| |
Contributions from
the Column
Books and Media
Crisis prevention:
Regional approaches require staying power
Development policy:
Joseph Stiglitz under fire
PPP in the UN system:
The Industry Cooperative Programme
Online forum on “green”genetic engineerin
World champion in development assistance
6/2004 |
|
Crisis prevention:
Regional approaches require staying power
Jan Jost Teunissen (ed.):
A Regional Approach to Financial Crisis Prevention. Lessons from Europe and Initiatives in Asia, Latin America and Africa. Den Haag, Fondad 2002, 208 pages,
¤ 25.00, ISBN 90-74208-19-3
This collection of writings published by the Dutch "Forum on Debt and Development" (Fon-dad) presents the findings of a conference staged by the Czech National Bank. The core issue it addresses: the role that could be played in monetary and financial crisis prevention and management by regional groups of national states.
Against the backdrop of the numerous financial crises seen in recent years and the apparent inability of the International Monetary Fund (IMF) to prevent such crises being repeated, the authors of this book, hailing from both industrial and developing countries, examine the ways in which regional cooperation could help. The opening paper is penned by Charles Wyplosz, who looks at the lessons to be learnt from European monetary cooperation since the Second World War. Chapter two deals with the problems faced by transition economies in Eastern Europe, section three covers the initiatives taken in Eastern Asia and Mercosur to intensify monetary cooperation. And a fourth chapter rounds off the review with five papers discussing how regional and global institutions are placed to help prevent and manage crises.
Charles Wyplosz's contribution on the experiences of the Western European economies pro-vides a superb introduction to the subject. Pointing out that trade integration, exchange rate stabilisation and the creation of efficient institutions enjoyed priority status in Europe, it notes that international capital movements were for a long time limited. Exchange rate stability was considered vital for stepping up trade. Wyplozs stresses the importance of gradual integration and the relevance of confidence-building measures and efficient institutions. Restrictions on capital movements are deemed by the author to have been useful at least during certain phases.
Not all articles are of the same high standard but they offer a wealth of ideas for the debate on the role of regional institutions in monetary and financial policy. Yung Chul Park provides a detailed account of the prospects of the Chiang Mai initiative. Drawing lessons from the Asian crisis, the Asean nations China, Japan and South Korea agreed in May 2000 to provide each other with liquidity support in the event of a crisis. Park paints a clear picture of the po-litical obstacles to this cooperation process. Daniel Heymann discusses the experience of the Mercosur countries. The common market neither contributed to the crisis in Argentina, nor can it – in Hymann's view – help significantly to haul the country back out of crisis.
Regional cooperation can help prevent crises arising but the core message of this book is that it cannot provide a quick fix once crisis has struck. Regional approaches to financial crisis prevention call for staying power, we are told, and require considerable political effort on the part of the countries concerned. This book will appeal to a relatively limited readership – but for them it is a book well worth reading.
Heribert Dieter
|
