Something worked: the IMF, G20 and WTO The IMF is an organisation for international cooperation based on a system of mutual assistance among member countries. The IMF provides loans to countries experiencing balance of payments problems. The loans are financed by member countries. If the problems stem from economic policy mismanagement, the loan will be subject to specific requirements such as measures to correct policy. When the crisis occurred, the IMF reacted swiftly to accommodate the increased need for IMF services. The IMF’s role as lender and interlocutor with the authorities in crisis-hit countries probably helped to limit the crisis. The IMF provided support and assistance to countries that were directly affected by the crisis and countries that were innocent bystanders. The sharp increase in IMF lending reduced the financial resources of the organization. Member countries have now increased their contributions to the IMF. During the financial crisis, the G20 has played a prominent role in the international coordination of economic policy. The group launched several important initiatives during the crisis, which were subsequently placed under the responsibility of the IMF. All countries stand to benefit from the establishment of international meeting places that the major economies consider to be of interest. However, unlike the IMF, the G20 is not a representative body for all countries. Even if the G20 account for a large share of global output, most countries are not included, such as low-income countries and regions like most of Africa, the Middle East and the Nordic countries.

This non-internationalisation policy, supported by our strong macroeconomic fundamentals and substantial foreign reserves, has helped us to maintain a stable Singapore dollar, and to avoid large swings in our exchange rate which would have severely damaged our economy. The trade-off was less vibrant capital markets. Indeed in some cases, the tight domestic restrictions fostered the growth of offshore markets in these restricted activities, undermining our purpose. Recognizing this, we have over the past four years progressively relaxed the $ restrictions. Our approach has been a cautious one: weighing the trade-off between development and the risk to exchange rate management, and feeling our way forward step by step. Our efforts have yielded encouraging results. The outstanding volume of Singapore Government Securities (SGS) has doubled since 1998 and average daily turnover volume increased about threetimes. SGS outstanding volume in 2001 was $ billion and average daily turnover was $ billion. New corporate debt issuance has continued to grow strongly, with $ and $ corporate bond issuance totalling a record $ billion in 2001. This was an almost 8-fold growth over issuance volumes in 1998, spurred by exceptional merger and acquisition activities, but significant nevertheless. Outstanding corporate bonds have also more than doubled to $ billion. Besides higher volumes of issuance, we are also seeing a greater diversity of corporate bonds in the market. The tenors issued range evenly across a spectrum of maturity up to 15 years. The average size of $ issues has also increased.