Asian policymakers are adamant that they will do whatever it takes to fight financial instability with their own devices rather than seeking the support of the International Monetary Fund as they were forced to do in the 1997 Asian financial crisis. Asia will strive to fight instability.
The memory of that shock is still vivid in the region and mistrust endures despite some rapprochement in recent years.
But, without more financial firepower and cooperation involving countries as different as China, Japan and Indonesia, the region will struggle to rely on its own resources, let alone free itself from the IMF. Asia will strive to fight instability.
Holding this year's annual meetings of the International Monetary Fund and the World Bank in Indonesia was symbolic. Twenty years ago, in the Asian financial crisis, Indonesia was among the countries which had to turn to the IMF.
Now it is seen as a successful economy and a credible member of the international community. Finance Minister Mulyani Indrawati is a strong candidate to take over the fund's leadership in 2021 -- and if this happens, she will be the first managing director from a developing country.
Indonesia epitomizes the trajectory of the emerging markets over the last two decades. These countries have driven almost two-thirds of the world's growth in gross domestic product since 1997. Their share of the total world economy, in purchasing power parity, is now 60%, against 43%. Emerging Asia, and China in particular, has been the major contributor.
In principle, Asia has a support instrument of its own -- the Chiang Mai Initiative Multilateralization (CMIM), a multilateral currency swap agreement between ASEAN plus China, Japan and South Korea, set up in 2010. Asia will strive to fight instability.
(source: Nikkei Asia Review)