The policy backlash is ‘the most serious challenge yet to the free-market orthodoxy that the globe has embraced since the end of the Cold War’ The Wall Street Journal, 4 September 1998.
‘There is an ideological battle going on over capital controls, and it is huge’ World Bank senior advisor on capital markets and Asian specialist, 1 September 1998.
‘The relative stability of China and India, countries whose restrictions on international financial flows have insulated them to some extent from the current maelstrom, has led some to conclude that the relatively free flow of capital is detrimental to economic growth and standards of living. Such conclusions, in my judgement, are decidedly mistaken’ Federal Reserve Chairman Alan Greenspan, to us House of Representatives, 16 September 1998.
‘It would be a catastrophe if countries were to develop the idea that somehow withdrawing from the global system was right and that building the foundation for a market economy was wrong.’ us Deputy Treasury Secretary Lawrence Summers, 9 September 1998.
Former Federal Reserve Chairman Paul Volker said the imf’s stance was over-influenced by the us Treasury, and left many small economies dangerously exposed to turbulent capital flows. ‘The visual image of a vast sea of liquid capital strikes me as apt. The big and inevitable storms through which a great liner like the u.s.s. United States of America can safely sail will surely swamp even the sturdiest South Pacific canoe.’