Summers Says Crisis Will Force Reforms

Asia’s economic crisis will force an end to South Korea’s chaebol economic system, bring needed reforms to other Asian countries and spur changes at the International Monetary Fund, Deputy U.S. Treasury Secretary Lawrence Summers said. Offering the most explicit administration criticism of the IMF to date, Summers said the global lender of last resort itself needs reform. The IMF “needs to be better governed. It needs to be more transparent in its operations and accountable for its decisions” if it is to retain the confidence of investors, Summers said. Treasury Secretary Robert E. Rubin, however, warned Congress against mandating reforms as a condition for approving the administration’s request for $18 billion in IMF pledges. President Clinton is asking for $3.5 billion for a reserve line of credit to the IMF pledged by leading nations and another $14.5 billion to replenish IMF accounts. In November, Congress refused to approve the $3.5 billion, because of an unrelated abortion issue. Clinton has said that winning congressional approval for the $18 billion is among his top priorities this year.