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Indonesia also earned IMF kudos. 'The governors congratulated
the Indonesian government for their country's economic
performance in recent years, in particular for the significant
reduction in poverty and improvements in a wide range of social
indicators ..." (IMF 1997 Annual Report). Further on, IMF governors
praise Indonesia for prioritising 'the free circulation of capital',
although just before they highlighted some of the dangers this
entailed. 'Massive capital inflow has raised a number of challenges for
the government', the report says. The analysis continues with praise
for the Indonesian authorities, indicating that they would handle the
new challenges with comparative ease. 'One of the ingredients of
Indonesia's success has been the flexibility with which the authorities
have adapted economic measures to changes in the situation. This
will be an essential asset for tackling new challenges' (IMF 1997
Annual Report).
As for Malaysia, the report contains the following passage:The governors congratulated Malaysian officials for their
country's ongoing remarkable economic performance, charac
terised by robust export-oriented growth, low inflation and
noteworthy social progress in the reduction of poverty and
improvement of income distribution. Sound macro-economic
policies and broad structural reforms have boosted these results.
(IMF 1997 Annual Report)Soon after, once the crisis began, these very same Thai, Indonesian
and Malaysian officials became the targets of criticism from the IMF
and neo-liberal ideologues. Malaysian Prime Minister Mahathir was
a particular source of irritation to the IMF for a number of reasons.
From late July 1997 onwards he denounced the criminal role of big
speculating financial institutions; he criticised the IMF and refused its
assistance; he visited Fidel Castro in September 1997; and his
country hosted the G15 Summit in the autumn of 1997, bringing
together the main countries of the Third World in a (sadly) failed
attempt to put pressure on the governments of the industrialised
countries.
As previously stated, one of the main causes for the crisis in the
'dragon' countries was a high growth rate based on a massive inflow
of foreign capital and on a level of imports that consistently exceeded
the value of exports. This led to an increasing current account deficit,