Financial cooperation of the ASEAN+3: Viability and prospects

The purpose of this paper is to examine the progress and problems of financial cooperation of ASEAN +3 (APT) and explore conditions under which it may experience long-term viability. Financial cooperation has been the most notable response to the Asian financial crisis of 1997-1998, which irreversibly set in motion the regionalism movement in East Asia. This paper mainly examines the Chiang Mai Initiative (CMI) and the Asian Bond Market Initiative (ABMI) and their progress and limits, and subsequently tries to find some clues regarding how to increase its viability. This paper argues that in order for the APT to experience long-term viability and progress in terms of financial cooperation, it must articulate common interests and share the common perceptions of those interests. Despite the obstacles ahead, anticipated common interests among member countries derived from financial cooperation and shared perceptions, will help the APT framework move forward. Based on neo-functional and neo-liberal institutional insights, this paper argues that these common interests will encourage the cooperation of member countries, and that the cumulative results of cooperation will in turn facilitate further institutionalization. The initial progress of the CMI and ABMI has pointed to the plausibility of this scenario.