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World: Leaders Of IMF And World Bank Call For Responsibility

  • Robert Lyle

Hong Kong, 23 September 1997 (RFE/RL) - The plenary sessions of the annual joint meetings of the International Monetary Fund (IMF) and the World Bank that opened today in Hong Kong are to sum up the week-and-a-half of intense earlier activity.

The meetings bring together the finance ministers and central bank governors from virtually every nation on earth. In thousands of private get-togethers, public fora, receptions, dinners and casual hall-way meetings, the world's financial community takes advantage of this occasion to conduct an enormous amount of economic business.

It is also a time for assessing the situation of the global economy -- to catch the concerns and complaints, early warnings and quiet cautions -- from even the most remote corners of the world economy.

"In this economy, policy mistakes by anyone, even by one small country, are quickly punished by the markets, and reversing those mistakes is a lot more difficult," said one World Bank official.

This ear-to-the-ground assessing is a particularly important part of what the leaders of the World Bank and the IMF do and their formal remarks at the meetings often show the direction in which these two institutions will be moving in the months ahead.

In Hong Kong today both IMF Managing Director Michel Camdessus and World Bank President James Wolfensohn emphasized the need for unity.

Camdessus said that all of the participants in the global economy have to take responsibility for their own actions -- individual countries as much as the private investors who bring the money.

"Certainly there are risks in tapping global markets," the IMF chief said, but they also provide "tremendous opportunities" to accelerate growth and development.

As each takes responsibility, there is also need for "international solidarity in this new global context," said Camdessus. After all, problems -- contagion -- spreads quickly, overwhelming even those who have done nothing wrong, he said. Neighboring countries must start looking out for each other.

He suggested forming regional groups in a "club spirit among neighbors" to work together, helping encourage each other to pursue sound policies and catch problems early.

He cited the model of the G-7 group of major industrial nations as one that has done a good job of mutual surveillance.

World Bank President Wolfensohn's called for inclusion stemmed from his concerns about the growing gap between the rich and the poor in the global economy. "In many ways, this is the best of times for developing nations," with solid growth being shown by many and the reform programs in East and Central Europe continuing to advance.

But he also said that in many countries, including those of the former Soviet Union, the old and unemployed have become even more vulnerable amidst the turbulence.

If everyone doesn't start working to stop this growing divide between rich and poor, both within countries and between countries, he said, the number of people in acute poverty could grow to 5 billion people in the next 30 years, the environment would deteriorate over time and the number of wars would increase.

This is a "time bomb" which could "explode in our children's faces," he said.

"There are not two worlds," said Wolfensohn, everyone is breathing the same air, degrading the same environment and now sharing the same financial system. Organizations like the World Bank must start thinking beyond just individual projects to finance, but begin developing larger national -- and then regional -- strategies for dealing with the problems and launching systemic reforms.

Because in the end, he said, to succeed the global economy must be inclusive. And everyone must take personal responsibility for making sure that all get their chance.