IMF wants Asia to Change its Economic Habits

The International Monetary Fund (IMF) is trying to coax Asia to alter its economic (saving, investment etc.) habits in a bid to put an end to the financial crisis.

The reuters article presents very interesting insights into the desperation of IMF to regulate policies and the economic environment in Asia. Here are some of the interesting pointers,

IMF Needs Asia or Asia Needs IMF

Asian economy has been one of the fastest growing economies in the recent times and is expected to maintain its growth trajectory. So, evidently IMF needs Asia more than Asia needs IMF. IMF also bears the brunt of causing economic troubles in Asia in the past on account of its policies.

Possible Problems With The Economic Climate in Asia

• Poor Investment Climate: Apparently, Asians save a little too much. Even the corporate savings are at high levels suggesting that the policy framework could be tweaked to ensure more investments in the region.

I am not sure about the corporate savings part but I guess hailing from India, I tend to agree to a certain extent that we have it in our DNA to SAVE than INVEST. Now, I am not generalizing anything but this is one thing I have noticed.

I am not sure what to make from the information in the article and whether the findings are true and justify the involvement of IMF in the policy making process in Asia.

What are your thoughts on this. Is ‘More Saving, Less Investment’ a problem in Asia and can IMF step-up to cause a positive change?

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