This article will be published in an Asia Program, Woodrow Wilson International Center for Scholars, publication entitled The Tenth Anniversary of the Asian Financial Crisis: Lessons Learned, Critical Assessments, and Charting the Path Forward.
The article argues that the most important long-term impact of the East Asian financial crisis, a decade later, has been that it began a process that led to the collapse of the International Monetary Fund's (IMF's) influence over middle-income countries. This was partly a result of the Fund's role in the crisis, detailed in the article, which was widely seen as a major failure. Partly as a result of this experience, the middle-income Asian countries have accumulated large reserve holdings and largely removed themselves from IMF influence. The IMF's authority and credibility was further undermined in the Argentine crisis of 1998-2003. In recent years the availability of alternative sources of credit, especially in Latin America, have led to the collapse of the IMF's "creditors' cartel" in that region and among middle-income countries generally. The author argues that this is the most important change in the international financial system since the breakdown of the Bretton Woods system in 1973. For the foreseeable future, any positive financial reforms will be made at the national and regional level - e.g., with the extension of such arrangements of the Chiang Mai Initiative. This is because the high-income countries are not significantly closer to supporting reforms at the level of the international financial system or institutions than they were a decade ago. It will also be important for low-income countries, where the IMF still retains its role as "gatekeeper" for official credit, to become independent from the Fund so they can pursue more effective macroeconomic and development policies.
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"In economic life there is extreme inequality and exploitation. Although colonialism no longer exists openly in the political and economic sphere, still it persists indirectly, and this should not be tolerated... In this respect you should remember that in economic life, we will have to guarantee the minimum requirements of life to one and all... There cannot be any sort of adjustment as far as this point is concerned. The minimum purchasing requirement must be guaranteed to all. Today these fundamental essentialities are not being guaranteed. Rather, people are being guided by deceptive economic ideas like outdated Marxism, which has proven ineffective in practical life and has not been successfully implemented in any corner of the world. Why do people still believe in such a theory, which has never been proved successful? The time has come for people to make a proper assessment of whether they are being misguided or not." |
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"Human beings have still not been able to form a human society, and have still not learned to move with the spirit of a pilgrim. Although many small groups, motivated by self-interest, work together in particular situations, not even a small fraction of their work is done with a broader social motive. By strict definition, shall we have to declare that each small family unit is a society in itself? If going ahead in mutual adjustment only out of narrow self-interest or momentary self-seeking is called society, then in such a society, no provision can be made for the disabled, the diseased or the helpless, because in most cases nobody can benefit from them in any way... in that case there always remains the possibility of some people getting isolated from the collective. All human beings must attach themselves to others by the common bond of love and march forward hand in hand; then only will I proclaim it a society." |