The evolving international financial architecture
This chapter discusses some of the core areas of debate, consensus and disagreements on the new International financial architecture. To critics, the International Monetary Fund (IMF) is a Bretton Woods relic incapable of playing a constructive role in the building of the new International financial architecture. While its harshest critics want the IMF altogether abolished, others are prepared to live with a severely restricted institution with limited powers and resources. Despite the fact that the IMF made mistakes in dealing with the Asian crisis, this should not invalidate the rationale for having a universally representative institution to oversee the implementation of collectively agreed rules. The Asian countries hardest hit by the crisis had all pursued dive. During the height of the Asian crisis, the Malaysian government dramatically challenged the prevailing wisdom and imposed capital controls by bringing the issue to the forefront of economic policy debates.