February 13, 2000
Bangkok, Thailand - Outgoing IMF chief Michel Camdessus Sunday proposed a shake-up of the annual summit of rich nations to address mounting criticism that globalization was benefiting rich nations at the cost of the poor.
Camdessus, in his last public speech before stepping down after 13 years as managing director of the International Monetary Fund, said incoherence in international policy-making was stifling growth. The world had a golden opportunity to insulate itself from financial upheavals and to harness the opportunities opened up by rapid economic change to narrow the ``potentially explosive'' gap between rich and poor, he said.
``This suggestion is modest. No doubt we will have to be more imaginative if we want humanity to become aware of and to assume responsibility for the global aspect of its destiny,'' Camdessus told a summit of the U.N. trade and development agency UNCTAD. ``We must provide the world with institutions adapted to these challenges,'' he said.
Camdessus suggested that the annual summit of the Group of Seven industrial nations plus Russia be replaced every two years by a meeting of the heads of state and government of the countries about 30 at any one time -- that have executive directors on the boards of either the IMF or its sister agency in Washington, the World Bank. Because the executive directors also speak for countries besides their own, such a meeting would be representative of the IMF's 182-strong membership, Camdessus said. The head of the United Nations should also attend, he said.
He said the plan ``would offer a way of establishing a clear and stronger link between the multinational institutions and a representative grouping of world leaders with unquestionable legitimacy.'' He said his proposal could be discussed at this year's G7 summit in Okinawa, Japan. The group's other members are the United States, Germany, France, Britain, Canada and Italy.
The weeklong UNCTAD summit began Saturday and is being attended by about 3,000 delegates from 190 countries, mainly developing states. The conference is aimed at shaping strategies to ensure trade is utilized to underpin development of the world's emerging economies and least developed countries.
It is the first large gathering of trade ministers and officials since the failure at the World Trade Organization's ministerial meeting in Seattle in December to launch a new round of global trade talks. ``Clearly, the trade talks need to be put back on the rails, and in doing so we need to convince the public and political leadership in developing and developed countries alike -- that only multilateralism can succeed in humanizing globalization,'' Camdessus said.
The IMF is an object of hate for many activists who blame its orthodox economic prescriptions high interest rates and budget belt-tightening for worsening the pain of countries that run into balance of payments problems and seek bailouts from it. Tacitly acknowledging the fierce opposition often aroused by the Fund's rigorous economic policies, Camdessus said: ``Popular support for stabilization and reform cannot be counted upon unless the whole population, including the poorest...is able to participate in the formulation of policies and, of course, in the benefits of those policies.''
Camdessus was denounced last week as a ``war criminal'' by Alejandro Bendana, a Nicaraguan activist with Jubilee South, a development pressure group. Just before Camdessus's speech in Bangkok Sunday, an unidentified protester pushed a cream pie into his face. The IMF chief was taken aback but composed himself quickly.
Camdessus spoke of his emotion in stepping down from his job and defended the policies the IMF had overseen to guide Asia out of its financial crisis in 1997 after a sudden flight of foreign capital exposed deep economic flaws across the region. Reaching out to his critics, Camdessus praised the people of the countries affected, saying they had shown determination to overcome adversity and a readiness for renewal.
``We should not pretend that the reform process is over, but what is important is that economies have been stabilized, that fundamental changes in the financial and corporate sectors have been initiated, and old styles of governance are being overhauled or abandoned,'' he said.
The world now enjoyed improved prospects for sustainable growth, with output likely to exceed three percent in advanced countries and about five percent in developing countries. ``The world now has a golden opportunity...to press forward with making itself less vulnerable to the kind of upheaval that we saw at the end of the 1990s,'' Camdessus said.
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