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.