FacebookTwitterGoogle+RedditEmail

The Coming Asian Storm

by CONN HALLINAN

According to a lot of mainstream thinking Asia is weathering the current economic meltdown. “Asians are taking the economic collapse far more calmly than many in the west,” writes David Pilling, Asian editor for the Financial Times. The region he says, “brims with confidence that its time has come” and is operating under the assumption that “when the dust settles, wealth and power will have edged decisively east.”

Pilling may be right that about the rise of the east, but things are not nearly as rosy as he paints them, and there are restless clouds on the horizon.

“As goods pile up on wharves from Bangkok to Shanghai, and workers are laid off in record numbers, people in East Asia are beginning to realize they aren’t only experiencing an economic downturn but living through the end of an era,” says Walden Bello,  a senior analyst  at the Bangkok-based Focus on the Global South, president of the Freedom from Debt Coalition, and professor of sociology at the University of the Philippines.

The current crisis is due to the global crisis of capitalism, but most Asian economies are being particularly hard hit because they bought into a scheme by the World Bank back in the 1970s. The plan was to raise living standards without redistributing wealth—thus challenging  local elites—by turning countries like South Korea and Taiwan into exporting machines, where economic growth would lift the poor out of poverty.

At the same time, the U.S. was pressuring Japan to revalue its currency to make Tokyo’s products more costly in order to cut the trade gap between the two nations. Japan complied, but its domestic labor costs increased as a result. To keep its status as the world’s top exporter, Tokyo began pouring tens of billions into  the rest of Asia to take advantage of low wages in places like China and Vietnam. The strategy was to produce low cost goods, ship them to Japan, and then Europe and the U.S. “This was industrial policy and planning on a grand scale,” says Bello, “managed jointly by the Japanese government and the corporations.”

The export machine did indeed raise living standards all over Asia, but it ran on the endless appetite by U.S. and European consumers. As long as Americans could get easy credit—and they could as long as China and Japan bought up hundreds of billions of U.S. Treasury bonds—everything was hunky dory.

Until the housing bubble popped and the bottom fell out of the credit market. The fallout has been catastrophic:

“China’s growth in 2008 fell to 9 percent, from 11 percent a year earlier. Japan is now in deep recession…South Korea, the hardest hit of Asia’s economies so far, has seen its currency collapse  by some 30 percent relative to the dollar. Southeast Asia’s growth in 2009 will likely be half of that in 2008,” says Bello.

Although economic growth did alleviate some poverty, the gap between haves and have-nots actually expanded over the last decade. Between 200 and 2006 Asia grew at more than twice the rate of the rest of the world, but, as the Financial Times points out, that hardly meant the end of penury.

“Many of the people in the region were still suffering from serious poverty. More than one billion people, representing almost 62 percent of the region’s labor force, were still working in the ‘informal economy’. Some 900 million were living on less than $2 a day. The International Labor Organization found that 308 million of these people were living in extreme poverty: less than $1 per day.

According to Bello, some 20 million Chinese have lost their jobs in just the last few months, and there are no industries to soak up the growing army of the unemployed. The economic crisis has also forced millions of Indonesian and Filipino migrant workers to return home to markets that high unemployment drove them to flee.

Rising poverty rates and joblessness  is already leading to protests in Vietnam, and “Korea, with its tradition of militant labor and peasant protest, is a ticking time bomb,” says Bello.

The Financial Time’s Pilling writes that “Asians are stoical…nor have the people yet turned with a vengeance on incompetent politicians  or negligent regulators.”

You wouldn’t want to put a lot of money on that stoicism to endure.

CONN HALLINAN can be reached at: ringoanne@sbcglobal.net

 

Conn Hallinan can be read at dispatchesfromtheedgeblog.wordpress.com 

More articles by:

CounterPunch Magazine

minimag-edit

bernie-the-sandernistas-cover-344x550

zen economics

Weekend Edition
May 26, 2017
Friday - Sunday
Anthony DiMaggio
Swamp Politics, Trump Style: “Russiagate” Diverts From the Real White House Scandals
Paul Street
It’s Not Gonna Be Okay: the Nauseating Nothingness of Neoliberal Capitalist and Professional Class Politics
Jeffrey St. Clair
The ICEmen Cometh
Ron Jacobs
The Deep State is the State
Pete Dolack
Why Pence Might be Even Worse Than Trump
Patrick Cockburn
We Know What Inspired the Manchester Attack, We Just Won’t Admit It
Thomas Powell
The Dirty Secret of the Korean War
Mark Ashwill
The Fat Lady Finally Sings: Bob Kerrey Quietly Resigns from Fulbright University Vietnam Leadership Position
John Davis
Beyond Hope
Uri Avnery
The Visitation: Trump in Israel
Ralph Nader
The Left/Right Challenge to the Failed “War on Drugs”
Traci Yoder
Free Speech on Campus: a Critical Analysis
Dave Lindorff
Beware the Supporter Scorned: Upstate New York Trump Voters Hit Hard in President’s Proposed 2018 Budget
Daniel Read
“Sickening Cowardice”: Now More Than Ever, Britain’s Theresa May Must be Held to Account on the Plight of Yemen’s Children
Ana Portnoy
Before the Gates: Puerto Rico’s First Bankruptcy Trial
M. Reza Behnam
Rethinking Iran’s Terrorism Designation
Brian Cloughley
Ukraine and the NATO Military Alliance
Josh Hoxie
Pain as a Policy Choice
David Macaray
Stephen Hawking Needs to Keep His Mouth Shut
Ramzy Baroud
Fear as an Obstacle to Peace: Why Are Israelis So Afraid?
Kathleen Wallace
The Bilious Incongruity of Trump’s Toilet
Seth Sandronsky
Temping Now
Alan Barber – Dean Baker
Blue Collar Blues: Manufacturing Falls in Indiana, Ohio and Pennsylvania in April
Jill Richardson
Saving America’s Great Places
Richard Lawless
Are Credit Rating Agencies America’s Secret Fifth Column?
Louis Proyect
Venezuela Reconsidered
Murray Dobbin
The NDP’s Singh and Ashton: Flash Versus Vision
Ron Leighton
Endarkenment: Postmodernism, Identity Politics, and the Attack on Free Speech
Anthony Papa
Drug War Victim: Oklahoma’s Larry Yarbrough to be Freed after 23 Years in Prison
Rev. John Dear
A Call to Mobilize the Nation Over the Next 18 Months
Yves Engler
Why Anti-Zionism and Anti-Jewish Prejudice Have to Do With Each Other
Ish Mishra
Political Underworld and Adventure Journalism
Binoy Kampmark
Roger Moore in Bondage
Rob Seimetz
Measuring Manhoods
Edward Curtin
Sorry, You’re Not Invited
Vern Loomis
Winning the Lottery is a State of Mind
Charles R. Larson
Review: Mary V. Dearborn’s “Ernest Hemingway”
David Yearsley
The Ethos of Mayfest
May 25, 2017
Jennifer Matsui
The Rise of the Alt-Center
Michael Hudson
Another Housing Bubble?
Robert Fisk
Trump Meets the New Leader of the Secular World, Pope Francis
John Laforge
Draft Treaty Banning Nuclear Weapons Unveiled
Benjamin Dangl
Trump’s Budget Expands War on the Backs of America’s Poor
Alice Donovan
US-Led Air Strikes Killed Record Number of Civilians in Syria
Andrew Moss
The Meaning of Trump’s Wall
FacebookTwitterGoogle+RedditEmail