Abstract

The world is poised to enter a new era of human history as it sets forth into the twenty-first century. The new times promise unparalleled hope and breathtaking advances in every facet of life, but at the same time it can exact stiff penalties and suffering for those who fail to comprehend the unpredictable and volatile nature of today's interwoven global economy. For the International Monetary Fund (IMF), whose main duties include safeguarding the global economic and financial system, the current situation in Asia is especially alarming since most of the countries afflicted by this downturn, have broadly enjoyed growth unrivalled by the rest of the world for the past few decades. Since the crash, however, the IMF has begun to examine and analyze the woes and deficiencies that have caused this disaster to unfold. The result of the preliminary studies indicate that the region as a whole suffers from several weaknesses that were not readily apparent during the heydays of rapid development, which includes, the fragile public and private banking and financial structures; and unsustainable accumulation of short-term financing; and the problems associated with governance. Fortunately, for the world, the emergency funds and measures endorsed by the IMF were effective in curtailing the precipitous downward spiral of the Asian economies. However, it is not enough to just limit the damage, and the IMF has been called upon to devise means to prevent a recurrence of such eventualities in the future. To this goal, the IMF is in the process of strengthening the global economic architecture by enhancing surveillance, and developing "tired responses," that would protect and bolster financial and banking system around the world from dubious investments and loans, while continuing to liberalize international capital flows. The era of globalization is at hand. It could be said that it is an irrevocable trend. What is important for the world at this juncture is that stable growth accompanies this ongoing process so that all of mankind can experience its rewards.