Japan, China, South Korea and 10 members of the Association of Southeast Asian Nations (ASEAN) have agreed to establish a new lending mechanism to respond quickly to crises caused by pandemics and natural disasters.
At a meeting in Milan, Italy, on Sunday, finance ministers of the grouping known as ASEAN+3 announced the launch of a new rapid financing mechanism under the Chiang Mai Initiative Multilateralization (CMIM), which was created in the wake of the Asian financial crisis and aims to support regional financial stability. The new mechanism will provide member countries with access to emergency financing in the event of a financial crisis caused by sudden shocks, with no strings attached. “We believe that this new CMIM mechanism will enhance regional resilience,” the joint statement said. The CMIM already has a foreign exchange reserve pool of $240 billion. Japan and China each contribute $76.8 billion, South Korea $38.4 billion, and the 10 ASEAN member countries a total of $48 billion.
