IMF, World Bank Meet in Bangkok
Top concerns include Soviet needs, slow rebound of US economy, and capital shortfall
WHEN the world's top central bankers and finance ministers start gathering next weekend in the capital of this fast-track nation, they will face two worrisome global trends: economic sluggishness and a capital shortfall.More than 12,000 delegates are expected to flood Bangkok for the annual meeting of the World Bank and the International Monetary Fund (IMF) Oct. 15-17. They confront a stark world landscape clouded by a faltering recovery of the United States economy and lacking enough funds to salvage a free-falling Soviet Union, boost reform in Eastern Europe, and prop up struggling economies elsewhere. In contrast, Thailand, a free-market disciple that has grown at a double-digit clip over the past decade, is trying to buff an image tarnished by overdevelopment and too-fast growth. Two public holidays have been declared during the meeting so delegates can avoid the choking traffic jams that snarl Bangkok daily. One-fifth of the city's 6 million people live in impoverished ghettos. Scores of slum-dwellers have been moved from the vicinity of the $100 million convention center erected for the meeting. Authorities have launched a massive security operation. "Thailand is a very good example of both the positive and negative aspects of mainstream development in a Third World country," wrote Saneh Chamarik, a rural development specialist organizing a parallel conference to highlight the downside of Thailand's economic resurgence. At the meeting, World Bank and IMF officials will face a widening gap between global demand for capital and supply, bank observers say. Among the world's seven richest industrialized countries, known as the Group of Seven (G-7), national savings as a percentage of domestic output have dropped dramatically over the last decade. The G-7 includes the US, Japan, Germany, France, Britain, Canada, and Italy. The industrialized countries are expected to favor channeling more scarce resources to the Soviet Union and Eastern Europe, at the risk of confrontation with impoverished developing nations. Soviet President Mikhail Gorbachev signed an agreement Saturday with the IMF that grants the Soviet Union special association status with that 155-nation body. This move opens the way for the Soviets to receive large-scale Western technical aid to help move to a market economy and for participation in the annual meeting here. IMF managing director Michel Camdessus was reported to have said in Moscow that full Soviet membership was inappropriate, at least until Moscow and the republics work out their relationship. Also on the agenda will be World Bank priorities to sustain structural reforms and spur private-sector-led growth in developing countries, reduce poverty, and halt environmental decline. For example in Asia, a region generally marked by economic optimism, rapidly industrializing economies in South Korea, Thailand, Malaysia, and Indonesia contrast with nations with low or declining growth: Bangladesh, Burma, Laos, Nepal, the Philippines, Sri Lanka, and Vietnam. The region's two giants, India and China face disturbing economic imbalances requiring more stability and extensive restructuring, the World Bank says. For the Thai government, the convention is viewed as "a crowning achievement" for the country's economic success, says Vijit Supinit, governor of the Bank of Thailand. Ten percent annual growth over the last decade has produced a strong and vibrant middle class and raised literacy and life expectancy. Critics maintain the benefits have been selective and the price huge in terms of pollution, collapsing infrastructure, deforestation, and a still-wide gap between rich and poor. Despite rapid growth, one-fourth of the 55 million Thais live in poverty. Amid emerging political ferment following a bloodless military coup earlier this year, Thai officials worry about the possible fallout from too-slow growth.