core sector communique

IMF Chief Signals New Chapter in Ties with Asia

IMF Survey online

July 7, 2010

• Rebuilding relationship with Asia a main IMF goal over next 12 months
• Korea conference occasion to explore how IMF might better help Asia
• Asian ambassadors echo desire for closer IMF-Asia ties

IMF Managing Director Dominique Strauss-Kahn welcomed more than 20 ambassadors from Asia to a June 30 reception at the IMF’s Washington headquarters, ahead of a key conference in South Korea that the IMF hopes will signal a new chapter in relations with this dynamic region.

Ties between the IMF and many Asian countries have been strained since the financial crisis that engulfed Asia over a decade ago, prompting the IMF to make sizable loans to many countries in the region.

In a welcoming address to the ambassadors and other officials, Strauss-Kahn reflected on the region’s memories of the Asian financial crisis, emphasizing that rebuilding the institution’s relationship with Asia was “one of the main goals of the IMF over the next 12 months.”

“We don’t want to hide from our responsibilities, but on the other hand, we want to be positive and forward looking,” he said.

Looking forward

The IMF chief said the conference—which is being jointly organized by the IMF and the government of Korea, and will take place in the Korean city of Daejeon in mid-July—would be an occasion to explore how the IMF might be of help to Asia.

“Even though there are some parts of Asia which are doing better than others, there are different kinds of assistance and advice that we can provide to different countries,” he said. The IMF can provide services in three main areas: technical assistance, funding, and policy advice.

A listening IMF

Strauss-Kahn’s remarks were welcomed by Don Pramudwinai, the ambassador of Thailand, one of the countries that received IMF financial assistance during the Asian crisis.

“I see it [the IMF] is more open-minded now,” Pramudwinai said “The response I heard from the Managing Director is that he is ready to listen.”

Inviting his fellow ambassadors to the IMF-Korea conference, Seoul envoy Han Duk-Soo, said the meeting would provide an opportunity to showcase Asian development and growth. Han praised Asian economies for their openness and prudential regulation, coupled with appropriate levels of government intervention.

“Asia will be the model of how to combine environmental protection with growth; and how to combine prudential regulation with freedom in business,” Han said.

Asia’s role in the global economy

Over the past few months attention has been heavily focused on Asia, which has been leading the world out of the worst economic crisis in over half a century. The pace of the recovery and the predictions for Asian growth—according to one IMF estimate Asia is set to become the largest economic region in the world over the next two decades—has fueled a sense of renewed confidence in the region.

“Asia is the new engine for growth, and not only for the region. It is about time the world recognized the importance of Asia, and this conference in Korea is leading us in that direction,” said Mohammad Wahid Hossain, economic minister at the Embassy of Bangladesh.