Asia may need to establish its own monetary fund if it is to cope with future financial shocks similar to that which rocked the region 10 years ago, a regional forum in Manila was told yesterday.
An Asian Monetary Fund may be essential as the IMF was unable to adequately cope with the Asian crisis when it started in July, 1997, the forum hosted by the Asian Development Bank was told.
"The IMF failed to make precise reforms [while] the US was ill-positioned to take swift action" when the crisis broke, said Chung Duck-koo, a former South Korean commerce minister.
"Instead of waiting for a fire department across the world to act, the region needs a voluntary community fire brigade," he said, warning that "a sense of complacency may bring about another crisis."
Chung said the 1997 crisis, first triggered by a rapid withdrawal of foreign funds from Thailand, had been the worst crisis faced by his country since the Korean War.
Dorodjatun Kuntjoro Jakti, former minister of economic affairs in Indonesia, said the conditions imposed by the IMF to get Indonesia out of the crisis "created continuous tensions within the body politic of Indonesia," contributing to the collapse of the Suharto regime and leading to years of political turmoil.
Former Philippine finance secretary Roberto de Ocampo said that when Asian nations first proposed an Asian Monetary Fund to deal with the crisis, this was immediately shot down by "the wise men" from other countries.
He said "the Asian financial crisis ended sooner than everyone expected," and linked this to increased inter-Asian trade that many countries resorted to, after the crisis broke out.
"The time has come for Asia to figure out, in their own way, what to do with their financial resources," de Ocampo said.
"Further Asian financial integration is the best antidote for Asian future financial crises."
He said Asia had a huge surplus of savings invested mostly in US dollar-denominated instruments.
The IMF was "a debtors monetary organization [and] we need a creditors' monetary organization," he said.
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