Resist...
The current economic crisis experienced by Asian countries should be a concern for all levels of people in Malaysia. Now only after the harsh wake-up call that we are reminded to taking austerity measures and prudent spending, in government and private sectors, and in consumer spending. Yesterday's rapid economic growth was stiffled in a matter of weeks. The year 1998 will see if all Malaysians can make it through the hard time ahead. For one, the economic crisis should be a radical turning point toward slowering economic growth while focusing more on our social and environmental needs. We should be grateful that we are able to fend off as big a social and economic havoc as that of Thailand or South Korea; so far not yet a big-time crisis. And all Malaysians from every level should make it known that, for the sake of all and well-being of the people, we will not let IMF and its gang of neoimperialists from developed nations to take over our economies and strip us of sovereignity. God will help us.
(LaborNet)
Originally posted in IGC member conference: hrnet.development
Date: January 2, 1998
Posted by: [email protected]
/* Written 12:10 PM Jan 2, 1998 by [email protected] in hrnet.development */
/* ---------- "IMF/E. Asia/SAPs" ---------- */
Edited/Distributed by HURINet - The Human Rights Information Network
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## author : [email protected]
## date : 02.01.98
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This is an op-ed piece I wrote in mid-December on the IMF
bailouts in Eas Asia and the media's ignorance of the IMF's
track record in the rest of the world. The Washington Post
has now been considering it for two weeks, and may use a
revised version of it in their Jan. 11 (Sunday) "Outlook"
section. The revisions would reflect recent developments in
the Clinton Administration's accelerated drive for IMF
funding; it now looks like they're going to try to attach a
request for $18 billion to the bill extending the stay of
U.S. troops in Bosnia.
I've gotten a few requests to post this, and finally after
the Post's latest delay have decided to do so. If it is
revised and published, I'll post the new version.
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IMF Bailouts: Familiar, Failed Medicine for Asian "Tigers"
by Soren Ambrose
The recent spate of currency crises in East Asia -- and
the consequent enormous "bailouts" of Thailand,
Indonesia, and most recently South Korea -- has
catapulted the normally obscure but immensely powerful
International Monetary Fund (IMF) into the headlines.
A front-page article in the New York Times (December
8), deceptively headlined "IMF's New Look: A Far Deeper
Role in Lands of Crisis," was perhaps the most
prominent example of the media's belated discovery of
an institution with a well-documented history of taking
over economies.
There is nothing new about what the IMF is doing in
Asia. The policies being imposed on, say, South Korea,
are remarkably similar to those imposed on most of the
countries of Latin America, Africa, and South Asia. And
the disastrous consequences of IMF policy are old news
for the people of over 90 countries (containing over
80% of the world's population) which have been forced
over the last 15 years to sign onto IMF structural
adjustment programs (SAPs) or similar austerity
packages. They know what the people of East Asia are
just learning -- that the IMF's loans and its
all-important certification of creditworthiness for
international aid and investment are tied to cuts in
spending on health and education, currency devaluation,
rising interest rates, opening up to foreign ownership
of domestic businesses, and the open-ended perpetuation
of poverty.
The latest study to confirm the failures of these
policies was issued on December 8 by a joint task force
of the International Labor Organization and the United
Nations Development Program; it charges that structural
adjustment in Africa has been "purchased at the price
of economic contraction, high unemployment and massive
poverty."
Of course the object of the East Asian bailouts is not
to relieve the burden on the poor, but rather to
re-gain the "confi- dence" of foreign investors. To
rescue corrupt executives and risk-taking investors,
the IMF insists that the risks and burdens be shifted
squarely to the people of South Korea, Indonesia, and
Thailand -- people who cannot escape by selling their
shares, moving their investments, or declaring
bankruptcy. The people will always be there to shoulder
the debt, just as the IMF will, if it has its way,
always be there to police that debt and enforce its
dictates on debtor countries.
