CARACAS, Feb 8: Asia's financial meltdown and its global repercussions dominated opening talks on Saturday at a three-day meeting of the Group of 24 developing countries in Caracas.``These are moments of crisis, and our task is to stop it becoming a global catastrophe," IMF managing director Michael Camdessus said.
Camdessus listed `seven pillars' of good policy-making that would help avert similar crises in the future, and he urged delegates not to keep their arms crossed as the aftermath of Asia's turmoil still swept the world.
``The first line of defence is a healthy macro economic-stance," he said. But Camdessus warned that glowing economic results were not enough as they could mask vulnerabilities, as was the case in south-east Asia's `miracle economies'. ``You only see those weaknesses when the market's attitude to the economy changes," he said.
A strong and well-supervised financial sector, transparent financial information, good governance, strong coordination with the private sector should acrisis strike, and better regional supervision were other policies Camdessus listed to help avert or calm the effects of new crisis.
Although G24 delegates are expected to argue the Asian crisis demonstrates the imperfections of global financial markets, Camdessus also urged developing countries to continue embracing financial liberalization. ``We have to continue liberalizing, but in an orderly way," he said.
His message was echoed by Rubean Ricupero, secretary general of UNCTAD, who called on G-24 meeters to keep their borders open to the world.
``Commodity prices have fallen, growth has slowed, but perhaps the biggest danger (of the Asian crisis) is a protectionist backlash," he said. Acting G-24 president and Venezuelan central bank president Antonio Casas Gonzalez said the crisis underlined the rising importance of developing economies in the global economy, but said the current world financial order was flawed.
``The world's monetary and financial systems have structural weaknesses''. Text lostdue to data-overrun Asian crisis and one delegate said he would argue for its replacement. But Camdessus openly acknowledged that the IMF was not perfect and said it's board of directors needed to include more members from the developing world.
The G24 is a monetary offshoot of the Group of 77 non-aligned developing countries. Down to 23 members following the break-up of Yugoslavia, the group was created in 1971 and includes Algeria, Argentina, Brazil, Colombia, Congo (ex-Zaire), Egypt, Ethiopia, Gabon, Ghana, Guatemala, India and Iran., Ivory Coast, Lebanon, Mexico, Nigeria, Pakistan, Peru, Philippines, Sri Lanka, Syria and Trinidad.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
