IMF played "positive role" in aiding Asia during 1997 crisis: official

SINGAPORE (AFP) - The International Monetary Fund (IMF) played a "positive" role in helping Asia to recover from the 1997 financial crisis despite widespread criticisms of the way the Washington-based lender handled the situation, its regional director said Tuesday.

"I think that the programmes that the IMF supported in the end were basically effective in helping (to) turn the situation around... so I think at the end of the day, the Fund played a positive role," regional director David Burton said in Singapore.

"It was the institution that came to help, it provided substantial financing... and I think at the end of the day, the recovery from the crisis which has been sustained and strong speaks a lot," he said.

Burton, who was speaking here at a luncheon co-organised by the Singapore Press Club, said "lack of transparency" were among the reasons why the measures prescribed by the Fund to Asian economies hit by the crisis did not immediately yield the desired results.

"The fact is those programmes were not initially successful for a variety of reasons including that they were not fully implemented, including in some instances lack of transparency," said Burton.

"There were a variety of reasons why they didn't initially fully restore confidence and prevent the decline in output that we saw," he said.

The IMF stepped in with major lending programs for Thailand, South Korea and Indonesia, who were among the worst hit by the financial crisis but the stringent conditions that came attached worsened the situation, critics had said at that time.

Malaysia chose instead to peg its ringgit to the US dollar to protect it from currency speculators, a move that was criticised at the time by the IMF, but which is generally now viewed as a wise decision.

Looking ahead, Burton said the region is in a stronger position to weather external crisis having undertaken the necesssary reforms in the aftermath of the 1997 financial meltdown.

"I would say that Asia is fairly well placed to cope with that sort thing," said Burton.

"Obviously it would be disruptive, it would have an impact on Asia but Asia has strengthened its own financial systems," he said.