XXVI/YOUR MONEY OR YOUR LIFE!
not been enough to lure the North and the South's private lenders
back from their preference for bonds from the North. As was the case
in the early 1980s, when the last debt crisis hit, credit has become
rare and dear for the periphery. Between 1993 and 1997, there was
a steady increase in foreign direct investment (FDI) in Southeast Asia
(including China) and the main economies of Latin America (drawn
by the massive wave of privatisations). This tendency faltered in
1998 and could well do so again in 1999: FDI in Southeast Asia fell
by more than 3 0 per cent between 1997 and 1998; and loans fell by
14 per cent between the first half of 19 9 7 and the first half of 19 9 8.
IMF-dictated measures in the countries of the periphery have led
to recession, a loss of some of the key pillars of national sovereignty,
and a calamitous fall in the standard of living. In some countries,
these measures have merely worsened conditions that were already
unbearable for much of the population.
While the incomes of domestic holders of capital in these countries
continue to rise, there has been a disastrous fall in those of working-
class households. This chasm is as wide or wider than at any time in
the twentieth century.
During the months of September and October 1998, for example,
holders of Brazil's internal debt were receiving nearly 50 per cent in
annual interest payments, with inflation hovering below 3 per cent.
Brazilian capitalists and multinational companies, especially those
based in Brazil, could borrow dollars at 6 per cent interest on Wall
Street and loan them to the Brazilian government at between 20 and
49.75 per cent! All the while, these same capitalists continued to
siphon most of their capital out of the country, to shelter themselves
from abrupt changes in the country's economic fortunes.
PROGRESSIVE AND RADICAL POLICIES ARE BOTH
NECESSARY AND FEASIBLE
Global public opinion began to shift in 1997 and 1998, in response
to the failure of policies imposed by a combination of neo-liberal
governments, domestic and foreign holders of capital and the multi
lateral financial institutions.
In the wake of the neo-liberal whirlwind, a large number of people
in Southeast Asia, Russia, Brazil, Mexico, Venezuela, Argentina,
Central America and Africa have seen a drop in their standard of
living.