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
December 02, 2016
Friday - Sunday
John Pilger
The Coming War on China
Jeffrey St. Clair
Roaming Charges: The CIA’s Plots to Kill Castro
Paul Street
The Iron Heel at Home: Force Matters
Pam Martens - Russ Martens
Timberg’s Tale: Washington Post Reporter Spreads Blacklist of Independent Journalist Sites
Andrew Levine
Must We Now Rethink the Hillary Question? Absolutely, Not
Joshua Frank
CounterPunch as Russian Propagandists: the Washington Post’s Shallow Smear
David Rosen
The Return of HUAC?
Rob Urie
Race and Class in Trump’s America
Patrick Cockburn
Why Everything You’ve Read About Syria and Iraq Could be Wrong
Caroline Hurley
Anatomy of a Nationalist
Michael Hudson – Steve Keen
Rebel Economists on the Historical Path to a Global Recovery
Ayesha Khan
A Muslim Woman’s Reflections on Trump’s Misogyny
Russell Mokhiber
Sanders Single Payer and Death by Democrat
Roger Harris
The Triumph of Trump and the Specter of Fascism
Steve Horn
Donald Trump’s Swamp: Meet Ten Potential Energy and Climate Cabinet Picks and the Pickers
Louis Proyect
Deepening Contradictions: Identity Politics and Steelworkers
Ralph Nader
Trump and His Betraying Makeover
Stephen Kimber
The Media’s Abysmal Coverage of Castro’s Death
Dan Bacher
WSPA: The West’s Most Powerful Corporate Lobbying Group
Nile Bowie
Will Trump backpedal on the Trans-Pacific Partnership?
Ron Ridenour
Fidel’s Death Brings Forth Great and Sad Memories
Missy Comley Beattie
By Invitation Only
Fred Gardner
Sword of Damocles: Pot Partisans Fear Trump’s DOJ
Renee Parsons
Obama and Propornot
Dean Baker
Cash and Carrier: Trump and Pence Put on a Show
Jack Rasmus
Taming Trump: From Faux Left to Faux Right Populism
Ron Jacobs
Selling Racism—A Lesson From Pretoria
Julian Vigo
The Hijos of Buenos Aires:  When Identity is Political
Subcomandante Insurgente Galeano
By Way of Prologue: On How We Arrived at the Watchtower and What We Saw from There
Dave Lindorff
Is Trump’s Idea To Fix the ‘Rigged System’ by Appointing Crooks Who’ve Played It?
Aidan O'Brien
Fidel and Spain: A Tale of Right and Wrong
Carol Dansereau
Stop Groveling! How to Thwart Trump and Save the World
Kim Nicolini
Moonlight, The Movie
Evan Jones
Behind GE’s Takeover of Alstom Energy
James A Haught
White Evangelicals are Fading, Powerful, Baffling
Barbara Moroncini
Protests and Their Others
Joseph Natoli
The Winds at Their Backs
Cesar Chelala
Poverty is Not Only an Ignored Word
David Swanson
75 Years of Pearl Harbor Lies
Alex Jensen
The Great Deceleration
Nyla Ali Khan
When Faith is the Legacy of One’s Upbringing
Gilbert Mercier
Trump Win: Paradigm Shift or Status Quo?
Stephen Martin
From ‘Too Big to Fail’ to ‘Too Big to Lie’: the End Game of Corporatist Globalization.
Charles R. Larson
Review: Emma Jane Kirby’s “The Optician of Lampedusa”
David Yearsley
Haydn Seek With Hsu
FacebookTwitterGoogle+RedditEmail