People who want to change things must keep pushing for change: Manuel F. Montes in conversation with Adrian Pabst

Manuel Montes brings a wealth of academic knowledge and a long list of credentials at various international and intergovernmental organizations to bear on the current economic crisis in his discussion with Adrian Pabst. He argues that the Asian Crisis of 1997 was in many ways a “dress rehearsal” for the current one, and was barely confined to the developing world. In the case of both crises, he suggests, the problem was both a massive deferral on matters political and economic to the financial sector and the foisting of excessively large loans on creditors by rapacious financiers. The current model has led de facto to the public sector bearing the costs for private sector missteps and the risks of investment being socialized while, paradoxically, the financial sector remains central to economic recovery.

He concedes, however, that change will be difficult to enact and that we should avoid seeking easy answers in old economic models; he suggests provocatively that the talk of the so-called “Asian model” is overblown and we should not necessarily look to Asia, despite its successes, for lessons. Montes advocates more stringent regulation of the financial sector that would not so much curtail the total of its activities as decrease the emphasis on financial products while aligning finance with real economic productivity and addressing social concerns.