PREFACE/XIXRobert Reich is quite right when he says that a ceiling has been
reached. A recession in the North and an increase in interest rates in
the South could lead to a huge drop in consumer spending in the
North and across-the-board bankruptcy of households in countries
of the periphery - in line with what we saw in the 1994-
Mexican crisis, and with what we have seen in the Southeast Asian
crisis ofl997-1998and the Russian crisis of 19 9 8.
Three examples illustrate this fall in income for the majority of the
world's population. First, the UNDP notes that in Africa, 'Consumer
spending has on average dropped 20 per cent over the last 25 years'.
Second, the UNDP notes that in Indonesia poverty could double as a
result of the 1997 crisis. According to the World Bank, even before
the crisis there were 60 million poor in Indonesia out of a total
population of 203 million. Third, according to Robert Reich, real
incomes continue to fall in much of Latin America. According to a
World Bank report released at the end of 1998 (Agence France
Presse, 3 December 1998), 21 countries experiences a fall in per
capita income in 1997. The same report estimates that in 1998, some
36 countries - including Brazil, Russia and Indonesia - will register
a drop in per capita income.
According to a 26 November 1998 press release issued by the
Russian undersecretary of the economy, unemployment was
expected to rise by 71 per cent between the end of 1998 and the
beginning of 2001 - from 8.4 million to 14.4 million.
STRAIGHT TALK ON THE CRISIS FROM CAMDESSUS AND
CLINTON
Up until early 1998, International Monetary Fund (IMF) director
Michel Camdessus had played down the scale of the Mexican and
Asian crises. By the time of the October 1998 joint World Bank-IMF
summit, however, he had come around to saying that the crisis was
indeed systemic. At that same gathering, Bill Clinton declared that the
crisis was the most serious one the world had experienced in 50 years.
ESTABLISHMENT ECONOMISTS CRITICISE POLICIES
DICTATED BY THE IMF, THE WORLD BANK AND THE G
The severity of the crisis in a large part of the world economy has led
a number of Establishment economists to subject IMF and G7-