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Consumer groups call for right prescriptions to fight problems. Programmes cause hardship to people

By Tanida Sirorattanakul, in the Bangkok Post,
Tuesday 10 March 1998

Consumer organisations in the Asia-Pacific region severely affected by the current economic turmoil have called on their governments and international financial institutions, particularly the International Monetary Fund and the World Bank, to review their prescriptions which the organisations claimed have caused great hardship to consumers in the region.

About 100 consumer protection advocates and representatives of consumer organisations and non-government organisations working on human rights, women's rights and environmental issues, recently met in a two-day conference on "The Economic Crisis in Asia: The Causes, the Impact and Confronting the Challenges". The conference was held in Penang, Malaysia, by the Consumer International Regional Office for Asia and Pacific (CI ROAP).

The IMF's prescriptions for Thailand, Indonesia and South Korea were heavily criticised and questioned at the meeting.

Martin Khor Kok Peng from the Consumer Association of Penang (CAP) blamed the IMF's policy to rush Asian countries into financial liberalisation though they were not ready and its proposal for an interest rate increase to solve their financial problems as major causes of the region's current economic crisis.

"Since the IMF's precription has severely affected our well-being, we, as a consumer, have all the rights to press for its reform, " said the CAP secretary and research director.

He added consumer organisations had to think what should be done by the IMF and launch campaigns to bring it about.

Song Vo Kyung, president of the Citizen's Alliance for Consumer Protection of Korea (CACPK), fully agreed with him.

"For Korean people, the IMF is like an evil. When we heard about Thailand's crisis situation, we never knew it would happen to (South) Korea. It's the right time for consumers to press our government to do the right thing," he said.

The conference ended with 13 conclusions and recommendations to be proposed as a global policy campaign by the Consumer International and as guideline for consumer organisations in troubled economies to press their governments for changes.

One of its conclusions was that domestic weaknesses including over-investment in the property sector and stock markets and wrong government policies were partly to blame for the Asian crisis, but a large part of the problem was due to untimely and misplaced financial liberisation, especially government permission for local banks and companies to borrow from abroad without adequate regulations.

The meeting recommended that governments review their financial liberisation policies and make changes where necessary, and that banking, financial and corporate laws be strengthened and strictly enforced to safeguard consumer interests and ensure a stable financial system.

It called on the international community to respect the right of developing countries to determine their own financial management policies free of external pressure. It also demanded that the international community introduce effective measures to curb currency speculation.

The conference said the IMF's bailout conditions were causing great hardship to consumers, labourers and and the public in general. High interest rates and removal of subsidies on food and other essential goods and services had brought about great social dislocation, it said adding that unless the IMF changed its policies and became more transparent, there would be more public pressure for its closure.

It also asked developed countries not to pressure Asian countries affected by the crisis to disallow or discourage "buy local" campaigns.

The conference said it rejected any attempt to further liberalise international investment flows without commensurate regulations and obligations on cooperation, and therefore was against the Multilateral Agreement on Investment under discussion in the Organisation for Economic Cooperation and Development (OECD) as well as attempts to start negotiations on an investment agreement at the World Trade Organisation.

After the conference, a working group on economic crisis which includes 17 Consumer Internationl experts was organised to develop a policy campaign in line with the conference's recommendations.