AS CAPITALIST ASIA CONVULSES
Is crisis regional or general
By Fred Goldstein
After a week of intense pressuring and
threatening in Seoul, south Korea, and Jakarta, Indonesia, high
officials of the Clinton administration and the International
Monetary Fund are returning to Washington, agreements in
hand.
But the crisis remains. Indeed, it shows signs of spreading.
And mass resistance is on the rise.
Deputy Treasury Secretary Lawrence Summers, Defense
Secretary William Cohen and IMF President Michel Camdessus were
all in Indonesia to force President Suharto to break up his
family-owned businesses so they could be swallowed up by the
multinationals or removed as competitors. But having attained
this in writing, they still can't explain how hundreds of
Indonesian corporations and the Indonesian government are going
to repay $133 billion-some estimates run as high as $200
billion-in loans from imperialist banks.
Indonesian crisis worsens
Consequently, as Camdessus was flying out of Jakarta with a
signed agreement containing Suharto's pledge, the rupiah was
dropping to new lows of over 8,000 to the dollar. The police
were called out in cities throughout Java to suppress people
rioting for food.
The Jan. 17 Wall Street Journal described the Tangerang
factory belt:
"For years this industrialized zone has been an engine for
Indonesia's 7 percent annual economic growth and employed
hundreds of thousands of migrant laborers. Korean, Taiwanese,
Japanese and American companies sought out the area's cheap
labor to spin out textiles, shoes, zippers and scores of other
low-end products.
"But in Tangerang now, tens of thousands have been laid off.
Those who haven't grumble that their salaries can't keep up
with living expenses. Mr. Agus, who like many Indonesians goes
by just one name, says that the cost of 50 kilograms of rice
has jumped 36 percent since the currency crisis hit Indonesia
in August. Electricity prices have tripled; milk is up 50
percent; and cooking oil 40 percent."
One worker told the Journal: "Things were bad in 1974 and
1975, but this is the worst I can remember. It's like we're
heading back to the Dutch times when we had to learn to live on
just one meal a day."
Said another: "Rioting is sometimes the only means to make
sure there aren't price increases. Sometimes it's the only way
to be noticed."
South Korean resistance begins
Shortly after Camdessus left Seoul, having met with labor
union leaders and gotten an agreement to discuss the question
of mass layoffs through a tripartite government commission, the
Korean Confederation of Trade Unions organized demonstrations
in six cities against the IMF and layoffs.
Agence France Presse reported Jan. 17: "Thousands of trade
unionists, waving red banners and shouting slogans against an
International Monetary Fund demand for mass labor layoffs in
South Korea, marched through central Seoul Saturday, witnesses
said.
"Police stood by as the more than 2,500 demonstrators, most
of them members of the militant Korean Confederation of Trade
Unions (KCTU), headed down the central Chongno street towards
Myongdong Cathedral. 'No layoffs. Fight layoff system,' shouted
the unionists as students joined them in the march in drizzling
rain."
The KCTU, an umbrella union that claims half a million
members, brought the country to a standstill last winter over
an unpopular labor law that would have allowed layoffs.
Simultaneous marches and rallies were staged in several
other main cities around the country, including Ulsan, Pohang,
Taegu, Taejon, Pusan and the tourist island of Cheju, Yonhap
News Agency said.
Rumblings in India
On Jan. 18 the Indian Central Bank raised interest rates
from 9 percent to 11 percent after the rupee broke the
40-to-the-dollar mark. The bank has been protecting the
currency, even though there are restrictions on trading.
According to the Jan. 19 Wall Street Journal, the Indian
economy "reported 5 percent industrial growth in the seven
months ended Oct. 31, about half the growth rate in the same
period a year earlier. Growth slowed despite sliding interest
rates and ready availability of funds. 'It is obvious that the
turbulence in the Southeast Asian markets is spilling over into
the Indian market,' Finance Minister P. Chidambaram said in a
statement."
This decline in the currency is a clear indication that the
crisis of overproduction in the region hit India as early as
last year, in the same way it hit Thailand, Malaysia, Indonesia
and south Korea. It heralds a widening of the crisis and could
mean layoffs and suffering among Indian workers.
Solidarity is crucial
Whether or not the crisis widens, it is important for
advanced workers in the United States to focus on the plight of
workers in Asia, who are already on the verge of a
depression.
It is essential to bring the message of solidarity and
support in this crisis. The IMF is just a front for giant banks
and multinational corporations that are demanding their pound
of flesh from the workers of Asia. These are the same corporate
powers that carried out downsizing, union busting, and
wage-lowering campaigns against workers in the United
States.
