SINGAPORE, 13 September 2006 — Much of the focus of the IMF-World Bank meetings has been on Singapore’s banning of outdoor protest and the baring of 28 activists from entering Singapore during the meetings which begin today.
However, the Singapore government and many of the Asian delegates will be focused on another story - the revival of the “miraculous Asian growth story.” For the host nation, hosting the IMF-World Bank meeting is being presented as a “coming of age.” Singapore’s $118 billion economy has been enjoying its longest expansion in five years and signs of a dynamic economy such as rising prices of luxury property are becoming visible.
Singapore’s growing economy is not unique to Asia. The IMF’s managing director, Rodrigo de Rato says,” Asian countries’ commitment to openness, trade, and private sector development have made the region the most dynamic in the world.” The statistics that support Rato are staggering. “Asian Development Outlook 2006,” published by the Asian Development Bank, notes that: “Aggregate gross domestic product for the region expanded by a robust 7.4 percent in 2005. Growth was underpinned by a favorable external environment and by continuing progress on domestic reform issues. Looking forward, the baseline projection is for continued robust growth.”
This scenario is very different from the last time the IMF-World Bank meetings were held in Asia - which was in Hong Kong in 1997, just as Asia was about to enter its “economic crisis.” Then, the relationship between the IMF and Asia was expressed through the picture of then managing director of the IMF, Michel Camdessus looking over then Indonesian President Suharto signing a bailout package for the Indonesian Economy. The IMF became the “villain of choice,” for Asian governments and even international economist, Professor Jeffery Sachs slammed the IMF for, “exacerbating,” the situation, as countries like Indonesia, South Korea and Thailand went into an economic and social meltdown.
What has changed since then? The reasons have been fairly straightforward. Debts were restructured, companies with bad loans were allowed to go bankrupt and corporate governance improved. Corruption which had been tolerated in the good times no longer became tolerable.
