The International Monetary Fund has already received a lot of flak from private experts for giving the wrong advice to troubled Asian economies. Another analysis to that effect, therefore, is nothing new. What is new -- and significant -- is that the Japanese government, in an official report, has now embraced the view of those critics.
The annual report on international trade, released last week by the International Trade and Industry Ministry, says in effect that Asia's financial and economic crisis, which started with a sharp devaluation of the Thai baht in July 1997, was aggravated by misguided remedies prescribed by the IMF.
The white paper says Asia's currency crisis of 1997-98 was different in nature from the one that hit Latin American states in the 1980s. In the latter case, the underlying problem was chronic current-account imbalances stemming from large government budget deficits, weak export competitiveness and low savings rates. In other words, the Latin American crisis was triggered by deteriorated economic fundamentals.