The Role and Challenges of APEC in the Development of the Asia-Pacific Monetary System
Author: Wen-Chih Lee
Abstract / Chinese PDF Download
Derived from Karl Polanyi’s classic work, “the Great Transformation” thisarticle argues that international currency and exchange systems are the products ofinteraction between international powers and financial interests. Currency is notonly the symbol of national sovereignty but also a base for the competition ofinternational powers. This paper analyzes the development of currency systems inAsia-Pacific and the opportunities and challenges of APEC from the point of viewof Polanyi. Owing to the widening gap between social expectations of East Asiancountries and APEC’s U.S. dominated role, the East Asian Financial Crisis of 1997caused tremendous harm to APEC. Under pressure from the triple alliance- US,IMF, and APEC, with regards to APEC’s monetary and financial issues, ASEANand China-led East Asian countries established ASEAN PLUS THREE (APT) tocheck and counter-balance the predominance of U.S. power within APEC. APECencountered severe challenges from the development of regional monetary andfinancial systems when APT actively promoted Chiang Mai Initiative (CMI) andAsian Bond Fund (ABF). Although APEC did not effectively meet a lot of therequests from East Asian countries in the 1997 Financial Crisis, the innovation todeal with those related issues of APEC as a think-tank is still very important.