Manila: Asia may need to establish its own monetary fund if it is to cope with future financial shocks similar to that which rocked the region 10 years ago, a regional forum in Manila was told on 2 July.
An Asian Monetary Fund may be essential as the International Monetary Fund (IMF) was unable to adequately cope with the Asian crisis when it started in July 1997, the forum hosted by the Asian Development Bank (ADB) was told.
“The IMF failed to make precise reforms (while) the US was ill-positioned to take swift action,” when the crisis broke said Duck-Koo Chung, former South Korean commerce minister told the forum.
“Instead of waiting or a fire department across the world to act the region needs a voluntary, community fire bridge,” he said warning that “a sense of complacency may bring about another crisis.”
Chung said the 1997 crisis, first triggered by a rapid withdrawal of foreign funds from Thailand, had been the worst faced by his country since the Korean war in the 1950s.
Dorodjatun Kutjoro Jakti, former minister of economic affairs in Indonesia, said the IMF conditions imposed to get Indonesia out of the crisis “created continuous tensions within the body politic of Indonesia,” contributing to the collapse of the Suharto regime and leading to years of political turmoil.
Former Phillipine finance secretary Roberto de Ocampo said that when Asian nations first proposed an Asian Monetary Fund to deal with the crisis, this was immediately shot down by “the wise men” from other countries.