Understanding the Chang Mai Initiative

["Gary Santos" <evs@xxxxxxxxxxxx>]

It seems to me that the CMI does not significantly weaken the US dollar in
its position as a reserve currency. I've been looking at the web for the
details of the CMInitiative in order to understand it better. So far,

(a) The region's reserves in USdollars among its ASEAN+3 (Japan, China and
Korea) members are effectively being spread around to each member. This is
being done, presently, by currency swap arrangements (circa 2001).
Magnitudes involved insofar as Japan dollars are concerned are $3 billion
for equivalent pesos. More at: http://www.mof.go.jp/jouhou/kokkin/pcmie.htm.

(b) The amounts involved are small compared to what is required to defend an
attack on a currency. The CMI provides for credit facilities (interest based
on LIBOR) approx. averaging $3-4 billion each country. In the 1997 financial
crisis
borrowings, the Philippines US$ 1 billion; Thailand US$ 17.2 billion;
Indonesia US$ 42.3 billion ; and the Republic of Korea US$ 58.4 billion.

(c) Most of the swap facilities are US$ denominated.

(d) From Henry's post on U.S. Debt In Asia Has Its Costs
http://www.newsday.com/business by Charles V. Zehren: A critical date comes
June 30 when the organization is expected to telegraph its members'
intention to begin issuing cross-border debt in the "Chiang Mai Initiative"
report to the Asian Development Bank board of governors in Manila. It's
anticipated the plan will call for Asian central bankers to reduce the
dollar holdings in their reserves and greatly increase how much they hold in
each others' currencies, elevating them to "reserve status."

(NB. I'm sending this to the A-list wondering if there is a Marxist view
point regarding international finance.)