by Chen Jipeng

    HUA HIN, Thailand, Oct. 24 (Xinhua) -- Leaders at the ongoing summits of east and southeast Asian leaders at the Thai beach resort of Hua Hin on Saturday urged their finance ministers to speed up preparation work on the region's foreign exchange reserve pool so that it can be launched by the year end.

    The landmark reserve pool, known as the Chiang Mai Initiative Multilateralization (CMIM), will help the member countries of the Association of Southeast Asian Nations (ASEAN) as well as China, Japan and South Korea address short-term liquidity difficulties amid potential crises in the future, analysts said.

    Officials said they also expected to the multilateral financial aid mechanism to help spur cooperation and integration in the region.

    The multilateral CMIM can be traced back to the Chiang Mai Initiative (CMI) agreed on by the ASEAN Plus Three finance ministers in 2000. The CMI mainly comprises bilateral currency swap arrangements among the group.

    The ASEAN Plus Three finance ministers agreed on "all the key components" of the foreign currency reserve pool at a meeting in Bali, Indonesia in May 2009, only two years after they agreed on efforts to establish the CMIM to combat short term liquidity difficulties amid financial crises.

    The CMI owed its birth to the sense of urgency felt by the southeast Asian economies in the aftermath of the Asian financial crisis in 1997, said Simon Wong, regional economist for Asia, Standard Chartered Bank.

    The sense of urgency amid the current global financial turmoil and the economic downturn further "spurred the preparation for the launching of the regional reserve pool," which will be worth 120 billion U.S. dollars, said Thomas Kwan, regional head of research for Asia, Standard Chartered Bank.

    Thailand's Finance Minister Korn Chatikavanij also acknowledged the role of the two crises over the past 12 years in accelerating the progresses, saying that the reserve pool is close to being operational.

    "The CMIM will remain significant in future given that potential risks are still expected in the international financial system," Wong said.

    Officials said they also expected the reserve pool to facilitate trade and spur financial and economic integration in the region. For the reserve pool to be operational, a proper surveillance mechanism will have to be established to monitor the developments in the region's economy and financial system.

    Some analysts said there could be potential challenges or uncertainties any minute before the launch of the regional reserve pool.

    But the cooperation and integration in the region's trade economy, a trend more than obvious, have been the ultimate driver behind the birth and expected launch of the CMIM. Moreover, any country alone shall not be able to combat the globalized risks of the international financial system, officials argued.

    Success is expected also partly because leaders in the region have also demonstrated a strong will to preparation for the launch. Chinese Premier Wen Jiabao proposed the timely launching of the pool as one of the measures to combat the global financial turmoil and the economic downturn.

    Prime Minister Abhisit Vejjajiva of Thailand, which currently assumed the rotating chairmanship of the ASEAN, also encouraged ASEAN finance ministers to work on the launch of the reserve pool by the end of the year.

    Korn said the senior finance officials of the ASEAN Plus Three will convene again in November in an effort to resolve all the remaining issues.

    The preparation work for the launching of the reserve pool will not slow down although the sense of urgency might be reduced with the gradual recovery of the global economy, he added. 

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