Managing the global economy

This chapter addresses some of the opportunities and consequences for policy actions, specifically in light of the 1997-1998 East Asian financial crisis. It offers a reassessment of the International Monetary Fund’s (IMF) response to what has been, and acknowledged as having been, essentially a private sector crisis, and the perennial request for yet more and better statistics. The IMF proved to be remarkably slow in trying to handle what was the crucial aspect of the whole crisis, the private sector indebtedness. China clearly is not a winner in the economic sense as its export markets have been reduced, though its export market is a relatively small proportion of its total economy. Discussions about possible reforms to the international financial architecture received considerable attention at the Birmingham Summit. In the postwar World War II years, a financial crisis resulted primarily from public sector laxity.