Liqing Zhang, Center for International Finance Studies with Central University of Finance and Economics: Over the past two decades or more, there has long been a debate on whether an Asian Monetary Fund (AMF) should be created. This paper makes a good discussion of the need for having such a liquidity support unit through the reform of the existing Chiang Mai Initiative Multilateralization (CMIM), and how the CMIM should eventually be transformed into an AMF.
According to the authors’ argument, the needs for Asian countries to create the AMF are threefold: the IMF's unfair voting structure, which significantly undermines the representativeness of developing countries, especially Asian countries; the policy recommendations and mandates connected to the liquidity supports, which are imbued with an economic philosophy of untrammeled free market capitalism and often over-contractionary; and the fact that the IMF's resource for providing liquidity support is often insufficient. Based on the lessons...