U.S., IMF force Asia to ax millions

By Fred Goldstein, Workers World
22 January 1998

It's a full-court press.

The world's biggest bankers, represented by the Clinton administration and the International Monetary Fund, are putting enormous pressure on the governments of Indonesia and south Korea. These finance capitalists are demanding agreements to keep themselves solvent during the present crisis. The losers will be the masses of people.

Clinton sent Deputy Treasury Secretary Lawrence Summers to tell Indonesian President Suharto to sign on to the IMF's program of bankruptcies and layoffs--or else.

The Summers-Suharto meeting was preceded by a series of warning telephone calls to Suharto from President Clinton, German Chancellor Helmut Kohl, Japanese Prime Minister Ryutaro Hashimoto and Australian Prime Minister John Howard. It also followed a two-day-long high-pressure campaign from IMF Deputy Manager Lawrence Fischer, who met with Suharto and other Indonesian government officials.

The imperialist powers were outraged because Suharto hadn't moved vigorously enough to force bankruptcies of local banks and corporations and hadn't dropped from his new budget several high-employment public projects.

The IMF and the world's financiers are blaming Indonesia's financial crisis on corruption and cronyism. But their real aim is to secure payback on the estimated $135 billion in loans they have pumped into Indonesia in search of easy profits.

Suharto came to power in 1965 in a CIA/Pentagon-inspired military coup that killed an estimated 1 million people. Yet he got nothing but praise from the imperialist countries when he opened up Indonesia's natural resources to foreign exploitation.

His regime is under fire now because the imperialist bankers want him to push even harder against the masses with tax increases, austerity programs and layoffs. And if this provokes widespread rebellion--well, that's why Suharto and his army got built up by the U.S. in the first place.

Summers brought this message during a 40-minute meeting with Suharto Jan. 13. He was then joined by Defense Secretary William Cohen--who spent another 40 minutes hammering home the same message from the Pentagon.

When it was all over, Suharto pledged to go along with the IMF.

IMF President Michel Camdessus will be in Indonesia Jan. 15 to make Suharto sign an agreement.

The other pressure point right now is south Korea. Camdessus went there on Jan. 12 and got the leaders of both the militant Korean Confederation of Trade Unions, which last January led a general strike against mass layoffs, and the bigger, more conservative Korean Federation of Trade Unions to agree to join a commission with the bosses and politicians.

This body is supposed to discuss how to restore the economy. Its real mission, however, is to facilitate legislation permitting mass layoffs. The KCTU and the KFTU had previously said they would not join the commission.

Meanwhile, the south Korean Labor Ministry reported that "more than 1,000 South Koreans a day, or more than six times last year's average, are applying for unemployment benefits." (Agence France-Presse, Jan. 11)

In Indonesia, the economic collapse is staggering. According to a Jan. 14 AFP report, "Jakarta's growing army of unemployed ... are being offered a one-way ticket back to their home villages. In Jakarta alone, an estimated 2.5 million people have lost their jobs in recent weeks."

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