Back with some degree of relevance in the aftermath of the global financial crisis, the International Monetary Fund (IMF) opens Monday a high-level gathering in Daejeon, South Korea, with the aim of mending its tarnished relations with its Asian members.
The gathering, which brings together more than 500 high-level participants, including finance ministers, central bank governors, and business leaders from across the region, will be drawing lessons from the past and discussing Asia’s newly found leadership in the global economy.
Managing director Dominique Strauss-Kahn, who is set to open the conference Monday alongside South Korean Minister of Strategy and Finance Yoon Jeung-hyun, said the gathering would outline how the IMF should, in the future, work with Asian countries, institutions and regional institutions.
Strauss-Kahn said the gathering, organized under the theme “Asia 21: Leading the Way Forward”, was an occasion “to rebuild, to renew the relationship with the region, to take stock of what has been done in the past, rightly or wrongly.”
The IMF is suffering from legitimacy problems ever since its failure to deal with the Asian financial crisis, which in recent past translated into a budgetary crisis for the financial institution as developing countries became reluctant to borrow.
Tables are turned for the IMF with the onset of the US-led mortgage crisis in 2008 and the eurozone economic crises revamped its traditional role as the lender of last resort.
The Washington-based institution said the economy worldwide was recovering faster than expected, even though Europe still had to deal with its debt crisis and keep it from infecting other regions of the world.
The IMF raised its 2010 world growth forecast to 4.5 percent from 4.1 percent in April. Its US growth forecast rose from 2.7 percent to 3.3 percent. The outlook for eurozone nations remained unchanged at 1 percent.
The agency raised its 2010 growth forecast for China to 10.5 percent from 10 percent in April, for Japan to 2.4 percent from 1.9 percent and for India to 9.4 percent from 8.8 percent. The estimate of the region’s growth rose to 7.5 percent from 7 percent.
Growth projection for ASEAN-5 economies — Indonesia, Malaysia, the Philippines, Thailand and Vietnam — was also revised to 6.4 percent from 5.4 percent in April because of stronger trade and investment.
However, in 2011 the economy of ASEAN-5 countries would slow to 5.5 percent as fiscal stimuli would be withdrawn after the economy showed recovery, the IMF said.
In Daejeon, economist Michael Spence, who won a Nobel prize in 2001 for his groundbreaking work on the dynamics of information flows and market development, will address participants who will also hear a keynote speech from top banker Josef Ackermann.
A final-day roundtable, under the heading of “Asia 21, Leading Global Growth”, will include among the speakers the finance ministers from Thailand and Singapore, Korn Chatikavanij and Tharman Shanmugaratnam; Asian Development Bank president Haruhiko Kuroda and Standard Chartered CEO Peter Sands.
Daejeon, dubbed “the city of culture and innovation”, is home to many of Korea’s research institutes. The city was chosen as the conference venue partly because Korea currently holds the chair of the Group of 20 leading advanced and emerging economies.
The G20 emerged as the premier forum for international economic cooperation during the recent financial and economic crisis.
