He stood firm...
In the Throes of Disaster
I came across this write-up recently, and I found it to be particularly true in its assesment of the IMF during the Asian Financial Crises of 1997.
When the crisis (Asian Financial Crisis 1997) began, those in the West did not realize its severity. Asked about aid for Thailand (when its currency, the baht collapsed by 25 per cent on July 2, 1997), President Bill Clinton dismissed the collapse of the baht as "a few glitches in the road" to economic prosperity. The confident and imperturbability of Clinton was shared by the financial leaders of the world, as they met in September 1997 in Hong Kong for the annual meeting of the IMF and World Bank.
IMF Officials there were so sure of their advice that they even asked for a change in its charter to allow it to put more pressure on developing countries to liberalize their capital markets. Meanwhile, the leaders of the Asian countries, and especially its finance ministers were terrified. They viewed the hot money that came with liberalized capital markets as the source of their problems. They knew that major trouble was ahead: a crisis would wreak havoc on their economies and their societies, and they feared that IMF policies would prevent them from taking the actions that they thought might stave of the crisis, at the same that the policies they (the IMF) would insist upon should a crisis occur would worsen the impacts on their economy.
They felt however, powerless to resist.
In the end, only Malaysia was brave enough to risk the wrath of the IMF, and though Prime Minister Mahathir's policies - trying to keep interest rates low, trying to put the brakes on the rapid flow of speculative money out of the country - were attacked from all quarters, Malaysia's downturn was shorter and shallower than that of any of the other countries.
Read the last few sentences again and ask yourself this, are there any other leaders who would have the guts to do the same?
True, he isnt perfect and there have been accusations of cronyism (the names Syed Al-Bukhary and Vincent Tan come to mind), but one cant discount the good he has brought to the country...
And to us.