Globalization in Crisis

The End of a "Miracle:" Speculation, Foreign Capital Dependence and the Collapse of the Southeast Asian Economies

by Walden Bello

In the past several months, the Philippines and Southeast Asia have been gripped by an economic downturn that has yet to hit bottom. The Philippine peso, the Thai baht, the Malaysian ringgit and the Indonesian rupiah have collapsed, falling in value by as much as 80 percent in the case of the rupiah. Stock markets from Jakarta to Manila have hit record lows, dragging down via a curious "contagion effect" Hong Kong and even Wall Street, at least momentarily.

Governments throughout the region were paralyzed by the crisis. In Thailand, the ruling coalition has lost its last ounce of credibility as people look toward the curious combination of the King and the International Monetary Fund (IMF) for salvation in these frightening times. In the Philippines, the administration of President Fidel Ramos is reduced to telling people to count their blessings because the crisis is worse in Thailand, Malaysia and Indonesia. In Kuala Lumpur, Mahathir rails angrily against what he sees as a conspiracy to debauch Southeast Asia's currencies led by speculator George Soros, also hinting darkly at a Jewish plot against Islamic Malaysia. MORE >>

Autumn of the Patriarch: The Suharto Grip on Indonesia's Wealth

by George J. Aditjondro

For the Indonesian people, the bottom line of the country's financial crisis and new agreements with the International Monetary Fund (IMF) is simple: joblessness will shoot up, consumer prices will skyrocket and many of the economic gains of the past three decades will be wiped out.

For President Suharto, his family and his cronies, the story is more complex. While making some concessions to the belated effort of the IMF to crack down on rampant corruption and cronyism, Suharto clearly intends to maneuver to preserve the privileges claimed by his family and friends during more than 30 years of dictatorial rule. Perhaps even more crucially, the close-knit Indonesian elite has so firmly tightened their grasp over virtually all aspects of the Indonesian economy that it is difficult to foresee any scenario in which their economic empire is dismantled, even if the favoritism from which they have benefitted is eradicated. MORE >>

Reining in the IMF: The Case For Denying the IMF New Funding and Power

by Marijke Torfs

Coming on the heels of the Mexican bailout of 1995, the IMF's central role in the Asian financial drama represents a substantial expansion of the Fund's mandate and power. Originally conceived as an entity to provide temporary financing assistance to Western countries having trouble sticking to the fixed exchange rates of the post-World War II era (currencies then had a set value relative to the U.S. dollar, which was redeemable for a set amount of gold), the IMF redefined itself in the 1970s. It began providing short-term balance of payment assistance (aid when money is flowing out of a country at unsustainable rates compared to the incoming rate) to developing countries, in exchange for their imposition of strict "structural adjustment" -- budgetary and monetary programs of austerity, combined with economic deregulation. Now the Fund is carving for itself an additional role as guarantor of the private international financial system, a de facto insurer of loans and foreign investment to industrializing countries. The insurance comes free for lenders, but the traditional high payment of austerity measures is exacted from debtor countries having trouble repaying loans. MORE >>

The Clinton-Industry Cluster: EPA and Business Assure a Future of Dirty Paper Making

by Todd Paglia

Four years ago, the Clinton Administration considered promulgating an executive order which would have required the federal government to purchase totally chlorine-free (TCF) paper to satisfy a small portion of its paper needs. The proposal also required that, with certain exceptions, the federal government would purchase only recycled paper. The goal of the executive order was to encourage the use of recycled paper to reduce pressure on landfills, and to decrease domestic reliance on chlorine-based paper bleaching processes that produce dioxin, one of the most toxic human-made substances. The order also sought to use the federal government's purchasing power to encourage industry to invest in recycling and chlorine-free paper production technologies.

Enter the American Forest and Paper Association (AF&PA). AF&PA adamantly opposed the executive order. In a clever strategy intended to divide environmentalists, AF&PA lobbyists maneuvered the executive order policy debate into a choice between TCF or recycled paper procurement, but not both. TCF soon fell by the wayside. AF&PA had succeeded in eliminating federal procurement of this environmentally preferable paper. MORE >>

International Monetary Fund 101

An interview with the Friends of the Earth

While there has been widespread condemnation of the International Monetary Fund (IMF) and World Bank among sustainable development proponents for more than two decades, in the United States only Friends of the Earth has maintained a consistent focus on the IMF. Multinational Monitor turned to Friends of the Earth for assistance in describing the nuts-and-bolts of the IMF and reviewing the experience of the poor countries of the world with the Fund. MORE >>