccu p a t ion a l S eg r eg a t i on a n d t h e G e n d er

E a r n i n gs G a p

Joseph E . Zvegli ch, Jr. and Yana van der M eul en

Rodgers, December 1999

No. 22 Informat ion Technology : Next Locomot ive of

Growth?

Di li p K. Das, June 2000

OCCASIONAL PAPERS (OP)

I . Al i , August 1989

N o. 44 P r o m ot i on o f M a n u fa c t ur e d E xp or t s in P a k is t a n

Ju ngsoo Lee and Yoshi hir o Iw asaki,

September 1989

N o. 45 E d u ca t i on a n d La bor M a r ke t s i n In d on e si a :

A Sector Survey

Er nesto M . Perni a and Davi d N . Wil son,

September 1989

No. 46 Indust r i a l Techno logy Capabil it i es

and Policies in Selected ADCs

Hi roshi Kakazu, June 1990

N o. 47 D e si gn i ng S t r a t eg ie s a n d P ol ici esfor Managing Structural Change in Asia

I fzal Al i , J une 1990

No. 48 The Complet ion of the S ingle European Communi ty

Ma rket in 1992: A Tenta tive Assessment of its

Impact on Asian Developing Countries

J.P. Verbi est and M in Tang, Ju ne 1991

No. 49 Economic Analys i s o f Investment in Power Sys tems

I fzal Al i , J une 1991

N o. 5 0 E x t er n a l F in a n c e a n d t h e R ol e of M u lt i la t e r a l

Financial Inst i tut ions in South Asia:

Changing P a t t erns , P rospect s , and Chal l enges

J un gsoo Lee, N ovember 19 91

N o. 51 Th e G en d er a n d P o ve r t y Ne xu s : I s s ue s a n d

P olicies

M .G. Qui bri a, November 1993

No. 52 The Role o f the S t a te in Economic Development :

