Ramos links IMF to Asian dilemma

Ramos links IMF to Asian dilemma

MANILA (Reuters): The International Monetary Fund's rescue plan for Indonesia and Thailand may have worsened the two countries' economic problems, Philippine President Fidel Ramos said.

Ramos made the statement in an article he wrote for the June 12 issue of Asiaweek news magazine, excerpts of which were released by the presidential palace yesterday.

The palace news release quoted Ramos as saying the IMF formula of tight monetary policy for stabilizing an economy "might have unwittingly worsened Thailand's problem by accelerating the rate of corporate and banking failures".

"And in Indonesia, the raising of fuel prices required by the IMF triggered the Jakarta riots that forced President Soeharto to step down," Ramos said.

He urged multilateral institutions to develop quick-response mechanisms "to contain a local financial crisis before its contagion spreads -- and new policy frameworks to replace the conventional policy tools that have failed to work".

Ramos said it was perhaps time for the Manila-based Asian Development Bank to define its programs to better suit Asian countries.

Industrial countries must also take a more active part in bail-out programs for troubled economies, he said.

"After all, globalization means everybody having an interest in everyone's continuing economic health."

Ramos also said fund managers should "begin to care for the social consequences of their investments in developing countries, where political systems are still so fragile that economic crisis can break them".

There was also need for more transparency in economic information.

"Governments should agree to provide accurate and current data on their basic indicators and those that reflect the health of their banking sectors," he said.

Ramos spoke of dangers posed by a global market to local cultures, citing both China and India, which "are trying to resist -- in the end perhaps vainly -- the inroads of the fast- food chains of the dominant Western culture".

He added, "In both these great countries -- virtual civilizations by themselves -- nationalism could still turn virulent, if their economies should experience a severe downstream or if their claims to great power status become frustrated," Ramos said, according to the release.