There is a danger, however, that opinion may now shift to the other end of the political spectrum, and capital controls seen as ends in themselves. Paul Krugman has, in an open letter to the Malaysian prime minister, warned that capital controls should at best be seen as giving a breathing space, which will enable countries to restructure their beleaguered economies. They should not be seen as ends in themselves. This is important. Capital controls cannot serve as a prophylactic against the financial flu. Economies around the world are so interlinked that nobody will remain unaffected. China, for all its capital controls, is under tremendous pressure to devalue. There is no getting away from the fact that while the economy has become global, policy-making is still national. Therefore, given that financial contagion is a fact of life, there is an urgent need for a new international financial architecture, which will ensure a coordinated response to currency crises. The US president has outlined the basis ofthis new architecture, calling for increased tranparency, funding by the IMF, coordinated action by the G7 to ensure liquidity, and most significantly, a social safety net for those affected by such crises. The trouble is, there is no agreement about the necessary measures among the leaders of the G7, because domestic economic conditions continue to be uppermost in their minds while formulating policies. Jeffrey Sachs' proposal for a meeting between the leading developed and developing economies to thrash out these issues could be the first step towards developing an international framework for co-operation.