U.S. apathy over crisis may lead to chaos: Goh

U.S. apathy over crisis may lead to chaos: Goh

NEW YORK (AP): The United States must lead the battle against
the spreading Asian economic crisis or risk watching the world
plunge into uncontrollable chaos, Singapore's prime minister
said.

"A prolonged economic downturn in Asia will revive latent
tensions against the West and may unravel the security
architecture that the U.S. spent blood and bullion to erect over
the last 50 years," Goh Chok Tong said in a speech Friday at the
Asia Society's annual dinner.

Goh sharply criticized the International Monetary Fund's
conventional efforts to stem the crisis by coordinating emergency
funding for troubled economies in Indonesia and elsewhere in
Asia. Critics say the IMF's efforts have usually come too late to
stop the recipient country's currency from plunging in value.

"The IMF has its weaknesses which must be addressed," Goh
said. However, the policies of the world financial institutions
are hampered by U.S. demands, he said.

"If the IMF and the World Bank are increasingly regarded with
suspicion for simplistic and doctrinaire free market solutions,
this may be because of the conditions that the (U.S.)
administration and Congress have sought to place on IMF funding,"
he said

The Clinton administration and Congress "must set aside their
differences to work for new IMF funding," Goh said, prompting
applause from the primarily business audience.

For now the IMF and the World Bank are the only international
institutions available to deal with the crisis, Goh said.

Bailout

The IMF is managing a multibillion-dollar bailout plan for
nearby Indonesia, where inflation is now soaring and the nation
expects over half of its 202 million population to fall below the
poverty line by year's end.

"Former President Soeharto was clearly unhappy with the IMF
but had no intermediary to appeal on his behalf," Goh said.

More than the Asian-Pacific security is at stake in ending the
crisis, Goh said. International trade accounts for more than 30
percent of the American economy, and 40 percent of U.S. exports
are absorbed by developing countries, he said.

"If countries cannot get access to the raw materials, goods
and services they need through peaceful and open competition,
they will resort to other means," Goh said.

"Clearly, if the real problems of global markets are not
addressed, it is only natural that countries everywhere will take
matters into their own hands," he said.

"A return to global tensions cannot be ruled out," he said.
"History teaches us that economic rivalries almost invariably
have political and military consequences if not contained within
an agreed framework."

Poor in resources, Singapore's economic success traditionally
has relied on an educated work force. Since the start of the
financial crisis in Asia, Singapore's currency has weakened
considerably, but has held up better against the U.S. dollar than
its neighbors' currencies. Also, the cost of doing business in
the city-state had steadily risen to levels higher than its
competitors, even before the crisis.