NYT article on Asian economic crisis

Charles Brown CharlesB at CNCL.ci.detroit.mi.us
Mon Jul 13 07:06:58 PDT 1998

>>> "Charles Brown" <CharlesB at CNCL.ci.detroit.mi.us> 07/12 7:29 PM >>>

The following article ( in parts here) appeared in the NYT on July 10, 1998.

"Will Asia Turn Against the West ?"

by Fareed Zaharia

The fire raging in East Asia today jeopardizes one of the central achievements of postwar American foreign policy - the stabilization and growth of East Asia. Even more dangerously,if it continues to fester, this crisis could undermine support for an open global economy and economic and political liberalization across the world.

The facts are bleak. In the last two years Indonesia's economy has shrunk by almost 80%, Thailand's by 50 %, South Korea's by 45 %, Malaysia's by 25%. Even islands of prosperity like Hong Kong and Singapore are in deepening recessions. Currencies and stock markets have plunged to unimaginable lows; unemployment and poverty are climbing to new highs.

Chas: Gee, capitalism don't work too good. It seems like it uses you , then loses you.

article continued : To take the worst example, Indonesia's per capita gross domestic product has dropped from $3,500 to less than $ 750, wiping out 25 years of economic progress. Some 100 million people - almost half of that vast country - have sunk below the poverty level, and fears of a famine are growing. President B.J. Habibe has called on his citizens to fast twice a week to lessen the need to import food. Japan, the only nation that could spur a new round of growth i the region, has now slipped firmly into its second recession in five years.

Chas: The business cycle and crisis seems to be still part of capitalism.

The Clinton Administration and the International Monetary Fund had an initial strategy to deal with what began as a financial crisis in Thailand in June 1997. First, they assumed it would be temporary, "a few small glitches along the road" in President Clinton's words. Second, they assumed it would be localized. Third, they assumed that the IMF would restore stability.

All three assumptions have been proved wrong. The IMf's prescriptions have not worked; currencies and stock markets continue to fall. The panic is now a depression and has spread beyond East Asia. Markets as large as Russia and Australia and as distant as Mexico and South Africa have been battered.

If official responses have been inadequate, the reactions of American foreign policy pundits to the crisis have been worse. Much of this commentary has been to note gleefully that Asia's troubles confirm the virtues of the American system and the bankruptcy of "Asian values".

In the late 1940's, as Europe struggled to cope with similar economic hardships, George Marshall warned Americans that "the patient is sinking as the doctors deliberate." Today it is as if the doctors are vivisecting the patient to score points about anatomy.

The prosperity and stability of East Asia are -were ? - extraordinary achievements. Thirty years ago, most of these countries seemed stuck in the dismal poverty that afflicted the third world, and the region was the was the most troubled part of the globe.

Chas.: Evidently it wasn't "stabiity" that Asian Tiger capitalism had. The "properity" was in the hands of a very few. Can this be generalized to all capitalism ?

In Indonesia, more than 300,000 people had died in mob riots after a failed Communist-backed military coup in 1965... _____

Chas.: This is some of that questionable blaming of communists for a large number of deaths, of the type for which I have criticized list member DeLong . And in Indonesia there was mass murder of communists by capitalist democrats.

to be continued

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