Theory, the East Asian Experience,

and the Malays i an Case

J ason Brown , December 1993

No. 53 The Economic Benef it s o f Po t ab le Water Supply

Projects to Households in Developing Countries

Dale Whit t i ngton and Venkateswar lu Swarna,

Januar y 1994

N o. 54 G r o w t h Tr i a n gl es : C on ce pt u a l I s su es

and Operat ional Problems

Mi n Tang and M yo Thant, February 1994

No. 55 The Emerging Globa l Trad ing Env i ronment

and Developing Asia

Arvin d Panagar i ya, M .G. Quibr i a,and Nar har i R ao, July 1996

N o. 5 6 As pe ct s of U r b a n Wa t e r a n d S a n i t a t ion i n

the Context of Rapid Urbanizat ion in

Developing Asia

Er nesto M. Pern ia an d Stella L F. Alabastr o,

September 1997

No. 57 Chal l enges for Asi a s Trade and Env ironment

Douglas H . Brooks, Jan uar y 1998

No. 58 Economic Analys i s of Heal th Sec tor Pro ject s-

A Review of Issues, Methods, and Approaches

Ramesh Adh ik ari , Paul Gertler, and

Annel i Lagman, M arch 1999

No. 59 The Asi an Cr i si s : An Al terna te View

Raji v Kum ar and B ibek Debroy, Ju ly 1999

No. 60 Soci a l Consequences of the F inanc i a l Cr is i s in Asi a

James C. Know les, Er nesto M. Perni a, and

M ary Raceli s, November 1999


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19

1. Improv ing Domest ic Resource Mobi li za t i on Through

Financial Development: Overview September 1985

2. Improv ing Domest ic Resource Mobil iza t i on Through

Financial Development : Bangladesh Jul y 1986


Financial Development : Sri Lanka Apr i l 1987


Financial Development : India December 1987

5. F inanc ing Publi c Sector Development Expenditure

in Selected Countries: Overview Janu ary 1988

6. S tudy of Selec ted Indust r ies : A Br ie f Repor t

Apr i l 1988


in Selected Countries: Bangladesh J une 1988


in Selected Countries: India Ju ne 1988

9. F inanc ing Publi c Sector Development Expenditurein Selected Countries: Indonesia Ju ne 1988

10. F inanc ing P ubli c Sec tor D evelopment Expendi ture

in Selected Countries: Nepal Ju ne 1988


in Selected Countries: Pakistan Ju ne 1988

12. F inancing Publ i c Sec tor D evelopment Expendi ture

in Selected Countries: Philippines Ju ne 1988


in Selected Countries: Thailand Ju ne 1988

14. Towards Regiona l Cooperat ion in South Asia:

ADB/EWC S ymposium on R egional C ooperat ion

in South Asia Febru ary 1988

15. Evalua t ing R ice Market In tervent ion Po li ci es :

Some Asian Examples Apr i l 1988

16. Improving Domest ic Resource Mobi l izat ion Through

Financial Development : Nepal November 1988

17. Foreign Trade Barr i ers and Expor t Growth

September 1988

18. The Role of Sma l l and Medium-Scale Industries in the

Industria l Development of the P hi l ippines

Apr i l 1989

19. The Role of Sma l l and Medium-Scale Manufa cturing

Industries in Industrial Development: The Experience

of Selected Asian Countries

Januar y 1990

20. Nat ional Accounts of Vanua tu, 1983-1987

Januar y 1990

21. Nat iona l Accounts of Western Sa moa, 1984-1986

Febru ary 199022. Human Resource Po li cy and Economic

Development : S elected Country Studies

Jul y 1990

23. Expor t F inance: Some Asi an Examples

September 1990

24. Nat ional Accounts of the Cook Islands, 1982-1986

September 1990

25. Framework for the E conomic and F inanc ia l Appra i sa l o f

Urba n Development S ector P rojects Januar y 1994

26. Framework and Cr i t er ia for the Appra i sa l

an d Socioeconomic J ustificat ion of Educa tion Pr ojects

Januar y 1994

SPECIAL STUDIES, COMPLIMENTARY (SSC)

(Published in-house; Available through ADB Office of External Relations; Free of Charge)

N o. 1 E s t im a t es of t he Tot a l E xt er n a l D eb t of

the Developing Member Countries of ADB:

1981-1983

I .P. Davi d, September 1984

N o. 2 M ul tiv a r ia t e S t a t is t ica l a n d G r a p hi ca l

Cla ssification Techniques Applied

to the Problem of Grouping Countries

I .P. David and D .S. M al igal i g, March 1985

N o. 3 G r os s Na t i on a l P r od uct (G N P ) M ea s u re me ntIssues in South Pacific Developing Member

Countries of ADB

S.G. Tiwar i, September 1985

N o. 4 E s t im a t es of C om pa r a b le S a vi ng s in S e le ct ed

DMCs

H anant o Sigit, D ecember 1985

N o. 5 K eepin g Sa m ple Su rv ey D es ig n

and Analysis S imple

I .P. Davi d, December 1985

N o. 6 E xt er na l Deb t Sit ua t ion in As ia n

Developing Countries

I.P. Davi d an d J ungsoo Lee, Ma rch 1986

N o. 7 S t ud y of G NP M ea s ur em en t I ss ues in t h e

South Pacific Developing Member Countries.

Part I : Exist ing Nat ional Accounts

of SPDMCsAnalysis of Methodology

and Application of SNA ConceptsP. Hodgk in son, October 1986

N o. 8 S t u dy of G NP M ea s u re me nt I s su es in t h e S ou t h

P acific Developing Member Count ries.

Pa rt II : Factors Affect ing Intercountry

Comparabi l i ty of Per Capi ta GNP

P. Hodgk in son, October 1986

N o. 9 S u rv ey of t h e E x te rn a l D eb t S it u a t ion

in Asian Developing Countries, 1985

Ju ngsoo Lee and I .P. David , Apri l 1987

N o. 10 A S u r ve y of t h e E x t er n a l D eb t S it u a t i on

in Asian Developing Countries, 1986

Ju ngsoo Lee and I .P. David , Apri l 1988

N o. 11 C h a n g in g P a t t e r n of F in a n ci a l F l ow s t o As ia n

and P aci f ic Developing Countries

Ju ngsoo Lee and I .P. Davi d, M arch 1989N o. 12 Th e S t a t e of Ag r icu lt u r a l S t a t is t ics i n

Southeast Asia

I.P. Davi d, Mar ch 1989

N o. 1 3 A S u r ve y of t h e E x t er n a l D eb t S it u a t i on

in Asian and Pacific Developing Countries:

1987-1988

Ju ngsoo Lee and I .P. Davi d, J ul y 1989

N o. 14 A S u r ve y of t h e E x t er n a l D eb t S it u a t i on i n

Asian a nd P acific Developing Count ries: 1988-1989

J un gsoo Lee, Ma y 1990

N o. 15 A S u r ve y of t h e E x t er n a l D eb t S it u a t i on

in Asian and Pa cif ic Developing Countrie

s: 1989-1992

M in Tang, June 1991

N o. 1 6 R e ce n t Tr e nd s a n d P r o s pe ct s o f E xt e r na l D e bt

Si tuat ion and Financial Flows to Asian

and P aci f ic Developing CountriesM in Tang and Al udia Pard o, Ju ne 1992

N o. 17 P u r ch a s i ng P o w er P a r i t y i n As ia n D e v el op in g

Count ries: A Co-Int egra tion Test

Mi n Tang and Ronald Q. But iong, Apr i l 1994

N o. 1 8 C a p it a l F l ow s t o As ia n a n d P a c i fi c D e ve lop in g

Countries: Recent Trends a nd F uture P rospects

M in Tang and J ames Vill afuerte, October 1995

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monetary and financial cooperation in east asia: the chiang mai initiative and beyond

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