New fund to meet urgent needs during pandemics, disasters in Asia

ISTANBUL

With the financial scars of COVID-19 yet not fully healed, a new fund is in the works to meet needs during any future pandemic or natural disasters.

China, Japan, and South Korea together with Southeast Asian nations agreed Thursday to launch the joint fund.

No condition to apply for the funds will apply if any such scenario appears.

The agreement came after the Association of Southeast Asian Nations (ASEAN), Japan, China, and South Korea – known as ASEAN Plus Three” – agreed to launch a Rapid Financing Facility to “boost the safety net under the Chiang Mai Initiative,” Tokyo-based Kyodo News reported.

With a target to provide liquidity of up to $240 billion, the fund will operate the Chiang Mai Initiative – a regional currency swap agreement, which was created following the 1997 Asian financial crisis.

“Under the new facility, member nations can swiftly secure funds … without conditionality when an emergency funding need arises due to exogenous shocks such as natural disasters and pandemics,” said Masato Kanda, Japan’s vice finance minister for international affairs.

He made the comments after a meeting of officials from the four sides who met in Kanazawa, Ishikawa province, in central Japan.

Finance and central bank chiefs from the group are expected to formally adopt the new decision in the coming spring.