Date: Sat, 20 Dec 97 12:25:45 CST|
From: "Workers World" <email@example.com>
Organization: WW Publishers
Subject: U.S. Banks & Asia: Crisis on Workers' Backs
Via Workers World News Service
Reprinted from the December 25, 1997
issue of Workers World newspaper
U.S., IMF deepen crisis for Asian workers
By Fred Goldstein, in Workers World
25 December 1997
The ruling class is declaring that the worst of the
financial crisis in Asia is easing. But the crisis is
actually deepening for millions of workers who are faced
with layoffs, and for the middle classes threatened by
Meanwhile, world finance capital--headed by U.S. bankers
and financiers--is pursuing policies that can only widen and
aggravate the crisis, in both the short run and the long
The Dec. 22 edition of Business Week reported: "An
unemployment crisis is gathering force in Asia, and layoffs
are soaring to levels not seen for more than a decade.
Asia's currency crisis, which touched off bankruptcies,
halted spending, and slowed growth when it began in July, is
likely to result in nearly 2 million Asian workers losing
their jobs by next year.
"Not just the Korean financial sector, but Thai assembly
plants, retail stores in Hong Kong, and construction sites
in Indonesia are firing workers by the thousands. Migrant
workers who fueled Asia's boom are likely to be sent home.
Even Japanese are seeing the long-sacred lifetime employment
"In Indonesia, 420,000 construction, textile, and
electronics workers have lost their jobs so far, according
to labor union leader Tohap Simanungkalit, and the number
could reach 1 million by next year. In Korea, the government
predicts that chaebols [conglomerates] and banks will have
to lay off 350,000 Korean workers--without a social safety
net--in the next few months.
"In Hong Kong the giant Yaohan department store closed in
late November, throwing more than 2,700 workers into the
street. Real estate agents have been closing shop as
property sales dive and prices have fallen more than 20
percent since October.
"'Unemployment is issue No. 1 in Hong Kong,' says Lee
Cheuk Yan of the Hong Kong Federation of Trade Unions."
Seth Mydans, writing in the Dec. 15 New York Times from
Athum Thani, Thailand, told of hundreds of needle workers
coming to work at the PAR Garment Factory six weeks ago to
find a sign reading "the company is closed."
Mydans reported, "The 449 people at the factory here who
lost their jobs are among some 4 million rural migrants who
flooded into the capital during the last decade."
The workers are as poor as ever. They lived on the $3.50-
a-day minimum wage and now they are in "the first wave of
layoffs in an economic catastrophe that could cost 2 million
jobs by the end of next year," according to Pasuk
Phongpaichit, an economist at Chulalongkorn University.
Mydans wrote the next day from Kuala Lumpur, Malaysa,
about the austerity measures the regime there is taking.
"Government spending is to be cut by 18 percent," announced
Deputy Prime Minister Anwar Ibrahim. Building projects will
"Anwar acknowledged that these steps meant unemployment--
as many as 200,000 jobs," Mydans reported.
The crisis is the result of years of imperialist banks
foisting high interest loans on local corporations and
banks. At the same time, multinational corporations were
flooding the area with investment.
The imperialist banks brutally and abruptly turned off the
faucet when overproduction of everything from microchips to
chemicals, steel and autos caused sales to decline in the
region. The local corporations and banks were unable to pay
off their loans to foreign banks.
Then the International Monetary Fund stepped in to promote
the U.S. program. First, it demanded that no aid be given to
ailing companies and that they be forced into bankruptcy and
layoffs. Then it demanded cuts in government spending so
that the funds could be used to buy dollars to pay back U.S.
banks, causing more layoffs.
Third, the IMF demanded that governments raise interest
rates and slow their economies--thus reducing the
competition to the multinational corporations in their
struggle for markets, and leading to further unemployment.
And finally, they demanded economic concessions: expanded
rights to buy up local corporations and expanded access to
Thus, the United States and to a lesser extent Japan made
sure to push the crisis on to the backs of the oppressed
countries in Asia and to extract concessions at the same
time. Of course, unemployment is the inevitable result of
capitalist overproduction, but the U.S./IMF axis has
aggravated the current situation in Asia with a vengeance.
WORLD FINANCIERS STRONG-ARM OPPRESSED COUNTRIES
By a remarkable conjuncture of events, the final round of
the negotiations on the so-called General Agreement on Trade
in Services relating to financial operations was scheduled
to be completed on Dec. 12, in the midst of the crisis.
