advanced western economies, especially the united states. we now know that governance deficiencies were not confined to asia, and that some countries that were pointing the finger had governance deficiencies closer to home to worry about. the infatuation with the “ new economy ” also resulted in a bubble, the bursting of which has been exerting a dampening influence on world economic growth for the past three years. we also know that during the period when many asian countries were suffering from the crisis, one important asian country - china - was powering ahead. now the dust of the asian crisis has largely settled, it is worth sitting back and taking a fresh look at asia ’ s place in the world economy, and particularly its place in australia ’ s economic future. i propose to start this task by looking at the world economy and asking the question - which regions are increasing their share of output, and which regions are finding that their share is falling? i will use a long - running international monetary fund ( imf ) data base for the comparisons, the results of which are shown in tables 1 and 2. table 1 asian output ( excluding japan ) per cent change in share share of world output 1982 - 2002 1997 - 2002 china india korea indonesia taiwan thailand philippines malaysia hong kong vietnam singapore 3. 76 3. 00 0. 81 1. 17 0. 53 0. 58 0. 82 0. 26 0. 29 0. 20 0. 13 10. 27 4. 28 1. 67 1. 87 0. 99 1. 08 0. 69 0. 47 0. 42 0. 34 0. 24 12. 67 4. 77 1. 77 1. 58 1. 01 0. 95 0. 68 0. 45 0. 40 0. 37 0. 24 – 17 – 16 – 12 – 1 – 5 – 5 total 11. 56 22. 32 24. 88 115. 3 11. 5 total ( ex china ) 7. 79 12. 05 12. 22 56. 7 1. 4 ppp basis. source : imf, world economic outlook database. no - one should be surprised to find that over the past 20 years asia ’ s share of world output has risen noticeably, or that the share of the developed oecd countries has fallen. note that i include japan in the latter group because it is a developed high - income country and as such has been a member of the oecd since the 1960s. while much of the rise in the share of asia

mr. greenspan gives a testimony on the global financial system and the role of the imf in the asian crisis testimony of the chairman of the board of governors of the us federal reserve, mr. alan greenspan, before the committee on agriculture of the us house of representatives on 21 / 5 / 98. the global financial system has been evolving rapidly in recent years. new technology has radically reduced the costs of borrowing and lending across traditional national borders, facilitating the development of new instruments and drawing in new players. information is transmitted instantaneously around the world, and huge shifts in the supply and demand for funds naturally follow, resulting in a massive increase in capital flows. this burgeoning global system has been demonstrated to be a highly efficient structure that has significantly facilitated cross - border trade in goods and services and, accordingly, has made a substantial contribution to standards of living worldwide. its efficiency exposes and punishes underlying economic imprudence swiftly and decisively. regrettably, it also appears to have facilitated the transmission of financial disturbances far more effectively than ever before. three years ago, the mexican crisis was the first episode associated with our new high - tech international financial system. the current asian crisis is the second. we do not as yet fully understand the new system ’ s dynamics. we are learning fast, and need to update and modify our institutions and practices to reduce the risks inherent in the new regime. meanwhile, we have had to confront the current crisis with the institutions and techniques we have. many argued that the asian crisis should be allowed to run its course without support from the international monetary fund or the bilateral financial backing of other nations. they asserted that allowing this crisis to play out, while doubtless having additional negative effects on growth in asia, and engendering greater spill - overs onto the rest of the world, would not likely have a large or lasting impact on the united states and the world economy. they may well have been correct in their judgment, and some would argue that events over the past six months have proved them right ; we have so far avoided the type of continuing downward spiral that some feared. there was and is, however, a small but not negligible probability that the upset in east asia could have unexpectedly large negative effects on japan, latin america, and eastern and central europe that, in turn, could have repercussions elsewhere, including the united states. thus, while the probability of such an outcome may be small, its consequences, in