Finance ministers and heads of central banks of some 182 countries, assembling here for the session, are worried over the worst downturn in Japan since World War II, the economic meltdown in Russia and crisis in East Asia, particularly, Indonesia, Thailand and Malaysia. They are expected to offer suggestions about new institutional arrangements to deal with the crisis.

Some American Congressmen, known for their vocal criticism of the 53-year-old IMF, have even begun to demand that it be shut down. US president Bill Clinton, backed by British prime minister Tony Blair, favours a new "global financial architecture," apparently acknowledging the inability of the IMF, in its present form, to deliver.

IMFmanaging director Michel Camdessus, who finds himself under attack from all sides, has defended his institution's policies in Asia in 1997. "If we were to go back to July '97 for Thailand, November for Indonesia, November-December for (South) Korea ... we would do the same thing," he asserted.

He noted that Thailand and South Korea had made considerable progress. Interest rates, which had shot up in both countries, had since declined to pre-crisis levels. However, what is being held against the IMF is its misjudgment of the emerging crisis. The IMF itself gave indication of this phenomenon when it revised its 1998 global growth forecasts down to 2 per cent from the 3.1 per cent it had predicted just six months ago.

As against earlier advice of higher interest rates, the IMF is now recommending a cut in those rates to guard against recession. Facing a barrage of criticism, Camdessus said, "I am repentant for my personal sins, but not that much for what we did in the circumstances."

Meanwhile, WorldBank president James Wolfensohn has promised his organisation's support to the IMF in its efforts to contain the emerging markets crisis and help financially stricken countries lay a foundation for stable growth during the next three to four years. The bank will "work with governments on the issues of reforming their financial systems, of reforming their judicial systems, of building social safety net programmes, of trying to assist the countries to put down the stability that they need in order to have growth," Wolfensohn told reporters. Camdessus wanted the major players to discharge their full responsibilities for orderly growth in the world economy. "This is why I welcome the initiative of the (US) Federal Reserve to start reducing interest rates," he said, referring to the September 29 action by the US central bank to reduce one of the interest rates it controls by one-quarter percentage point. The Federal Reserve's action means that US rates can be lowered further in the future, Camdessus said. "TheFederal Reserve here has been forward-looking and has tried to adapt better the monetary stance of the United States to problems that could come for the United States in the future and to the developments in the overall international economy."

"There is also room in Europe for reduction of interest rates," he said, adding, "Japan, the world's second largest economy, has other problems, the most important being to put its financial sector in order and to maintain, increase and sustain during 1999 the needed fiscal stimulus, while continuing with efforts at opening and deregulation." He did not think the United States, Europe and Japan could have any sort of co-ordinated monetary policy because each is in a very different phase of its business cycle. "You cannot say, `Well, all of us reduce by half a point.' No, each of them must, in view of their own situation in their own region, serve the same purpose, which is to optimise the condition of growth in the world," he said.

As the industrial countries dotheir part to spur world growth, the "second pillar of the world strategy for recovery is certainly to help countries which have been severely hit by the crises in their recovery process," Camdessus said. Here, the countries must help themselves "by implementing steadily and in all their dimensions the programme they agreed to," he said. The rest of the world, Camdessus said, can help this process through bilateral support and debt structuring arrangements, he pointed out.

Japan uncovers $30bn Asia-aid programmeJapan on Saturday unveiled a $30 billion aid programme to help its Asian neighbours rebuild their economies badly battered by the fallout from last year's region-wide currency crisis. Finance minister Kiichi Miyazawa told a breakfast meeting of finance ministers and central bank governors from Thailand, Indonesia, Malaysia, the Philippines, Singapore and South Korea that the aid will consist of $15 billion to help meet short-term capital needs and another $15 billion for medium-term funds."We wanted to discuss ... how we can overcome economic difficulties in your countries," Miyazawa said in his opening remarks to the breakfast meeting.

He said the aid was aimed at preventing a deflationary spiral from building up and helping the region's economic recovery.

He noted that Asian nations were not threatened by immediate further crisis for the time being, now that their currencies have stabilised and their foreign exchange reserves have recovered. He added that the real problem for the crisis-hit Asian nations now was falling economic growth rates and sluggish corporate earnings. Miyazawa was due to hold bilateral talks with US treasury secretary Robert Rubin later Saturday morning and was also to attend the group of seven meeting in the afternoon.