Overview  

The ASEAN + 3 Finance Ministers Cooperation (AFMM + 3) was established in 1999 at the behest of the ASEAN + 3 Leader’s Summit in Manila in November 1999 and convened their  1st Meeting in Chiang Mai, Thailand in May 2000.  The AFMM + 3  agreed to strengthen policy dialogue, coordination and collaboration on the financial, monetary and fiscal issues of common interest. It initially focuses on issues related to macroeconomic risk management, enhancing corporate governance, monitoring regional capital flows, strengthening banking and financial systems, reforming the international financial architecture, and enhancing self-help and support mechanisms in East Asia through the ASEAN+3 Framework.

Notable initiatives under the ASEAN + 3 Finance Ministers and Central Bank Governors (AFMGM+3) process are as follows:

1. Chiang Mai Initiative (CMI) –Launched in May 2000 to strengthen the region’s capacity to safeguard against increased risks and challenges in the global economy. It expanded the ASEAN Swap Arrangement and a network of bilateral swap and repurchase agreement facilities among ASEAN Member States, China, Japan and Republic of Korea.

Chiang Mai Initiative Multilateralization (CMIM) – established in 2010 to further strengthen the self-help and support mechanism in East Asia. The CMIM  is a multilateral arrangement among the finance ministries and central banks of the ASEAN+3 member countries and the Hong Kong Monetary Authority. Governed by a single contractual agreement, it provides financial support in United States Dollars through currency swap transactions among them. The total size of the CMIM Arrangement is US$120 billion comprised of contributions from the CMIM Parties.

In 2012, after the global financial crisis, the AFMM + 3 agreed to further strengthen the region’s crisis management capacity by enhancing the effectiveness of the regional financial safety net by doubling its total size to US$ 240 billion and increasing the IMF de-linked portion to 30%.  They also agreed to lengthen the maturity and supporting period for the IMF linked portion from 1 year to 3 years. During the ASEAN+3 Finance and Central Bank Deputies Meeting (AFCDM+3) on December 2019, IMF de-linked portion was further increased from 30% to 40%.

2. ASEAN + 3 Macroeconomic Research Office (AMRO) –was established during the AFMM + 3 in May 2009 in Bali to serve as an independent regional surveillance unit to monitor and analyse regional economies and support CMIM decision-making.  In 2015, ASEAN+3 countries signed the agreement which transform AMRO to an International Organisation based in Singapore.  

During peace time, the AMRO will prepare quarterly consolidated reports on the overall macroeconomic assessment of the ASEAN+3 region, as well as individual member countries, conduct annual consultations with individual member countries and implement an early warning system for advance detection of emerging vulnerabilities. However, during crisis time, the AMRO will prepare recommendations on any swap request based on the macroeconomic analysis of the swap requesting member and monitor the use and impact of funds once any swap request is approved. 

3. Asian Bond Markets Initiative (ABMI) –launched in 2003 to develop local-currency denominated bond markets, and  develop more accessible and well-functioning regional bond markets both for issuers and investors.

One of the concrete outcome of the ABMI is the establishment of the Credit Guarantee and Investment Facility  (CGIF)  to develop and strengthen the local currency and regional bond markets. CGIF provides credit enhancement and make investments to allow eligible issuers to access local currency bond markets and thereby avoid currency and maturity mismatches by issuing within the region.  It was established as a trust fund of the ADB and will have an initial capitalization of US$ 700 million from the ASEAN+3 members. In November 2017, the CGIF contributors agreed to increase the capital to US$ 1.2 billion at the special Meeting of Contributors (MOC) to address its guarantee capacity constraint.

Major Committees and Sectoral Bodies of ASEAN Plus Three Finance Cooperation (ASEAN +3)

ASEAN+3 Task Force Meeting (AMRO, CMIM and ABMI)

ASEAN+3 Finance and Central Bank Deputies Meeting (AFCDM+3)

ASEAN+3 Finance Ministers and Central Bank Governors Meeting (AFMGM+3)