gc98

This conference investigated the causes, consequences and global economic and financial implications of the Asian market turmoil of 1997-98. Speakers who were experts in economics, business, policy and media came to share their knowledge of how the economies of Asia, Latin America, the United States, Russia, Europe and other regions were impacted as well as offer ideas about reforms that could help prevent future crises.

The Issues

The opening panel offered a global overview of the issues at hand. Speakers discussed the state of Asian economies, how nations worldwide have been affected by the Asian market downturn, and the role of the IMF in international affairs. As the global community's needs become more interrelated, should nations pressure one other into reforming their systems? Should the IMF play a greater role in regulation? When does international lending amplify the risk of creating a "moral hazard"? How do nations stay economically responsible while keeping markets open and free? These questions and others set the stage for the debates to come.

The second panel focused on countries in Asia that were particularly affected in recent months by economic troubles. Speakers brought up specific problems they saw in these nations' economies in banking, finance, and regulation, but also discussed broader obstacles posed by political and social institutions. Still others believed that the "Asian crisis" might actually be an opportunity, giving these countries the chance to put their houses in order and continue down the path to more sustainable growth.

Our panel on the IMF and financial market issues discussed the role of international agencies in global economic affairs. Are these agencies important in averting economic crises, or do they actually help perpetuate them? Where is the balance between reform and intervention? Do ratings agencies adequately forecast imminent economic problems? Speakers voiced their opinions about the international financial system and suggested ways to improve it.

China and India were the topics of the fourth panel's discussion. These emerging economic powers were less affected by the market downturn than other Asian countries in 1998. Why? Speakers pointed out the differences in China and India's economic and political systems and discussed recent reform efforts. Would these be enough to prevent future crises in these countries?

Japan's current situation in the global economy sparked a vigorous debate among speakers in the fifth panel. They delved into the issues of Japan's role in Asia's economic difficulties and of whether or not the country's problems could be resolved in the foreseeable future. Some believed that Japan's resources and fundamental strengths would see the nation through while others asserted that equally fundamental structural faults would hold it back. Had Japan's "miracle" of rapid growth ended, or were its recent economic woes just a blip in economic history?

Our sixth panel on Latin America and Mexico provided some perspective on regional economic crises, as many of the region's problems in 1994 mirrored recent ones in Asia. Speakers were optimistic about the slow but sure improvements in Latin America's situation. But they also recognized that the reform effort, particularly in government and in wealth distribution, needed to continue. In what ways were these countries still at risk? Could they withstand external economic storms?

We also looked broadly at Western economies: those of the United States, Europe, and Russia. How will economic union in Europe fare? How will it affect the world's economy? Will Russia succeed in its efforts to reform its economy and prosper? How does the U.S. economy's current success color our picture of how other countries should run their economies? Speakers addressed these questions and more in the seventh panel.

In our final session, we were pleased to present a panel of four Nobel laureates of economic sciences. The issues they discussed ranged from education and human capital to portfolio theory and economic development in African nations.

Institute chairman Michael Milken lent further insight to these discussions with his presentation, "The Asian Crisis in Perspective."

The Audience

Our nearly 1,000 guests included institutional portfolio managers, representatives of securities firms and commercial banks, leading academics, business leaders with direct investments worldwide, senior policy officials from several countries and in international posts, key business and financial media, and representatives of multinational lending and governing agencies.

The Sessions

We welcomed guests beginning Wednesday evening, March 11, 1998. Our program convened throughout the day on Thursday, March 12, 1998, and continued through midday on Friday, March 13.