Forwarded from Mine #1

[Louis Proyect <lnp3@xxxxxxxxxxxxx>]

Lou, can you please forward this to the list?

bye,

Mine

********
I WROTE:

>> Really? Where is the evidence for the miracle of Asian capitalism,
> Dennis?

DENNIS RESPONDED:

>Fifty years of the highest per capita growth rates on the planet, and net
>creditor status vis-a-vis the USA.

I CITED:

"DOMESTIC MOTIVATIONS WERE ENHANCED BY INCREASINGLY STRONG PRESSURES FROM
US ADMINISTRATIONS FROM REAGEN THROUGH CLINTON TO LIBERALIZE CONDITIONS FOR
INVESTMENT BY US-OWNED BANKS, SECURITY HOUSES AND INSURANCE FIRMS"

MY ANSWER WAS THIS:

South East Asian countries were always vulnerable to fluctuations in
capital markets, largely because their economies had developed "dependent"
commercial ties outside the region, especially to the United States, Wall
Steet financial community as well as to European banks. Their overall
economic performance was in every respect raped. In 1983, five core power
central banks (US, Germany, Japan, Britain, Switzerland) had $426 billion
foreign reserves in Asian markets versus a "daily turnover of $1.8 trillion
in trading activity". Now the region's economy is far more integrated into
the world capitalist system that had been the case in the 60s and 70s. US
forced these to liberalize their economies through a serious of monetary
arrangements (Plaza 1985, Louvre 1987), such as currency appreciations
(Yen), financial market deregulation and  overseas investments. "Not only
trade, but also finance, linked the regions members to the outside.
Following the slowdown in global commodity prices and electronics in
1985-86, for example, many South East Asian countries took various measures
of financial reform and liberalization, increasingly opening their capital
markets  to the rest of the world.

DOMESTIC MOTIVATIONS WERE ENHANCED BY INCREASINGLY STRONG PRESSURES FROM US
ADMINISTRATIONS FROM REAGEN THROUGH CLINTON TO LIBERALIZE CONDITIONS FOR
INVESTMENT BY US-OWNED BANKS, SECURITY HOUSES AND INSURANCE FIRMS. Similar
pressures encouraged South Korea to undertake similar measures in
preparation for its entry into the OECD.... This new openness allowed
European (and Japanese) banks to become heavy lenders to Asia, with 25 to
45 percent of the loans for many Asian countries coming from European
banks. In addition, considerable portfolio money flowed into the region,
particularly bu not exclusively from the US." *(T. J. Pempel "Regional Ups,
Regional Downs" in Pempel eds, _The Politics of Asian Crisis_, Cornell
Press, p.70).

Here is some data on the external debt of selected Asian countries
(1992-1997 US$ billion)

World Bank 1997, Global Development Finance (Jefferey Winters "The
determinants of financial crisis in Asia" in _The Politics of Asian Crisis_)

                                        US $billion

                        1992    1993    1994    1995    1996    1997

Indonesia

Total ext debt          88.0    89.2    107.8   124,4   129.0   120.7
Short term debt 18.1    18.0    19.5    26.0    32.3    80.0
Private         16.3    14.0    24.4    33.1    36.7    50.8

nonguaranteed   debt
South   Korea

TED                     *       43.9    56.8    78.4    104.7   157.0
STD                     *       19.2    30.4    45.3    61.0    92.2
PND                     *       *       *       *       *       *

Malaysia

TED                     20.0    26.1    29.3    34.3    39.8    42.9
STD                     3.6     7.0     6.2     7.3     11.1    14.6
PND                     4.0     5.7     9.5     11.0    13.0    25.9


Philippines
TED                     33.0    35.4    40.0    39.4    41.2    42.6
STD                     5.3     5.0     5.7     5.3     7.2     9.3
PND                     1.0     2.2     2.9     5.5     4.9     6.8

Thailand

TED                     41.8    52.7    65.6    83.2    90.8    95.9
STD                     14.7    22.6    29.2    41.1    37.6    36.5
PND                     13.8    15.3    20.2    25.1    36.2    66.8

Mine


Louis Proyect
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