Purisima to IMF: Handle Europe’s crisis same as Asia’s in ’90s

MANILA, Philippines – Remember how the International Monetary Fund (IMF) handled the 1997/98 Asian financial-turned-economic crisis?

That same “forceful” approach the multilateral lender employed on struggling Asian countries then should be the same the IMF should do to quickly resolve the ongoing euro crisis, Finance Secretary Cesar Purisima said in a recent IMF-World Bank annual meeting in Tokyo, Japan.  

Purisima said he is echoing concerns over the lingering crisis in Europe expressed by ministers from emerging markets that have economic ties with the struggling countries in the west.

“There were a lot of discussions about the global economy especially [among] ministers from emerging markets who were a bit concerned that issues in Europe were not being resolved and addressed directly. We had a lot of discussions in that area,” Purisima said in an interview.

When the property bubble in Asia burst in the 1990’s resulting in full-blown and contagious economic crisis in the region, IMF and other multilateral lenders released bailout packages tied to government spending cuts and reforms that, after a few years, restored currency, banking and financial systems.

The IMF has imposed similar conditions on some of the bailout packages to euro countries struggling under the weight of their banking-turned-economic crisis, but austerity measures there have been widely contested by voters and politicians.

Purisima said institutions such as the IMF could help shape discussions in the eurozone to help the region emerge the soonest possible time from the crisis.

“It is the business of everyone, given that its global and everyone is affected by challenges of everyone and in emerging markets we still have a lot of poverty to address,” he said.

He cited the case of the Philippines who sends millions of Filipino workers to European countries. Filipinos working in health care, accounting, hotel and restaurants and in the maritime industry send money to loved ones at home. These remittances fuel consumer spending and investments, which in turn are core pillars of Philippine’s growth. – Rappler.com