-Caveat Lector- IMF manager says worst of world financial crisis is over NEW YORK (February 24, 1999 10:17 p.m. EST http://www.nandotimes.com) - International Monetary Fund managing director Michel Camdessus on Wednesday declared that the worst of the world financial crisis is over. He also insisted that globalization is here to stay. Addressing the Foreign Policy Association, Camdessus also stressed that the IMF, despite its many critics, would neither be abolished nor transformed into a global central bank. He said the private sector must in future bear the consequences of imprudent investment, adding that international efforts to rescue economies in crisis should not be seen as "easy bailouts" for either countries or creditors. Camdessus paid lavish tribute to South Korea, where he said the IMF forecast of a 1 percent fall in growth this year, issued in December, had now been revised to a gain of 2 percent. Elsewhere, he said, economies accounting for most of the world's growth "still seem to be in quite sound health." Asia is on the mend, Brazil is strengthening its domestic policies and Mexico and Argentina have already shored up their defenses against foreign financial turmoil. "There are positive indications that while many risks are still with us, the worst seems to be past," he said, citing in particular the Philippines, Thailand, South Korea and Indonesia. "These programs are bearing fruit, even if each country still faces continuing challenges of pursuing deep structural reform." In an allusion to critics who say the turbulence unleashed in Thailand in July 1997 -- and which later spread to Russia and Brazil -- heralds an end to free- flowing international capital movement, Camdessus countered that "globalization is a trend that is with us to stay." The future belongs to "integrated, open capital markets" rather than to exchange and capital controls. "The turbulence of the past two years should strengthen rather than diminish our commitment to the integration of financial markets through properly sequenced liberalization," he said. As for the IMF itself, Camdessus assured his listeners that the fund would not go away -- "neither will it be transformed into a global central bank nor into a full-fledged lender of last resort." He pointed instead to a proposed facility within the IMF that would allow rapid large-scale lending -- at higher rates than are now charged -- to pre- qualified countries trying to ward off economic unrest. Camdessus also backed calls for the transformation of the Interim Committee, a ministerial-level body that at present has only an advisory role in IMF policies. The plan is to upgrade the committee and to endow it with more authority in determining IMF programs. "The world needs a mechanism for making sure that all countries are legitimately and actively represented at the place where key monetary and financial orientations are adopted," Camdessus said. Elsewhere, the IMF chief said that in the debate over the role of private banks and companies in the global economy, "the nub of the issue is to help to channel private capital flows to where they will be used best, and to enable investors to assess risks realistically while accepting the consequences of poor decisions." He said the IMF must ensure that its programs "do not protect either unduly risky behavior by investors or lax policies by debtor governments." In the past two years, the fund has been harshly criticized in academic circles and in the U.S. Congress on grounds that its readiness to bail out collapsing economies actually encouraged reckless lending and borrowing. ------------------------------------------------------------------------ <Picture> ------------------------------------------------------------------------ Global | Nation | Sports | Politics | Opinions | Business | Techserver | Health & Science | Entertainment | Weather | Baseball | Basketball | Football | Hockey | Sport Server | MAIN ------------------------------------------------------------------------ Copyright © 1999 Nando Media Do you have some feedback for the Nando Times staff? DECLARATION & DISCLAIMER ========== CTRL is a discussion and informational exchange list. Proselyzting propagandic screeds are not allowed. Substance—not soapboxing! 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