They are also the forces behind NAFTA and "fast track" trade
legislation. Their aim is to drive down wages internationally,
making the globe one great sweatshop for the profiteers.
But in addition to carrying out their internationalist duty
to the workers in Asia, advanced workers in the United States
must pay careful attention to this crisis from the viewpoint of
preparing to meet it should it cross the Pacific to U.S.
shores. This is already happening, on the West Coast in
particular.
What comes next?
The ruling class is now deeply anxious about the nature of
the crisis. On the one hand they are desperately looking around
for signs that it will remain regional.
The financiers and economic experts are trying their best to
find analogies with the Latin American debt crisis of the 1980s
and the Mexican bailout of 1994. After all, they were able to
limit those crises through financial manipulation, bailouts
and, above all, austerity programs that shifted the crisis onto
the Latin American masses.
They are hoping to get away with the same in Asia. Never
mind that half a billion people will suffer economic
devastation. Wall Street will get its super-profits and the
multinationals will be able to continue their operations
unhindered.
They are especially fond of pointing to the Latin American
debt crisis. It involved a bigger bailout-over $200
billion-than in Asia so far. They also like to cite statistics
that minimize the effects of losing trade with the countries
now in crisis. Above all, they point to the great size and
strength of the U.S. capitalist economy, which keeps them
impregnable.
But for every hopeful forecast, you can find another that
shows how Japan is the biggest lender to the Asian neocolonies
and how south Korea is heavily at risk in Indonesia. If
Indonesian companies cannot pay south Korean banks, then the
south Korean banks cannot pay the Japanese banks-which are
already in a crisis and need government bailouts.
If Japanese capitalism takes a further downturn, that could
drag down the entire capitalist economy worldwide.
This and similar doomsday scenarios abound side-by-side with
the more optimistic views about a limited crisis. Which proves
that not one bourgeois economist, academician or financial
official-including Alan Greenspan and Robert Rubin-has any
genuine overview on the ultimate course of this crisis.
When the crisis broke out in Thailand, they thought they had
settled it with a $16 billion IMF bailout. They failed to
anticipate the Indonesian crisis.
When they thought they had that under control, the south
Korean crisis flared up. Then it shifted back to Indonesia.
The best they can do is describe what is going on under
their noses. Some catch on earlier than others. But the anarchy
of their system prevents them from anticipating events once the
contradictions of capitalism begin rapidly unraveling.
So far, this crisis is out of control. Their only "strategy"
is to hold on to their profits, come what may, by shifting the
burden onto the masses and hoping for the best.
The advanced workers and communists in the United States,
however, must have a very sober and clear-headed approach to
the situation. Armed with Marxist theory and historical
experience, they must try to understand the character of the
crisis-in order, if necessary, to meet it head on.
Is crisis regional or general?
One scenario is that the crisis is regional, not a general
capitalist crisis, and will be contained.
But another scenario is that the great capitalist expansion,
led by the United States and fueled for seven years by the
collapse of the USSR, is coming up against the stone wall of
capitalist overproduction worldwide.
The capitalist press admits there is overproduction in
certain products: automobiles, microchips, electronics, steel,
chemicals, paper. The prices of oil and other commodities are
down.
The discussion in bourgeois financial circles has shifted to
concerns of deflation-a drop in prices. This signals a
sharpening of price competition among the monopolies and
capitalists, which leads to a drop in profits. And this in turn
could herald a sharp economic contraction, layoffs and
unemployment.
Marxism is not a crystal ball. But it would be the height of
folly for the workers not to consider the very real possibility
that the post-Soviet capitalist boom is running its course.
The monopolies, in fighting each other for profits, have
acted in accordance with the laws of capitalist development as
discovered by Karl Marx: They have expanded production and
services into every corner of the globe, creating a glut in the
markets so that, increasingly, commodities cannot be sold at a
profit.
That is clearly what has happened in Asia.
The question for the world working class becomes: Has a
steady, quantitative, worldwide increase in capitalist
overproduction reached a crucial point, a qualitative shift,
first expressed in Asia with the sudden eruption of this
financial crisis?
If this is the case, the labor unions and the leaders of the
working class and the oppressed in general must know that the
suffering and devastation being pushed on to the workers and
the middle classes of Asia are the same thing the bankers and
bosses have in store here.
In Asia, the only thing that can stop them is for workers,
students, and all the progressive forces to unite and resist
the IMF/capitalist offensive. The same thing will surely be
true here.
This article is copyright under a Creative
Commons License.
Workers World, 55 W. 17 St., NY, NY 10011
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