Political will essential to end Asian crisis: Rubin

Political will essential to end Asian crisis: Rubin

DAVOS, Switzerland (AP): A key U.S. official said Saturday the
global economy needs reform, but that countries must take charge
of their own problems.

"There are no easy answers and no magic wands, and each of us
must do our part" in stemming the financial crisis which started
in Thailand in 1997, Treasury Secretary Robert Rubin told an
audience of political and business leaders.

Rubin was speaking at the World Economic Forum, where concerns
over how to pull Russia and Asia out of economic crisis, as well
as Brazil's problems, have topped the agenda.

"The critical factor -- whether in countries responding to
crisis or in countries working to avoid crisis -- is political
will," Rubin said.

U.S. officials in Davos, including Rubin and Vice President Al
Gore, have stepped up pressure on Japan to do more to revive the
Asian economy.

"The world looks to Japan to make some appropriate changes in
the way it discharges its responsibilities as the second-largest
economy in the world," Gore said Friday.

"There have been some important, positive developments in the
last six months or so, including actions to promote growth in
many industrialized countries and progress in Korea and
Thailand," Rubin said. "But there are also many serious
challenges and risks ahead."

He dismissed ideas that an early-warning system should be
established to warn of impending financial crisis, saying he
could see no method of prediction "even remotely reliable enough
for such a system."

"In addition, the early warning itself could create precisely
the instability and even panic that such a system is designed to
prevent."

Rubin also urged the private sector to play a greater role in
dealing with economic crises, but conceded defining that role is
"extraordinarily difficult."

His reform targets included "sound currency systems" and
boosting social safety nets where needed.

He contrasted the growing U.S. trade deficit with European and
Japanese surpluses, saying the world economy "cannot sustain
indefinitely the large imbalances created by the disparities in
growth and openness between the United States and its major
industrial trading partners."

Among officials renewing calls for quick action to revive Asia
was Hong Kong Chief Executive Tung Chee-hwa.

"If the lights are switched out in Asia, the impact on the
global economy will be really unthinkable," Tung told delegates.

"Japan now has to be as creative and inventive as the
Americans and the Europeans," added Lee Kuan Yew, Singapore's
senior statesman.

A day after the lower house of Russia's parliament approved
the draft 1999 budget, Russian Prime Minister Yevgeny Primakov is
to take part in a forum discussion about finding ways out of
Russia's economic crisis.

The advent of Europe's single currency also has attracted
attention. German central bank president Hans Tietmeyer called
for flexibility within Europe as part of making the euro "a
lasting success."

Helmut Maucher, chairman of international food and drinks
giant Nestle, said the financial criteria set up for countries to
enter the European monetary union had placed pressure on
governments such as Germany to reduce social spending.

"This is good for Europe and it's good for the consumer,"
Maucher said.