Biggest Singapore Event

While the patronage system is in full swing in Malaysia following announcement of generous budget handouts yesterday, Singapore is in full swing to host its biggest-ever event -- the annual International Monetary Fund/World Bank Board of Governors meetings from Sept 11 to Sept 20.

Some 16,000 high-powered delegates from 184 countries will descend on Singapore in less than a fortnight. The number of visitors will be even higher as some delegates will bring their wives, families, partners or even mistresses. Another 2,000 local and foreign journalists will cover the event.

Accommodation will be a challenge. Singapore has 37,000 official hotel rooms. Will some of them be forced to stay in cheap hotels in the red-light district known as Geylang? Or will some stay in nearby Johor Baru across the causeway or Batam in Indonesia? haha.

Public service reminder to motorists during the convention:

The Suntec Singapore International Convention & Exhibition Centre will be closed to the public from Sept 8 to Sept 20, but the Suntec City Shopping Mall and the office buildings will remain open.

As for roads, a stretch of Nicoll Highway, Raffles Boulevard and Temasek Boulevard will be closed from 10pm on Sept 10 till 11.59pm on Sept 20.

Please see map for details of road closures.

The Singapore police are all primed to handle any unruly demonstrators during the meeting. Ten thousand police officers -- including the reservist Police force -- will be involved in the largest security operation for the IMF and World Bank conference in Singapore.

Well, I don't know anything about the agenda of the would-be demonstrators but dad definitely doesn't think IMF is such a great institution, judging from its track record in Asia during the regional financial crisis in the late 1990s. He sniggered at how IMF was initially hailed as the ultimate saviour of stricken Asian countries.

The IMF arranged generous international rescue packages for Thailand, Indonesia and South Korea in exchange for commitments to fiscal discipline, tight credit policies and financial sector reform. The general conditions sounded fair and reasonable but the policy makers didn't foresee or expect the reaction on the ground. Or maybe they did?

In the case of Indonesia, strict IMF-mandated fuel price hikes led to riots and deaths in Jakarta, and culminated in the downfall of long-time Indonesian strongman President Suharto. Former IMF managing director Michel Camdessus acknowledged that IMF was the root cause for the fall of Suharto in an interview with New York Times when he resigned in Nov 1999.

"We created the conditions that obliged President Suharto to leave his job," Mr Camdessus said. "That was not our intention."

Whether the change in the political scene in Indonesia was by chance or design, nobody will forget the chaos in the country. And nobody will forget the famous picture of Mr Camdessus, with his arms crossed in what was seen as an arrogant gesture, overseeing Suharto signing the agreement for an IMF bailout package worth nearly US$50 billion. The picture was widely used to personify Asia's loss of its independence.

Thailand and South Korea also underwent painful adjustments as part of the IMF bailout package. Singapore was strong enough to withstand the crisis and didn't have to seek foreign help. Malaysia undertook massive counter-IMF reforms without the IMF.

Both Malaysia and Singapore emerged stronger after the crisis, without having to go through as much pains as their neighbours.

The IMF approach was flawed. It was a prescription that could have strangled even the fittest economies. To restore faith in battered currencies, one of the IMF suggestions was tight credit policies, which meant high interest rates at a time when many businesses were still reeling from the currency deflation effect. High interest rates restored confidence in currencies in the short term but many companies collapsed.

Notice how many foreign -- mainly Western companies -- ended up as big buyers and owners of assets in Indonesia, Thailand and South Korea at bargain prices during the crisis?

Did the doctor create the conditions conducive for Western capitalists and other foreigners to own a big chunk of dying patients? The lender of last resort will probably maintain that it was not its intention. (The IMF seeks to represent the interest of the entire planet but, in reality, it is controlled by a handful of developed countries due to their overwhelming voting power. Five countries -- US, Japan, Germany, France and UK -- control nearly 40 per cent of the voting power as shown in the IMF chart.)

At the height of the crisis, IMF preached about the need for reforms in stricken countries but ignored the role of international capital, currency traders and hedge funds.

The sudden movement of the big money had a destabilising effect on many countries. Dr M's call for reform of the international financial architecture as part of the overall new regime fell on deaf ears. There was no doubt many Asian countries had to reform their faulty economic and political systems then. But the foreign and mainly Western capital must also share the blame, and be regulated to help avoid sudden and overly destabilising effect on the real economies.

The debate will continue for some time.

In the meantime, let the Singapore meetings and demos begin!