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Mexico 'Bailout' Revisited

Militant editorial
Vol. 61, no. 44. 15 December 1997

Capitalism's "tigers" in southeast Asia have turned out to be nothing but paper-maches. The so-called Asian miracle, promising millions that the profit system would lift these "emerging markets" into the wonders of advanced capitalism, is turning into a nightmare, not just for working people, but also for the middle classes and the ruling bourgeoisies of south Korea, Indonesia, and Thailand.

"I have come here to beg the forgiveness of the Korean people," Lim Chang Yuel, the country's minister of finance and economy, cried in crocodile tears in a televised speech December 3. "Please understand the necessity of the economic pain we must bear and overcome," he said, hoping to avert a major showdown with the labor movement, which is being asked to swallow deep social cuts and layoffs for the sake of international finance capital.

The IMF "bailout" of south Korea, the largest ever, following similar packages engineered largely by Washington and Tokyo in Indonesia and Thailand, has set in motion in Asia a process patterned after the so-called rescue of the Mexican peso.

What happened in Mexico is what toilers and other social classes can expect in southeast Asia. Only this time, there are three countries involved so far, rather than one, with a combined population of 311 million compared to the 96 million people in Mexico. By the time the Mexican government of Ernesto Zedillo paid back the "loan guarantees" cobbled together by Washington in 1995, budget expenditures for schools, hospitals, housing, food subsidies, pensions, and other programs won by workers and peasants had been slashed. Real wages had also declined and unemployment increased. At the same time, U.S. capitalists ended up owning a much bigger chunk of the country's national patrimony.

As the recent events confirm, the fundamental relationship between U.S. imperialism and the rulers in south Korea, Indonesia, and Thailand has not changed. What is happening to toilers in those countries right now is another variant of what working people in Mexico faced in the last three years and what the future holds for every country held in economic bondage to world finance capital. This relationship among the oppressed and oppressor nations, debtors and creditors, accelerates conflicts among the imperialist countries themselves. This is what Wall Street's conduct toward Tokyo shows. It underlines the fact that, in the context of world capitalism's deflationary conditions, the stability of the imperialist countries themselves is increasingly held in bondage to the effects of crises and breakdowns in the exploited Third World.

The worst nightmare for U.S. "investors" and the bourgeoisies in southeast Asia, however, is how working people and other exploited producers may respond. If the massive labor upsurge in south Korea less than a year ago is any indication, the masters of world finance capital and the local exploiting classes may be in for a surprise this time. Columnist Thomas Friedman's arrogant conclusion that "there should have been a revolution but there was barely a demonstration" in Mexico after the U.S.-led "bailout" will eventually turn to its opposite somewhere in the world, as the financial crisis spreads from the Korean peninsula to Japan and Brazil.

As lawful and inevitable as the workings of the international capitalist system and its resulting sudden breakdowns are, the resistance, mobilization, and organization of the gravediggers of that social system - the working class and its allies - are equally inevitable. Out of the social explosions that are coming millions will act towards taking power out of the hands of the exploiting classes and changing the world forever, following the example of the Bolsheviks 80 years ago and of Cuban revolutionaries four decades later.