Blinkered View of World Economic Outlook Report of Bank for International Settlements S K V THE Rank for International Settlements in its 53rd Annual Report, published on June 13, has analysed the grave and fundamental problems faced by the world today from a narrow technical angle. Its predilection for viewing the world scene from the limited angle of financial stability and the soundness of the international banking system has seriously constrained its vision of the problems facing the world. The fragmented approach and the inability to recognise the real reasons-for the malaise of the world economy have reduced the Bank's recommendations to just routine suggestions, not in any way different from the views already put forward by scores of analysts and Financial journalists in the industrial world, The Bank, in its latest report, has identified two issues as the immediate major policy challenges facing the world today. These are: how to enable the emerging recovery in the Western industrial countries to proceed smoothly and how to keep the international debt situation within manageable bounds. Related to these current problems, according to the Bank, are the equally difficult long-term problems of how to manage policies in such a way that recovery will usher in a period of lasting, non-inflationary growth and, secondly, how to deal with the 'systemic', problems brought to the surface by the recent developments in the international financial markets. The Bank sounds a warning that the policies put into effect today" to accelerate business revival could mortgage the future by putting at risk the long-run objective of steady non-inflationary growth. Therefore, policy-makers have been advised to avoid a double pitfall.
