IMF's 'taxing' prescription for Asia's infrastructure needs

Tokyo

THE International Monetary Fund (IMF) earned itself a bad reputation at the time of the Asian financial crisis in 1997 by prescribing an economic medicine that was not only unpalatable but, as it turned out, also inappropriate. Now, the IMF is again prescribing a "nasty" medicine but this time Asia might be wise to take it.

The Washington-based institution is saying to Asian governments they should be prepared to raise taxes, however politically unpopular they might prove, as otherwise they will be unable to afford the huge investments they need in infrastructure and other public goods.