Currency collapse in Indonesia has outstripped the economic remedies proposed by the International Monetary Fund. This could very likely become the case for Thailand and South Korea as well. A new initiative is needed, which means new thinking.

The economic crisis in Asia is a crisis of the American model for a globalised economy. Asia's implosion has resulted from the conflict between that American model and an Asian growth model that originated in Japan and was imitated elsewhere.

The IMF's proposed remedies are also American in inspiration. They were developed by the IMF in close co-operation with the Clinton administration Treasury and reflect mainstream US economic views.

Those measures, at least in their initial application, have failed to halt the fall of Asian markets, banks and currencies. They are, additionally, criticised in principle not only in Asia but by influential American economists, such as Mr Jeffrey Sachs of Harvard and Mr Joseph Stiglitz, chief economist of the World Bank, as actually making the situation worse by imposing further deflation on economies already suffering from deflation.

However, no international actor with the power to influence the situation is offering an alternative. Japan, for bureaucratic as well as political reasons, is unable to act independently.

If Europe had the central economic directorate it promises to bestow upon itself when it acquires a single currency next year, it might be capable of a constructive initiative. But the Europeans renounced an independent role in world economic affairs 50 years ago and have never claimed it back.

The World Economic Forum, which convenes in Davos in three weeks, will bring together in Switzerland representatives of nearly all the most influential public and private actors in the world economy today.

This meeting might be made the occasion for a new examination of the nature and sources of the Asian crisis, and for the start of an open-minded reappraisal of economic and institutional measures to slow it or reverse it.

If the Hong Kong stock market fails - it dropped 13 per cent during the first four days of last week, and is down by more than a third since the high that followed Hong Kong's takeover by China - pressure on the dollar-linked but China-supported Hong Kong dollar could force devaluation of China's own currency. That would explosively enlarge the crisis, which then almost certainly could no longer be confined to Asia.

The Asian growth model originated in Japan and produced rapid industrialisation and export-led growth through a state-influenced system of close co-operation between bankers and industrialists. It could sustain higher debt levels than Western systems because industry, banks and government were collaborating in what was viewed as a national enterprise.

The United States has for years attempted to destroy this Asian model because of its protectionist and statist features. Mr. Hale writes of what now has happened to Korea: "The shattering of this economic model as a result of foreign banks suddenly withdrawing their funding ... is going to produce a legacy of distrust and resentment which will have long-term political implications."

This is why American-inspired remedies to the problems of Asia no longer possess the credibility they possessed before Thailand's finances collapsed. That provided the first falling domino in a sequence which has yet to be interrupted.