Chiang Mai Inititative: now in Singapore

Despite its name and its origins lying in Thailand, the Chiang-Mai Initiative Multilateralization will have its surveillance mechanism, and the attendant secretariat, housed in Singapore.

For Thailand this is a bitter pill to swallow, as since 2000 (when the CMI begun), Thailand was the assumed country to house the secretariat. Political instability has cost Thailand dearly again, as this set-back is more than simply embarassing. Unlike the failure to successfully host the East Asian Summit in late 2008 (a farce that saw the EAS rescheduled four times), failure to win the secretariat will cost Thailand influence in the region. The secretariat would have attracted finance and central bank officials to Thailand, and been a site at which Thailand local officials could interact with the region more widely. Instead, Singapore has reinforced its position as a financial hub.

It will be interesting to see how the surveillance mechanism (so-called ASEAN-plus-three Macroeconomic Research Office or AMRO) will work, it is scheduled for activation in May of next year. Already Zheng Xiaosong, Director General of the International Department at China's Ministry of Finance has noted that, "we should prevent it [AMRO] from intervening in other countries' internal affairs, because the so-called monitoring function is, in other words, only a supervision or performance tracing role in order to provide necessary consultation to relevant countries," - suggesting that China still is - at best - disinterested in developing a rigorous surveillance mechanism, with all problems that brings with it.