IIAS | IIAS Newsletter Online | No. 17 | General

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Assessing the Asian Crisis

The economic crisis in East and Southeast Asia has dominated the news for months. Currencies, stock markets and businesses have collapsed. Central banks are hard pressed to come up with foreign exchange needed to cover international debts. Millions of jobs have disappeared and workers have been displaced. Governments face crises of legitimacy. As a result the viability of the 'Asian model' of economic, political, and social development has been called into question. Candid discussions between eighty participants at the University of Manchester's international conference on 'Assessing the Asian Crisis' provided an opportunity to get beyond the headlines and to elaborate critical understandings of the national, regional, and global causes and implications of the crisis.

by G.A. Richards


The framework for debate was established in two keynote papers. Paul Cammack (University of Manchester) located the significance of the Asian crisis within the broader structures underlying world order and global capitalism. The leading global regulatory agencies tend to promote the further subsumption of labour to capital, and this is likely to sharpen class struggles in the region. Walden Bello (University of the Philippines) stated that what is happening is more than the collapse of several Asian economies; it is the unravelling of a model of development that brought a certain kind of success but also carried within it the seeds of its own downfall. The region may enter a prolonged depression, but there are also ways in which the crisis opens up a space to pursue alternative paths of development.

Ngai-Ling Sum considered the global-regional-national interactions in and between the production and financial (dis)orders. The tendencies towards financial liberalization in the 1990s led to the NICs becoming increasingly dependent on cheap finance capital and speculatively vulnerable to its 'casino' nature. Shaun Breslin examined the extent to which China's trade and inward investment have been affected by the crisis. What appears at first sight to be a minor shock wave from the rest of the region has exacerbated domestic economic, social and political problems.

Three contrasting perspectives were presented on the significance of the crisis for the remaking of international relations. Heiner Hänggi emphasized the ways in which the geographical unevenness of globalization, the new wave of regionalism as well as the rise of East Asia have been the major factors behind the 'new Triad' based on the three major economic regions. He speculated on the extent to which the Asian crisis might undermine processes of regionalization and East and Southeast Asia's relations with other regions of the global political economy. Franco Algieri identified a lack of consistency at the heart of the European Union's Asia policy, which derives from the 'coherence dilemma' in the EU's external relations. Reflecting on the EU's inadequate response to the crisis, it is unlikely that this dilemma will be solved in the near future so that the Asia strategy of the EU can be no more than a limited framework. Gareth Api Richards and Dorothy Guerrero assessed the striking upsurge of oppositional political activity and politics 'from below' in East and Southeast Asia. National struggles are slowly taking shape against the crisis and the IMF-led strategic response.

Society
Michael Freeman discussed how the idea of universal human rights can be articulated with important Asian cultural traditions, what problems this generates, and how these problems might be addressed in the interest both of genuine development for Asian peoples and of a mutually beneficial dialogue about human rights between Asians and Europeans. According to Evelyn Balais-Serrano a crisis of democracy and human rights in Asia long preceded the onset of the current economic crisis. Nonetheless, the costs of the crisis have been borne by vulnerable social groups and unleashed new restrictions of the democratic space. Patricia Ranald outlined the impact of the crisis on employment, living standards, and working conditions, and initial responses from independent labour organizations in South Korea and the Philippines. Union movements have been among the most powerful voices analysing the crisis and organizing popular responses. The potential for union survival and development of local and regional alliances exists and these will form a strategic resistance to the extension of the IMF's 'conditional' debt regime. A number of cross-cutting themes stand out from the discussions that concluded the proceedings. i) The uneven impact of the crisis across the region demands a reassessment of the idea of a region-wide model of political-economic development. ii) The crisis was more the immediate result of government initiated financial and industrial deregulation and its origins can be located in the disjunctures in Asian structures of production and finance. iii) The IMF structural adjustment policies will do nothing to advance Asian economic development since their terms are designed to ensure that the targeted countries open themselves more fully to international business and give priority to earning the foreign exchange necessary to pay international debts. iv) The social distribution of costs of recovery and adjustment are falling particularly on vulnerable social groups. This is likely to lead to severe social dislocation and impoverishment. v) The crisis has had knock-on effects for human rights and democratization and the discourse around 'Asian values'. vi) There are the beginnings of critical responses to the crisis 'from below'; at the national level labour movements and civil society oppose to IMF-led conditionalities. vii) The crisis has long-term implications for processes of regionalization, triadization, and governance of the global political economy including Asia's relations with Europe.
The conference analyses suggest that the economic, political, and societal causes and implications of the Asian crisis are more complex than has been suggested in most mainstream accounts. The discussions laid bare the ways in which explanations of the crisis need to be located within broader understandings of crises in global capitalism to shed light on who is driving processes of change and for what purpose. This demands that our own thinking should encourage, support, and learn from the debates and struggles currently taking place in Asia.

   IIAS | IIAS Newsletter Online | No. 17 | General