Reform of the international financial architecture : how can Asia have a greater impact in the G20?

The Asian financial crisis (AFC) of 1997–1998 had led to calls for the reform of the IFA—policies and practices of institutions that promote global financial stability. The V-shaped recovery from the crisis had, however, led to complacency and the proposed reform measures were quickly forgotten. The on-going global economic crisis (GEC) has once again ignited interest in IFA reforms. The G20 has also replaced the G8 as the premier institution for international economic cooperation. This is historic because, for the first time, systemically important developing countries have a say in IFA reforms. This paper reviews (i) recent efforts to reform the IFA and (ii) presents some thoughts on how Asia can strengthen its participation in the G20 and have a greater impact on IFA reforms. The paper makes the case for Asian countries (i) lobbying for the formalisation and regularisation of ASEAN Chair’s and ASEAN Secretary-General’s participation in the G20 Summits, (ii) holding policy dialogue meetings of an “expanded” ASEAN+3 (regular 13 members plus India, Australia and New Zealand) just prior to the G20 Summits for coordinating policies and developing common positions to support the ASEAN representatives at the G20 Summits and (iii) supporting and joining the informal Global Governance Group (3G) convened by Singapore under the auspices of the United Nations (UN) to coordinate Asian perspectives with developing countries in other regions of the world. Once the ASEAN+3 Macroeconomic Research Office (AMRO) is established in Singapore (by May 2010), AMRO can take over the task of convening the policy dialogue meetings of the “expanded” ASEAN+3 to support participation of the ASEAN Chair and the ASEAN Secretary- General in the G20 Summits