G-24 blames speculators<\/p>\n
By Vincent Lingga<\/p>\n
HONG KONG (JP): Developing countries called yesterday for
\ninternational recognition of the role of speculators in setting
\noff the spread of the recent currency crisis from one Southeast
\nAsian country to others in the region.<\/p>\n
The Group of 24 Ministers (G-24), which represents developing
\ncountries in negotiations on international monetary affairs,
\nacknowledged that domestic policy weakness contributed to the
\nrecent Southeast Asian currency crisis.<\/p>\n
\"But the ministers also emphasize the need to acknowledge the
\nrole of speculative activities and other external factors that
\nspread the crisis, through contagion effects, to other countries
\nwith sound macroeconomic fundamentals,\" G-24 said in a
\ncommunique.<\/p>\n
The G-24 issued the communique yesterday afternoon after
\nconcluding a two-day meeting here to discuss agenda items of
\ngreat interest to developing countries to be taken up at the
\nIMF's and the World Bank's annual meetings which start here
\nTuesday.<\/p>\n
While the G-24's Venezuelan chairman Antonio Casas Gonzales
\nwas presenting the communique at the convention center last
\nnight, Malaysian Prime Minister Mahathir Mohamad launched another
\nattack on currency speculators at a meeting in a nearby hall.<\/p>\n
Speaking at a packed last session of a World Bank seminar on
\nAsia, Mahathir again blamed what he called a few rich rogues and
\ncurrency traders whose greed had played a big part in the recent
\nturmoil in Southeast Asia's financial markets.<\/p>\n
\"For almost half a century the countries of Southeast Asia
\nhave toiled day and night to better the lot of their people ...
\nBut a few people in the media and in control of big money seem to
\nwant to see these countries, in particular Malaysia, to stop
\ncatching up with their superiors (Western countries),\" he said.<\/p>\n
He said the 20 percent devaluation of the ringgit meant
\nMalaysian's purchasing power had fallen 20 percent while currency
\ntraders became richer.<\/p>\n
\"I, therefore, suggest that currency trading be stopped, made
\nillegal because it is unnecessary, unproductive and immoral. We
\nneed to buy money only when we want to finance real trade,\" he
\nsaid.<\/p>\n
Soros<\/p>\n
But the Malaysian leader's 16-page speech stopped short of
\nrepeating Mahathir's attack on American financier George Soros,
\nwhom last month he called a moron with a lot of money and accused
\nof being one of the few rogues behind Southeast Asia's financial
\nturmoil.<\/p>\n
Soros will speak at a seminar on global integration due to be
\nopened here this evening by World Bank President James
\nWolfensohn.<\/p>\n
The G-24 ministers also said they were greatly concerned that
\nAsia's growth prospects were being affected by the shock of
\nfinancial turmoil in dynamic Southeast Asia.<\/p>\n
\"We are concerned that the currency turmoil will also affect
\nJapan's recovery because the Southeast Asian region provides
\nlarge markets for Japan's exports and capital,\" G-24 chairman
\nGonzalez said.<\/p>\n
The communique said developing countries had a common stance
\non various issues and programs which would make up the main
\nagenda of the IMF-World Bank meetings.<\/p>\n
The ministers said they supported the IMF-World Bank campaign
\nagainst corruption and its campaign for the promotion of good
\ngovernance as a key component of development.<\/p>\n
\"We also express full support for cooperative international
\nefforts to combat transnational bribery, money laundering,\"
\nGonzalez said.<\/p>\n
But the ministers emphasized the need to avoid the application
\nof conditions based on subjective judgments to ensure members
\nwere treated uniformly based on objective criteria.<\/p>\n
The finance ministers and central bank governors of the Group
\nof Seven industrialized countries (G-7) also held a separate
\nmeeting here yesterday, discussing, among other things, Southeast
\nAsia's recent financial crisis.<\/p>\n
Mitsuzuka<\/p>\n
Japanese Finance Minister Hiroshi Mitsuzuka, who chaired the
\nmeeting, said the ministers hoped Thailand would vigorously carry
\nout the IMF's program in order to settle its financial situation.<\/p>\n
United States Secretary of the Treasury Robert E. Rubin said
\nthe G-7 reaffirmed its agreement that exchange rates should
\nreflect economic fundamentals and that excessive volatility and
\nsignificant deviation from fundamentals were undesirable.<\/p>\n
\"In this context, we emphasized the importance of avoiding
\nexcessive depreciation where this could lead to the reemergence
\nof large external imbalances,\" Rubin said.<\/p>\n
Rubin said the ministers also underscored the importance of
\nextra measures to enhance the transparency and supervision of
\nfinancial systems.<\/p>",
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