The IMF was not effective in allocating the funds that has led to impact on the Asian banks and economy, say Toyoo Gyohten, president, Institute for International Monetary Affairs, Japan. He adds, The IMF during the last financial crises in 1990s had focused on the Latin America and has focused too much at the Central East of America and Europe during the ongoing global financial crises. Therefore there is a need for Asian countries to establish new model for finances based on trust and prudence that will meet up with the needs of the crises he says. In 1997, the Japanese financial authorities intrepid proposal for a regional alternative to the IMF, called the Asian Monetary Fund (AMF). We need to therefore keep on working towards the crises and we wish that India should join the AMF, says Gyohten.
According to experts the financial crises in the developed countries is said to have a deeper impact on the emerging markets with exports going down drastically, withdrawal of foreign investments leading to freeze of capital flows and crashing of stock exchanges. The stock exchanges in the Asian markets came down by almost 50% as compared to the exchanges in the developed countries that were down by 30%, during the last year.
Meanwhile, Harinder Kohli, founding director and chief executive, Emerging Markets Forum, in its concluding remarks at the end of the Fourth Emerging Markets Forum said that there is a need to bring reforms in the global financial architecture with respect to governance and economic structure. The IMF remains technically stronger but needs some changes. The key to bring valuing IMF more effectively is to increase our voice and vote of the emerging markets. The IMF is taking larger initiatives to voice it. Lesetja Kganyago, director general, national treasury of South Africa is expected to meet the ministers of G20 countries to bring forth these aspects. We need to put forth the views of emerging countries in a modest but direct way to the developed countries, says Kohli.