Attaction of foreign inflows in east asia

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• Attaction of foreign inflows in east asia

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Next, there are the bargains to be had once the target country’s currency has collapsed and its firms are strapped for cash. Year of effort, for example, by the Korean elite to keep businesses firmly under control of state-supported conglomerates called chaebols were undone in a matter of months. By early 1998, as the IMF negotiated the terms of surrender, Citigroup, Goldman Sachs and other firms were snatching up ownership of Asian banks and industries. With currencies down 15-60 per cent and stock prices down 40-60 per cent, Asia is today a bargain- hunter’s paradise. Nor are assets the only bargains to be had. As a direct result of the destruction wrought by global financial interests, the prices of basic commodities have plummeted over the past year. Oil. Copper, steel, lumber, paper pulp, pork, coffee, rice can now be bought up by Western firms dirt cheap, an important key to the continued profitability of US industry.

Then there is the higher tribune that countries, once in debt peonage to Western creditors, must pay on both old and new loans. South Korea, for example, under the terms of the IMF bailout, will pay interest on foreign loans that is 25-30 per cent higher that rates on comparable international loans- this despite the fact that the loans have been guaranteed by the Korean Government. Since the crisis began, international lenders have doubled or tripled the interest rates they charge on emerging- market debt. What is such usurious interest cripples the economy and drives the country into default? Well ,then they will become wards of the IMF, lender of last resort.

Next, there are the people themselves, engulfed in debt, impoverished and committed by their governments to can endless course of domestic austerity and debt crisis of the 1980s, the Asian crisis has resulted in millions of newly unemployed, whose desperation will pull wages down world-wide. Like the debt crisis of the 1980s, the Asian crisis will turn entire countries into export platforms, where human labor is transformed into the foreign exchange needed to repay Asia’s $600 billion debt. In just this past year, Thai rice exports rose by 75 per cent, while Korea has managed to boost its exports and accumulate $41 billion in reserves for debt service. These figures, notes the World Bank, indicate that people in Asia “are working harder and eating less”.

Finally there are the governments themselves, the ultimate prizes to be won. It is no accident that conditions imposed by the IMF, with their emphasis on altering state employment, welfare and pension systems, their insistence on reforming the legal and political systems of the target countries, entail a major loss of national sovereignty. Through IMF negotiations, national governments are transformed into local enforcement agents of transnational corporations and banks. IMF officials are quick to point out that the usurped governments often were not paragons of democracy and virtue. This of course is true. But the motives of the IMF are themselves profoundly undemocratic, intended to seize sovereignty and fix the rules of the game and to protect and expand, at all cost the wealth of the international financial elite.

Реферат опубликован: 11/02/2008