Wibisono said several speakers also stressed the need for the international financial system to be more responsive to developing countries so they could benefit from globalisation. Where change reflects unwarranted euphoria rather than underlying fundamentals, governments can take steps against an unjustified level of capital inflows that leave a country vulnerable to subsequent rapid capital outflows. He said that with the advent of globalisation and unprecedented financial flows, the adequacy of the BWIs to manage the world economy has come increasingly into question. We must be mindful that the decision-making structures of the BWIs also need to be reviewed and made more inclusive and democratic. One of the most persistent problems and dilemmas pervading the current financial and monetary system is that of painful adjustments.
Many countries continue to be weighted down by inordinate debt overhangs.
These imbalances should be fully addressed. He reiterated that the Fund's decision-making structures lack a democratic approach and this should be addressed through expanded participation. Wibisono also called on the IFIs to approach capital account liberalisation in an orderly and flexible manner so that member countries can tailor it to their respective circumstances. He also called for establishing surveillance and regulations on short term capital flows and trade in currencies. Calling for regional financial and monetary cooperation, Wibisono said many regional financial institutions are small but an investment in their development would pay off.