Reforms on right path: IMF chief

By Our Special Correspondent

NEW DELHI, JUNE 6. The Managing Director of the International Monetary Fund (IMF), Mr Horst Kohler, admitted during his discussions with Indian authorities here today that the process of globalisation had so far benefited only developed countries. Therefore, his focus during the next six months would be on evolving a mechanism which ensured that the developing countries also benefited.

Mr Kohler held separate discussions with the Finance Minister, Mr Yashwant Sinha, the Deputy Chairman of the Planning Commission, Mr K. C. Pant, and the External Affairs Minister, Mr Jaswant Singh. He wanted to know how the IMF could help India since the country was in no need of any assistance from the Fund.

The response from the Indian side was that the IMF could show case the country as a model of the Fund programme since it had successfully managed the balance of payments crisis of 1991 and had also weathered the currency crises which had hit a number of Southeast Asian countries and some in Latin America in the second half of the decade. Thus the IMF could play a ``certification'' role for India, after making independent assessment of the performance of the economy, so that Indian corporates accessed funds from the global commercial markets. Mr Kohler was informed that Indian industry was undergoing largescale restructuring and was in need of commercial financing from abroad. The IMF could play a role in changing the perception of India in the international arena.

Mr Kohler said the Indian economy had thrown off its shackles after the 1991 crisis and assumed the high-growth path. Now, the second generation reforms could provide a similar boost to the economy. The IMF chief also pointed out that one of the problems of globalisation and liberalisation was that any country which did not keep pace with the globalisation process could fall further behind. Consequently, there was need to speed up the reforms process, he said and also wanted a greater role for the private sector in economic development.

Mr Kohler was given an overview of the Indian economy by the Finance Minister and the Deputy Chairman of the Planning Commission during their separate meetings. It was brought to the notice of the IMF chief that the second round of economic reforms would basically be undertaken at the level of States but a political consensus was already in place which would facilitate the launch. Later, talking to presspersons, Mr Kohler appreciated the pace of economic development in India and said the IMF specially lauded the financial and social stability maintained in the country even in the midst of the international financial crises. He said the country was moving in the ``right direction''. He sought India's support, as an important member country, in helping evolve a vision of developing the IMF as a centre-piece of the international financial system.

India's Executive Director to the IMF, Dr Vijay Kelkar, accompanied Mr Kohler during his meetings.

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