Stanley Fischer and the IMF Changed Asia for Good

During Stanley Fischer’s rein at the IMF, aid to Indonesia and South Korea came with strings attached.

Photographer: Andrew Harrer/Bloomberg

As he steps down as vice chair of the Federal Reserve, Stanley Fischer has been saluted for his overall contribution to central banking. His complex legacy after transforming key Asian economies should not be forgotten. 

As first deputy managing director of the International Monetary Fund in the late 1990s, he played an important role in the emergency loans to Thailand, Indonesia and South Korea when their currencies collapsed. All three are American allies, and the last two are pivotal strategically. 

That the nations required rescue amid the Asian economic crash is beyond question. The conditions attached to the loans, at least initially, were controversial. Especially in Indonesia, the prescriptions were perceived as onerous and doctrinaire: limit government spending, end subsidies, raise interest rates, close banks. While the IMF did eventually revisit some of these, the short-term damage was done.