The International Monetary Fund (IMF) may have turned its ears away from
Asian voices during the 1997 crisis, but the current chief promises recognition
that the global institution belongs to all 188 member nations, not just those
in Europe.
At the "Inaugural Bank of
Thailand Policy Forum" on Thursday evening, which marked the end of her
Asian tour, IMF managing director Christine Lagarde calmly acknowledged
criticism that the organisation is busy bailing out European nations because it
is a European institution.
"It's frustration inside my
heart. You talked about the IMF which I don't know," she said in response
to the criticism floated from the floor by Masahiro Kawai, dean and chief
executive officer of the Asian Development Bank Institute.
She noted that when she took over
the job a year ago, European banks were told to recapitalise, and she
encountered a flood of criticism. "It's OK. I have thick skin. I can take
it.
"When we feel strongly about
something that we have analysed and tried to change as much as we can, then we
just say it, whether it is to the governments of the Europeans, the US
government or the governments of Southeast Asia. I will say [it], or my team
will say [it], whether the country is big or small...Our duty is totally
independent. In saying so, we don't belong to Europe. We don't belong to
advanced economies. I regard the institution [as meant] to serve the entire
community of all 188 members."
She acknowledged that the IMF
could not tread anywhere it wants, as it would conduct analysis only if asked.
At the end, she asked Kawai to
observe the operations of the IMF in Washington, DC.
Lagarde's predecessors were
heavily criticised by Asian economies after the 1997 economic crisis over the
universal austerity packages applied to all regardless of their different
economic and social conditions.
At a dinner talk, Lagarde
promised that the IMF would be "country-attentive and
country-specific", ready for dialogue with the respective governments.
In her speech on "New
Perspectives on Asia's Role in the Global Economy" delivered to the
guests, including several former Bank of Thailand governors and Thai bankers,
"Let me also be candid," Lagarde said. "We are well aware of the
history of our relationship with Asia. We recognise that sometimes we have not
listened enough when in fact you were right. And we know that not all bad
memories have completely gone.
"Tonight, I want you to know
that the IMF has learned - and the IMF has changed. In our interconnected
world, we know we must continue to change. We must continue to work toward
being an even more effective partner for Asia - and for Thailand. We must
listen and be prepared to revise the textbook of crisis resolution depending on
country specifics, on regional ties."
She said she believed that
putting this into practice would lead to changes in three main elements.
First, economic analysis and
policy advice must become even more relevant and more useful for members.
Second, the IMF must continue to adopt lending instruments to meet Asia's needs.
And third, the IMF must keep pushing to ensure that Asia's role and voice in
the organisation is a true reflection of the region's new economic standing in
the world.
She said she was also pleased
that China, Japan and India would be among the 10 largest shareholders of the
IMF, a change in structure that would ensure more even-handed policy-making.
"This is not simply about
technicalities. This is about Asia having a more powerful say in the IMF - and
about the IMF being a more effective partner with Asia," she said.
She noted that there had been
times in history when Asia had been important for the world; this certainly is
another moment in history when that is the case.
"So it is time for the IMF
to open our ears to Asian voices and our minds to Asian ideas, and our textbook
to Asian solutions. This is no mere rhetoric. Asia is a linchpin for global
economic stability and is being heard, both through its growing stature in the
global economy, and also in the corridors of the Fund, from which we try to
understand the global economy and be an agent for improved stability."
In the speech, she lauded
Thailand's sharp economic recovery in the aftermath of the US-led 2008 crisis,
with the Kingdom showing 8-per-cent growth in 2010. It also bounced back
strongly after last year's devastating floods.
Since 2009, across Asia and the
Pacific, economic growth has been nearly twice as fast as global growth - an
average of almost 6 per cent a year compared with around 3 per cent for the
world.
Lagarde added that amid an
economic crisis hitting all corners of the globe, Asian policy-makers were the
only ones still worried when their gross domestic products were growing by less
than 6 per cent per annum. Despite potential vulnerabilities, Asians are well
placed to respond, she said, and their lessons are something that the IMF wants
to share with the world.
Lagarde's visit to Thailand is
her first since being named IMF chief last year.
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