Neither the borrowers nor the lenders are the villains of the debt crisis, according to this analysis. The basic trouble lies in the international financial system, which is "50 years behind national financial systems." How to close the gap is the burden of this rich and stimulating book, which includes a long list of quite concrete proposals ranging from more stable exchange rates to the creation of new private banking bodies. Only if there is world economic growth can debt issues be dealt with and creditworthiness restored. For growth, greatly expanded development financing is needed, much of it to be provided through the World Bank and the regional development banks, while the IMF, he argues, should concentrate on balance-of-payments financing and the relations among industrial countries. Some people will think that Mr. Friedman asks for too much, others that he makes it sound too easy. He should, however, be read; not least because he has been close to many of the matters he talks about in his years at the U.S. Treasury, the IMF, the World Bank and several commercial banks.
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