IMF's Camdessus leaves controversial legacy in Asia<\/p>\n
By James T. Areddy<\/p>\n
HONG KONG (Dow Jones): Asians will remember Michel Camdessus
\nmostly for his arms -- specifically the way he folded them while
\nwatching the presidents of South Korea and Indonesia succumb to
\nfinancial crisis two years ago and sign requests for
\nInternational Monetary Fund (IMF) bailouts.<\/p>\n
A senior Asian Development Bank (ADB) official speaking
\nshortly after those episodes said Camdessus's rigid stance and
\nwry smile -- \"like a Cheshire cat\" -- erased all hope that the
\ninternational community could scotch the crisis quickly.<\/p>\n
By not realizing that Indonesians would bitterly recall Dutch
\ncolonialism nor that South Koreans would feel humiliated in
\ndefeat, the French-born Camdessus, who announced his intention to
\nresign as IMF managing director on Tuesday, demonstrated naivete
\nabout Asia that would impale workout efforts needed to support
\nthe economies, the ADB official said.<\/p>\n
Asia's restructuring has certainly been slow-going. And the
\nIMF's initial formula for snuffing out crisis in Asia will cloud
\nCamdessus's reputation long after he resigns next February from
\nthe post he has occupied for over 12 years at the Washington-
\nbased fund.<\/p>\n
Nevertheless, analysts said Wednesday that after some costly
\ninitial missteps, the IMF learned how to alter its strategy in
\nAsia so as to foster a rebound in the \"crisis\" economies. Every
\none of these crisis economies, South Korea, Thailand, the
\nPhilippines and possibly even Indonesia should return to positive
\neconomic growth this year after two years of weakness.<\/p>\n
Indeed, the faster-than-expected economic takeoff in Asia this
\nyear has cooled the criticism that was initially heaped on the
\nhard-nosed approach of Camdessus in Thailand, South Korea and
\nIndonesia.<\/p>\n
\"The picture of him with Soeharto will be remembered by a lot
\nof people,\" said Soedradjad Djiwandono, Indonesia's central bank
\ngovernor at the time of the January 1998 episode and now a
\nuniversity professor.<\/p>\n
\"I know he didn't mean to look down on our president at that
\ntime, but for the Indonesian point of view, it looked like he did
\nit (intentionally),\" Soedradjad said in an interview with Dow
\nJones Newswires on Wednesday.<\/p>\n
Soedradjad ended up being forced out of his job in February
\n1998 by former Indonesian President Soeharto because he sided
\nwith the IMF in opposing the president's plan to introduce a
\ncurrency board. Two months later, Soeharto himself was ousted.
\nSoedradjad said Camdessus's pressure was only part of the reason,
\nsince tension against Soeharto had been building for years. \"It's
\na combination,\" he added.<\/p>\n
Of the IMF, he said, \"sometimes they get too much blame and
\nsometimes they get too much credit. A lot of learning has been
\ngoing on both sides.\"<\/p>\n
The initial problem may not have been so much with Camdessus
\nhimself, but with a fundamental misunderstandings between the IMF
\nand Asian governments, according to Bank of Thailand Governor
\nChatu Mongol Sonakul.<\/p>\n
\"He came here when it was necessary. He did try to warn us\"
\nabout potential vulnerabilities in the financial system, said
\nChatu Mongol on Wednesday. \"He was as effective as he could be.\"<\/p>\n
\"Without the IMF, we were going to be in real trouble,\" said
\nanother Thai, Phisit Pakkasem, a former government economics
\npolicy maker and now chairman of bank firm Tisco Group.<\/p>\n
But \"the way he handled things was like a typical
\ninternational technocrat\" who had no real understanding of the
\nreal-life situation in the Asian countries, Phisit told Dow
\nJones. \"I think he's been there too long.\"<\/p>\n
Several others said the U.S. domination of the IMF was a key
\nflaw of the IMF's approach in Asia and may explain why Camdessus
\nis leaving the organization two years before his contract
\nexpires.<\/p>\n
Charles Goodhart, an adviser to the Bank of England and
\nprofessor at London School of Economics, said Wednesday that the
\nIMF may have been \"carried away somewhat by its free-market
\nideology\" but that overall it faced no easy decisions in
\ncontaining the regional financial crisis.<\/p>\n
Although he declined to talk about Camdessus specifically,
\nGoodhart said the IMF suffered from a perception that it was
\nacting \"as a cat's paw for U.S. interests. If it hadn't been, I
\nthink it's advice would have been more easily accepted.\"<\/p>\n
Phisit said he believes that Camdessus -- a self-described
\n\"French socialist\" -- ultimately came into conflict with
\nWashington over huge financial losses for the fund in its Russian
\nprogram. Therefore, Camdessus's resignation is \"dignified,\" he
\nadded.<\/p>\n
Meanwhile, as a result of disappointment with the persistent
\nweakness in economies early in the Asian financial crisis despite
\nthe whirlwind tours by Camdessus and First Managing Director
\nStanley Fischer, the IMF stationed the head of its Asian desk,
\nHubert Neiss, on virtually permanent duty in the region in 1998.
\nBut Neiss, who spends a lot of his time in Indonesia where the
\nproblems remain most acute, will retire in January and will be
\nsucceeded by one of his deputies, Yusuke Horiguchi.<\/p>\n
The Asian officials said they hope there will be more
\nrecognition of Asia when a new managing director is chosen even
\nthough they said they understand the job traditionally goes to a
\nEuropean.<\/p>\n
But don't anticipate big changes in the IMF management
\nstructure as a result of Camdessus's departure and the lingering
\ncriticism the institution, according to Kunio Saito, head of the
\nIMF's Tokyo office.<\/p>\n
\"These issues are usually discussed at the time of a capital
\nincrease, and we just had a capital increase,\" he said.<\/p>",
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