[asia-apec 529] Asian Crisis

[John Price]

Vancouver Sun

 Why just assurances for capital? unions ask rulers of Asia-Pacific : 

A year ago yesterday, currency speculators whelped an international
financial crisis. Recovery          policies have ignored working people, a
Canadian  academic observes.


Publication date:      Friday, July 3, 1998
EDITION    Final
SECTION    Editorial
PAGE       A19
LENGTH     915 words

ILLUS      Photo: Vancouver Sun, Files / Korean protesters last fall in
           Kwangmyung: These employees of financially troubled Kia Motors have
           been unable to halt the ``dismemberment of [an] otherwise
productive
           venture,'' Prof. Price reports. Millions of Asians have lost their
           jobs in the last year.

BY John Price


Author Note:      John Price teaches Asian history at the University of
           Victoria. He is a research associate with the B.C. office of the
           Canadian Centre for Policy Alternatives and recently returned
from a
           three-week Asia-Pacific visit.

   In Hong Kong, shoppers scatter before marching women whose
   placards demand severance pay from Triumph Manufacturing, a
   German-owned garment company that sacked 110 workers a day earlier.
   The voices of hundreds of workers and social activists echo among
   the towering skyscrapers of the city centre as they march to the
   offices of chief executive Tung Chee-hwa to demand job-creation
   fiscal measures and government support for the unemployed.

   In Korea, 2,000 workers occupy the paint shop and head office of
   Kia Motors to protest the imminent dismemberment of this otherwise
   productive venture. The day before, hundreds of women demonstrate in
   downtown Seoul to demand the government provide support for
   unemployed women.
   
   In Taipei, under a blazing sun, dozens of women protest their
   dismissal by the Taiwanese government outside central government
   offices.
   
   In Japan, union activists distribute leaflets in front of the
   ministry of transportation in Tokyo, denouncing the ministry's lack
   of supervision of airlines. Airlines in Japan, according to the
   protesters, lost more than $3 billion by speculating in currency
   markets and other ventures.
   
   Unions and social activists are organizing in every country on the
   other side of the Pacific to confront the consequences of the Asian
   financial crisis - now in its second year.
   
   A year ago yesterday currency speculators forced the Thai
   government to allow its currency, the baht, to float. A massive
   currency depreciation ensued in Thailand and then in Indonesia,
   Malaysia and other countries.
   
   What began as a run on currencies quickly escalated into a serious
   financial crisis, as foreign investors withdrew billions of dollar
   from affected countries. In November, South Korea defaulted on its
   loans and Japan's large securities firm, Yamaichi, went bankrupt,
   exposing deep fault lines within the banking system.
   
   The International Monetary Fund intervened, imposing harsh
   conditions including high interest rates, balanced budgets, and
   further financial liberalization in return for $100 billion in loan
   guarantees. The crisis, however, has deepened and spread. Singapore
   and China are on the verge of being swept into the maelstrom.
   
   While the IMF and the governments of the country's most affected
   have guaranteed that banks and international investors are
   protected, the have not extended the same guarantees to working
   people and their families, particularly women, who are often
   expected to provide sustenance in the absence of a social safety
   net.
   
   Millions have lost their jobs in a scant few months. But the
   unemployment statistics often conceal as much as they reveal.
   
   The real story is told by the 52-year-old mother in Seoul who, in
   the face of the won's depreciation, agonized about finding the money
   to send to sustain her son's education in Australia, to the point
   where she leapt from the 16th floor of her apartment building.
   
   The real story is told by the 250,000 Thai children who in the last
   year have been forced to quit school to find work to sustain their
   families.
   
   The real story is in the Seoul orphanage that found 20 children
   left on its doorstep in the past three months, abandoned by their
   parents who, for one reason or another, are unable to manage in the
   face of job loss.
   
   The real story is in the faces of the teenage runaways on the
   streets of Hong Kong, young people who have fled families where
   mothers and fathers are being forced to work longer hours than ever
   to maintain a basic family income.
   
   The human devastation is real and it is growing. But there is also
   hope as people organize to defend their rights and their livelihood.
   They face serious challenges.
   
   In the name of international competitiveness, governments and
   corporations in Asia, often multinationals, are demanding that
   workers accept layoffs, wage cuts and the ``casualization'' of work
   - when-needed employment. This is no coincidence. It reflects the
   economic orthodoxy that dominates international economic
   institutions. But this orthodoxy in increasingly being challenged.
   
   Young-mo Yoon, international secretary for the Korean Confederation
   of Trade Unions, said in an interview that his union is demanding a
   review and renegotiation of the IMF deal with South Korea.
   
   At a special APEC symposium on the crisis held in Taipei, Nigel
   Haworth, a University of Auckland business professor and APEC
   consultant, concluded that the social crisis imbued him with
   ``distinctly un-APEC like feelings.'' He suggested that perhaps it
   was time to abandon the orthodoxy of trade and investment
   liberalization and look at alternative models of economic
   development.
   
   APEC finance ministers, meeting in Canada in May, continued to
   endorse the ``approach of the IMF, the World Bank, and the Asia
   Development Bank in addressing the financial instability in Asia.''
   
   Canada continues to pursue similar policies as a member of the G-8,
   the International Monetary Fund, the World Bank and the Asian
   Development Bank. In so doing, Canada has directly contributed to
   the crisis in Asia.
   
   There are concrete alternatives that Canada can and should be
   promoting to promote sustainable human development in Asia and
   throughout the world. These include:
   
   - A tax on currency speculation as a first step towards a fixed but
   flexible currency exchanges system.
   
   - Deposit insurance on short-term capital investment, which help
   deter volatility in capital markets.
   
   - Abandonment of international advocacy of privatization and
   deregulation and promote the benefits of nationalized institutions
   such as medicare and public education.
   
   - Reinstatement of the overseas development budget from its
   unconscionable level.
   
   Learning from the depression of the 1930s and the world war that
   followed, John Maynard Keynes and others recognized that world
   capitalism required strict regulation. The Asian crisis is
   reinforcing that lesson

                           *** END OF DOCUMENT ***
John Price
University of Victoria 
Currently in Vancouver (April-August)
Tel. 604 437-5866  Fax 604 437-7014