Magazine article Business Asia

Does the IMF Have a Future?

Magazine article Business Asia

Does the IMF Have a Future?

Article excerpt

The International Monetary Fund (IMF) has come under fire from many quarters for its handling of Asia's financial crisis. Asia analysts have become increasingly critical of the Fund's traditional prescriptions for solving economic crises. This month's IMF meetings in Washington did little to persuade many Asian commentators that the right policies are being pursued. So where to now for the IMF? The following analysts give their opinion on the Washington talks and the way forward for the IMF.

* Zhen Bingxi, head of the World Economy Division of the China Institute of International Studies: "The IMFs terms are too harsh. The IMFs strong prescription has made many countries suffer from diarrhoea from too many wrong medicines ... Many economies do not need austerity but a relaxed financial environment."

* Indian Finance Minister Yashwant Sinha: "The brute fact is that after five days of intense discussion and debate, we are still at a loss as to why contagion has continued to spread. Nor do we seem to have achieved clear, agreed and effective measures to contain the crisis."

* Kim Yong-duck, the South Korean finance ministry's deputy director general for international finance:

"There should be more sophisticated and efficient mechanisms for monitoring short-term capital movements and, in some cases, there should be certain mechanisms to make a more stable market environment, especially for developing countries."

* Choedchai Khannabha, a top economist at Thailand's finance ministry:

"The IMF must find effective ways to control thousands of global hedge funds which have (caused) havoc in the financial world. It cannot continue ignoring this problem."

* Mark Macfarland, economist at Santander in Manila: "There is a future for the IMF provided they smarten up their act," he said. "They've been an abject failure in Asia. There is a cynical view ... that the role of the IMF in Asia has been nothing more than to ensure that international creditors get their money back. …

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