*{Geneva Business Dialogue Conference Report 

23 - 24 September 1998 

Economic turmoil offers opportunities for emerging markets http://www.iccwbo.org/home/conferences/reports/geneva_business_dialogue/economic_turmoil.asp]}

During the session on "Emerging pitfalls for emerging economies" business analysts offered a variety of views on the causes of the financial meltdown in East Asia, Russia and other emerging markets but agreed that major changes in both policies and institutions were required to return to the path of economic prosperity as soon as possible.
Hashim Djojohadikusumo, Chairman and Chief Executive Officer, Tirtamas Group, Indonesia and Special envoy of the President of Indonesia to Europe, said that given the weakness of existing financial institutions in his country, the only way to stop the haemorrhage was to bring in some form of foreign exchange controls, at least for a temporary period. This was necessary but regrettable because Indonesia has had a "free and unfettered" foreign exchange regime for more than 31 years. 
"We went too fast," he said, referring to his country’s deregulation of the banking system since 1990 and market-oriented economic reforms which have been in place for three decades.
Shafik Gabr, Chairman and Managing Director of the Egyptian ARTOC Group for Investment and Development, emphasized the need for gradual progress towards economic and financial liberalization. Describing the success of reforms in his country since 1990, he said Egypt’s economy was now quite well-balanced and would continue to follow its own specific path, rather than general prescriptions. 
Fan Gang, Director of the Chinese National Economic Research Institute, noted that the chief problem for emerging markets confronted with globalization was to achieve an equal footing with developed countries regarding the institutions needed for economic growth. One of the key elements was to reduce speculative flows of portfolio investments.
"There might be over-shooting in the process of opening up the economy which creates incompatibility between domestic institutions and external institutions. Opening up too fast could cause problems," he said.
Jean-François Rischard, Vice-President for Europe, The World Bank, said the financial meltdown had demonstrated the need for a thorough reappraisal of the global system of economic governance. 
"There are two big forces that are causing tectonic shifts in our planet," he said. They were the demographic explosion and the emergence of a new world economy, marked by cheap telecommunications and a revolution in the way in which the economy operates.
Those changes are taking place at a very fast pace while human institutions change much more slowly, causing tensions that will require new methods and redesigned institutions to handle. One of the new methods will be networking and cooperation among all participants in the economy and civil society, including governments, international institutions, the private sector and non-governmental groups, he said. 

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