G-24 blames speculators

G-24 blames speculators

By Vincent Lingga

HONG KONG (JP): Developing countries called yesterday for
international recognition of the role of speculators in setting
off the spread of the recent currency crisis from one Southeast
Asian country to others in the region.

The Group of 24 Ministers (G-24), which represents developing
countries in negotiations on international monetary affairs,
acknowledged that domestic policy weakness contributed to the
recent Southeast Asian currency crisis.

"But the ministers also emphasize the need to acknowledge the
role of speculative activities and other external factors that
spread the crisis, through contagion effects, to other countries
with sound macroeconomic fundamentals," G-24 said in a
communique.

The G-24 issued the communique yesterday afternoon after
concluding a two-day meeting here to discuss agenda items of
great interest to developing countries to be taken up at the
IMF's and the World Bank's annual meetings which start here
Tuesday.

While the G-24's Venezuelan chairman Antonio Casas Gonzales
was presenting the communique at the convention center last
night, Malaysian Prime Minister Mahathir Mohamad launched another
attack on currency speculators at a meeting in a nearby hall.

Speaking at a packed last session of a World Bank seminar on
Asia, Mahathir again blamed what he called a few rich rogues and
currency traders whose greed had played a big part in the recent
turmoil in Southeast Asia's financial markets.

"For almost half a century the countries of Southeast Asia
have toiled day and night to better the lot of their people ...
But a few people in the media and in control of big money seem to
want to see these countries, in particular Malaysia, to stop
catching up with their superiors (Western countries)," he said.

He said the 20 percent devaluation of the ringgit meant
Malaysian's purchasing power had fallen 20 percent while currency
traders became richer.

"I, therefore, suggest that currency trading be stopped, made
illegal because it is unnecessary, unproductive and immoral. We
need to buy money only when we want to finance real trade," he
said.

Soros

But the Malaysian leader's 16-page speech stopped short of
repeating Mahathir's attack on American financier George Soros,
whom last month he called a moron with a lot of money and accused
of being one of the few rogues behind Southeast Asia's financial
turmoil.

Soros will speak at a seminar on global integration due to be
opened here this evening by World Bank President James
Wolfensohn.

The G-24 ministers also said they were greatly concerned that
Asia's growth prospects were being affected by the shock of
financial turmoil in dynamic Southeast Asia.

"We are concerned that the currency turmoil will also affect
Japan's recovery because the Southeast Asian region provides
large markets for Japan's exports and capital," G-24 chairman
Gonzalez said.

The communique said developing countries had a common stance
on various issues and programs which would make up the main
agenda of the IMF-World Bank meetings.

The ministers said they supported the IMF-World Bank campaign
against corruption and its campaign for the promotion of good
governance as a key component of development.

"We also express full support for cooperative international
efforts to combat transnational bribery, money laundering,"
Gonzalez said.

But the ministers emphasized the need to avoid the application
of conditions based on subjective judgments to ensure members
were treated uniformly based on objective criteria.

The finance ministers and central bank governors of the Group
of Seven industrialized countries (G-7) also held a separate
meeting here yesterday, discussing, among other things, Southeast
Asia's recent financial crisis.

Mitsuzuka

Japanese Finance Minister Hiroshi Mitsuzuka, who chaired the
meeting, said the ministers hoped Thailand would vigorously carry
out the IMF's program in order to settle its financial situation.

United States Secretary of the Treasury Robert E. Rubin said
the G-7 reaffirmed its agreement that exchange rates should
reflect economic fundamentals and that excessive volatility and
significant deviation from fundamentals were undesirable.

"In this context, we emphasized the importance of avoiding
excessive depreciation where this could lead to the reemergence
of large external imbalances," Rubin said.

Rubin said the ministers also underscored the importance of
extra measures to enhance the transparency and supervision of
financial systems.