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Making global markets work for all: The role of governments and institutions in securing a sustainable world economy. A short speech by Dr Tan Seng Giaw, DAP National Vice-Chairman and MP for Kepong at the meeting of the Council of the Socialist International, Palais des Nations, United Nations, Geneva, Switzerland, 23-24 November 1998. | |||||||
| Mr Chairman, Sir; Distinguished Delegates: As a social democrat from Malaysia, the issue of global economy is of especial interest to us. South East Asia including Malaysia has been badly hit by the economic crisis. First, this morning, some delegates mentioned the need to prevent the crisis reaching Europe. We hope that this tide can be stopped and that there will not be world economic recession. Nevertheless, I believe that because of the inherent weaknesses in the architecture of the world financial system, the crisis will go on to South America, Africa, North America and Europe. Secondly, there are many causes of the economic crisis. As the President (Pierre Mauroy) has said, each day nearly US$2 trillion changes hands in pursuit of speculative profits and only perhaps 5% of these are related to exchange of real goods and services. These massive currency speculations and movements of hedge funds as well as the domination of large corporations are major factors. We must not forget the 8-year Japanese recession and the previous devaluation of the Chinese Yuan. True, there are other factors such as the lack of democratic practices, corruption, bureaucracy and the relative lack of human rights. We are too dependent on American dollar. For us, the introduction of Euro is a good thing. The American reaction to the Euro may complicate the situation. Thirdly, it is a mistake | |
to think that all the South East Asian countries are in the same dire state. Obviously, some are better than the others. It is interesting to note that some delegates such as those from the French Socialist Party have advocated foreign exchange control. Since 1st September 1998, the Malaysian Government has imposed selective capital control primarily against speculators. This is against the advice of IMF and the U.S. Government. During the Socialist International Congress at the United Nations, New York, two years ago, I told the forum organized by the foundation of the German Social Democratic Party, that the transplantation of materialism from North America and Western Europe to East Asia had created three major global economic centres. After the economic crisis, the East Asian economy will recover and become stronger. This will not change things. The three major global economic centres will continue into the new millennium. The power of the big corporations will increase. Are institutions such as the IMF, the World Bank and the WTO able to cope with the changing world? No, certainly not. Mr Chairman, Sir, I propose that the Socialist International play a much bigger part to bring about a major review of the roles of the IMF, the World bank and the WTO in the next century. We need a drastic change in the architecture of the world financial structure. Dr Tan Seng Giaw | |||||
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