The crisis-like developments in East Asia, Russia and Latin America may have their characteristic features in individual cases. However, they also give rise to a number of comments of a more general nature. Imbalances in economic development, weak financial systems and insufficient supervision of financial markets are merely symptoms of deeper-lying causes. In any case, most recent experiences tend to confirm the opinion that a sustained economic development is only possible on the basis of social coherence. Individual countries themselves bear the responsibility for creating this stability. In the long run, outside help can only be meaningful if it is granted as help towards self-help. These remarks are equally relevant for assessing the activity of the International Monetary Fund. The chief task of this important institution in the area of international monetary policy is advising its 3  BIS Review 106/1999  members in the conduct of economic policy. This is designed to create favourable preconditions for a positive development of international monetary relations and, of course, also the world economy. The second task is to provide credit facilities in order to support the necessary processes of adjustment. Since its inception, the International Monetary Fund has thus held an intermediate position between emphasising the self-responsibility of a country and granting adjustment aid. Its task is not made any easier by the fact that it has no possibility of enforcing recommendations. Whenever difficulties arise in shaping international monetary relations, a call is made for introducing fundamental reforms.

In the economic area, we must create the human and material conditions to promote appropriate growth, while keeping unemployment and inflation low. With regard to the human factor, the necessary qualification must be coupled with an adequate motivation. This motivation can be enhanced by an appropriate macroeconomic environment. A gradual development of economic and social activities seems appropriate, since this is the only way to ensure the necessary identification of individuals with the community. 1  BIS Review 106/1999  Economic situation In the course of this year, prospects for economic recovery in Switzerland have been improving, bringing to an end an unusually long period of stagnation. The human and material costs of this stagnation are of course regrettable. The causes for this period of stagnation are manifold. First, one has to bear in mind that it followed years of marked expansion. Other, more general reasons are the consequences of our past labour market policy, which helped to maintain existing structures, as well as of insufficient competition in the domestic economy. Last but not least, an already high level of achievement made it increasingly difficult to provide the necessary punch for change. The need for structural changes as well as the necessity to tackle remaining problems from the past – notably in the construction sector, in agriculture and tourism – along with the repercussions of a weak global economy, have led to a temporary decline in growth. A sustained process of adjustment, but also favourable monetary conditions have subsequently contributed to improve prospects.