Despondency and fear hung in the air at last year's IMF/World Bank meeting. The contrast with the prevailing mood of self-congratulation and complacency in Washington last month could scarcely be more stark. The oft-repeated view was that the worst of the emerging market crisis is past, that major emerging-market economies in Asia and Latin America are either well into recovery or poised for it and that growth in the developed economies of Europe and Japan will take the pressure off the US to be the world consumer of last resort.
Kang Bong-Kyun, minister of finance and economy for Korea, says his country will record 7% GDP growth in 1999, following a 5.8% contraction last year. It has rebuilt foreign exchange reserves from close to zero at the end of 1997 to an all-time high of $65 billion, thanks to a record current account surplus of $40 billion in 1998 and $20 billion this year.
Thailand also has rebuilt its foreign exchange reserves to $32 billion, twice its short-term external debt, just two years after nearly losing everything: this on the back of a current account surplus equivalent to 12% of GDP in 1998 and 9% of GDP this year.