Vienna, 26 March 1998/P/MS/15884c-is
The International Progress Organization is deeply concerned about the devastating impact of the present financial crisis upon the people of Southeast and Northeast Asia. Millions of women and men have lost their jobs. There is severe deprivation within the poorer segments of society as a result of the dramatic increase in the prices of basic necessities. In some parts of the region, there is even hunger and starvation.
While the causes of the crisis are varied, it is undeniable that it was triggered by the massive outflow of short-term, speculative capital from the region. It was this outflow which led to the rapid depreciation of a number of currencies and the decline of stocks and shares. The adverse consequences of this continue to be felt in almost every sector of the economy.
It is because short-term, speculative capital is so fickle, moving in and out of money markets in search of quick, huge profits, that it has wreaked havoc upon many Asian economies just as it had caused a lot of damage to various European and Latin American economies in the past. It is not widely known that speculative capital, which is massive in size and scale, dominates global financial transactions today. It wields much more influence than long-term capital investments in the real economy. This is why it is in a position to make and unmake economies.
Currency speculation should be curbed and controlled at the global level. There should be effective mechanisms for regulating currency trading itself, out of which has arisen currency speculation. Currency traders should be made accountable while currency trading should be made transparent.
Though calls for curbs upon currency speculation have become more frequent in recent months, international institutions, charged with ensuring global financial stability, and most international organizations, have been rather lukewarm in their response. The International Monetary Fund (IMF) for instance, has not gone beyond a promise to study the problem. The G-7 has not shown any inclination to address the issue. It is only organizations such as the G-77, the G-15 and ASEAN -- all linked to the South -- that are concerned about currency speculation and the volatility of the international financial system.
It is our earnest hope that the Asia-Europe (ASEM) Summit in London in April 1998 will show some empathy for the sufferings of the people of Northeast and Southeast Asia. Since countries in both continents have been victims of currency speculation, they should realize the importance of taking concrete measures to bring some order and stability to the money markets of the world.
WE THEREFORE URGE THE ASEM SUMMIT TO PUT FORWARD TANGIBLE PROPOSALS ON CURBING CURRENCY SPECULATION AND REGULATING CURRENCY TRADING.
END/APPEAL ASEM LONDON/26-03-98/P/MS/15884c-is