The humiliation being expressed by Korean officials and
media -- called by major papers the "virtual loss of
economic sovereignty" -- has been felt all around the
world. If the humiliation was temporary, if the
enforced austerity of SAPs truly did lead to economic
recovery and higher standards of living for the
majority of the people in borrowing countries, it might
be bearable. But experience shows the devastation of
structural adjustment is not temporary. An IMF review
of 19 countries with SAPs found that the types of
indicators it watches suffered: current accounts
deficits rose from 12.3% of GDP to 16.8% of GDP under
structural adjustment, and the ratio of the countries'
debts to their exports also rose, from 451% to 482%.
But it is the indicators that reflect the hardships of
daily life that are most shocking: in Mexico, whose
1982 debt crisis and "rescue package" from the IMF
marked the beginning of the age of structural
adjustment around the world, real incomes fell between
1982 and 1992 while infant deaths due to malnutrition
tripled, the minimum wage (adjusted for inflation)
declined by 60%, and the percentage of the population
living in poverty increased from 48.5% to 66%. Under
the IMF bailout following the 1994 peso crisis, brought
on by a decade of IMF-designed policies, probably one
million people have been laid off.
Structural adjustment programs are devised to ensure
that borrowing countries will continue to pay the
interest on crushing, unpayable debts to First World
countries and international institutions (including the
IMF itself), but the principle continues to rise.
Mexico launched the debt crisis in 1982 with a debt of
$82 billion; by 1994, the debt had reached $140 billion
(an amount which the bailout increased by $48 billion).
The poorest region of the world, sub-Saharan Africa,
paid over $100 billion on its debt during the 1980s, but
still saw its debt burden triple, to about $300 billion.
The rising principle not only means that SAPs are not
solving the debt problems, but that countries suffering
under them will remain in thrall to the international
financial institutions indefinitely.
Confronted with 15 years of structural adjustment
programs that have failed to bring prosperity, IMF
chief Michel Camdessus now speaks, eerily enough, of a
"second generation of reforms." Such talk is not
reassuring, coming as it does from a man who recently
acknowledged to a group of U.S. church leaders that
realizing the benefits of the IMF's macroeconomic model
may require the "sacrifice of a generation."
People living under the IMF's heel have had to confront
these harsh realities in their struggle to survive. To
avoid seeing their children's generation sacrificed,
they are organizing to oppose the IMF's
sado-monetarism. Labor unions, women's groups, and
other civil society organizations are educating people
about structural adjustment and calling on their
governments to reverse the harsh austerity measures and
encourage meaningful investment in the domestic
production that constitutes the real, rather than the
speculative, economy.
The time has come to examine the economic model that
the U.S. and the other G-7 countries are imposing on
the rest of the world through the IMF and the World
Bank. While small middle classes may be fostered
temporarily here and there, and islands of wealth built
up for transnational investors in capital cities and
export processing zones around the world, the great
majority of the world's people are being excluded. The
time has also come to re-examine how an undemocratic,
secretive, and unaccountable institution like the IMF
can come to wield such enormous power despite such a
remarkable track record of failures.
Congress will have just such an opportunity in the
spring of 1998, when the Treasury Department requests
an appropriation of over $35 billion in new taxpayer
money to further increase the power of the IMF. This
week, the IMF requested an additional boost in its
quota, which could add $7 billion to the U.S. share. A
useful precedent was set by its rejection last month of
$3.5 billion for the IMF's bailout fund. Sensing
Congress's uneasiness with the IMF, Treasury Secretary
Rubin this week rebuffed Camdessus's request for an
additional boost in its quota, which could have added
$7 billion to the U.S. share. Congress has the power
to deny more funds to the IMF, or condition them on
greater consideration for labor rights and poverty
alleviation. It is not yet too late to use our
democratic processes to prevent the structural
adjustment, and systematic impoverishment, of the rest
of the world. For, just as democratic governments long
ago recognized that war was too important to be left to
the generals, the economies of the world are far too
important to be left to the economists at the IMF.
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Author Attribution:
Soren Ambrose chairs the Steering Committee of 50 Years is
Enough: U.S. Network for Global Economic Justice, a
coalition of over 200 organizations fighting for the
fundamental transformation of the IMF and the World Bank.
