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Tuesday, 6 October, 1998, 19:41 GMT 20:41 UK
IMF chief warns of world crisis
Protesters demand IMF help for struggling economies
The head of the IMF, Michel Camdessus, has issued a gloomy assessment of the extent of the economic problems affecting countries around the world.

In remarks to the annual meeting of the World Bank and International Monetary Fund, he said the global economic crisis was now affecting the whole financial system, not just individual countries.

"We are speaking not just of countries in crisis, but of a system in crisis, a system not yet sufficiently adapted to the opportunities and risks of globalisation," he said.

Camdessus: Crisis not as bad as 1928 yet
The crisis "has already cost hundreds of billions of dollars, millions of jobs, and the unquantifiable tragedy of lost opportunities and lost hope for so many people, particularly among the poorest," he added.

He said the IMF had recently halved projections of world economic output as a result of the financial distress in Japan and the abrupt worsening of the economy in Russia.

But Mr Camdessus told the meeting the situation was not as dire as in 1928, when the world plunged into recession.

"If we keep a steady nerve, if all countries pursue stability, structural adjustment and orderly liberalisation of their economies this crisis can be overcome,'' he added.

Priorities included more market and government transparency, stronger banking and financial systems and private sector involvement.

He warned those hit hardest by the crisis to resist the temptation to resurrect trade barriers and engage in reckless inflationary financing.

Clinton calls for release of $18bn for IMF

Earlier President Clinton called for urgent steps to stave off the world's ''most serious financial crisis for half a century''.

Clinton cannot get Congress to release $18bn
With a quarter of the world in recession he warned the turmoil could spread still further unless urgent steps were taken.

But the president disappointed financial markets by failing to come up with specific measures on how the world's leading nations will tackle the crisis.

The American plan involves raising new money to help stabilise countries before they get into trouble, rather than trying to pick up the pieces afterwards.

But the BBC economics correspondent Ed Crooks says the president's credibility is undermined by his inability to persuade Congress to release $18bn of badly needed extra funds for the IMF.

World health depends on Japan

In his address Mr Clinton said: ''We must put a human face on the global economy.

''An international market that fails to work for ordinary citizens will neither earn nor deserve their confidence and support.

''We need both an aggressive response to the immediate crisis and a thoughtful road-map for the future.''

He reiterated calls for reform of the international financial system for the 21st century to avoid damaging boom and bust cycles.

Like Mr Camdessus, the president singled out Japan as a key problem and called for urgent reform of its ailing banking sector.

"The health of Asia and indeed the world depends upon Japan," Mr Clinton said.

He also commended his plan to build a protective wall around Latin America to stop the economic crisis spreading.

See also:

05 Oct 98 | Business
05 Oct 98 | imf
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