"Under the darkening clouds of Asia's financial crisis,"
wrote the New York Times on Dec. 13, "the United States and
more than 100 other countries signed a global trade
agreement early Saturday morning to open up the world's
"The agreement ... commits countries to dismantling
hundreds of barriers and admitting foreign banks, insurance
companies and investment firms to their markets."
The Times reported: "U.S. companies were a conspicuous
presence in and around the negotiations here in Geneva.
Citibank, Goldman Sachs, Merrill Lynch and numerous
insurance companies--particularly the American International
Group and Aetna--established command posts at the President
Wilson Hotel, about a half-mile from the headquarters of the
World Trade Organization," which is to administer the
In fact the signing was delayed for two hours while the
United States pushed for final concessions.
"The accord," reported the Dec. 13 Washington Post,
"struck after frenzied negotiations ... will open up
banking, insurance and securities markets of a number of
fast-growing developing countries to U.S. firms that have
been clamoring for entry."
While the agreement's details have yet to be made known,
its essence is easily understood.
Each oppressed country puts forward a list of concessions
it is willing to make to the imperialists' financial
corporations. Of course, the U.S. graciously allows
companies in the oppressed countries to buy up banks in the
United States--as if any of them could afford to buy Chase
Once the developing countries put forward their list of
concessions, the list has the force of law and is enforced
by the World Trade Organization. The governments of those
countries no longer have anything to say about the matter.
If the oppressed country gives up control over foreign
banks and allows them to take over domestic corporations,
then no matter how important any specific domestic
corporation may be to a local economy, it can be taken over
by a U.S. bank without the government having any say in the
If the government protests, it can be hauled before the
World Trade Organization and penalized.
This agreement is the third Multilateral Agreement on
Investment that has been signed recently. Two others were
signed this year: one on telecommunications and the other on
information technology. All three of these areas are where
the United States is the strongest power in the world.
MAI, CAPITAL AND FUTURE CRISIS
There is great irony here.
This agreement on further opening up the oppressed
countries to parasitic finance capital was signed in the
midst of a financial crisis. It expands the already wide
latitude U.S. and Japanese financiers have to push the Asian
economy into a position of overinvestment and
Each financial giant--J.P. Morgan, Chase Manhattan, Bank
America, Mitsubishi, etc.--has privately pursued its own
profit lust in Asia. They raked in high interest rates while
they could, skimming off the surplus value created by the
And in the process they drove the region into crisis at an
Now these same predators want even greater latitude--not
just to loan, but to own or control every financial asset on
the globe. They are pushing governments aside and making
themselves and their high court, the WTO, the legally
sovereign lords over the oppressed world.
But their blind profit madness is what brought about the
current crisis. How much greater damage will they do with
unlimited control--after they have completely pushed aside
all protective regulatory powers of states in the
In the post Soviet period, corporations in the United
States and Britain have waged a war of deregulation at home
against every barrier to capital. They have used their
newfound deregulated freedom to attack the workers, degrade
the environment, undermine the health of their own
populations; impair the safety of air travel and commit many
other offenses against the masses.
What will they do in the oppressed countries when they
have full sway?
Karl Marx showed that capitalists are only the
personification of capital. Capital must seek the highest
rate of profit, the greatest exploitation. Those who own and
administer it must do so in a ruthless fashion and attempt
to destroy everything that hinders the pursuit of profit and
Owners who either hesitate or show ineptitude in this
pursuit will be pushed aside and other capitalists will
wrest their capital from them.
If left to themselves, the bosses--the owners of capital--
will rapidly accelerate the ruination of society and cause
such suffering that they will hasten their own revolutionary
destruction by the workers and oppressed. Pushed to the
point of rebellion by unrestrained capitalist exploitation,
the workers and oppressed will rise up.
One of the principal functions of the capitalist state,
after its primary function as a repressive force, is to
regulate the bosses so as to retard this tendency. The state
introduces an element of conscious control, of restraint, to
keep the bosses from going so hog wild that they provoke
The MAI agreements tend to remove all vestiges of
conscious control by society over capital, and thereby
accelerate the tendency toward anarchy and crisis.
The current attacks on the Asian workers and the attempts
to use this crisis to increase their suffering and
exploitation will only lead to greater resistance in the
long run--and to the ultimate imposition of conscious
control over society's economic assets and their use in the
interests of human need: socialism.
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