THE ASIAN CRISIS AND ITS INTERNATIONAL REPERCUSSIONS/233region, this would create serious problems for the Americans. Indeed,
it would increase global financial and monetary instability. It is
unlikely that Japanese capitalists will want to bear responsibility for
such an outcome.
Lastly, the US has a strong military presence in the region (particu
larly in Japan and South Korea), and they have shown no intention
of changing this state of affairs.
WHO WILL PAY FOR THE DAMAGE DONE?
A cynical editorial in the 5 January 1998 edition of the Financial
Times claimed, 'Profits are for private owners while losses, when suf
ficiently large, are covered by the taxpayers.' International bankers
are asking the South Korean authorities (and those in the 'dragons')
to nationalise the astronomical short-term debts contracted by
private South Korean firms. This is exactly what happened during the
1980s Latin American debt crisis. Adopting the same posture as they
did during the Latin American crisis, private bankers are threatening
to cut off all loans to Asia - to South Korean capitalists in this case -
if the South Korean government does not step in for private
companies through a public bond issue aimed at paying off their
debts. The Financial Times editorial continues,
Creditors who granted high-risk loans will be saved - first by the
IMF, then by South Korean taxpayers - for the simple reason that
they and their debtors are too big to be allowed to go bankrupt. To
add insult to injury, some creditors are going to make a fortune.No further comment is needed, except perhaps to point out that
this process will accelerate the tendency towards a reliance on
financial markets for credit. Until now, Asians had preferred to
contract direct short-term loans, now they will have to issue bonds
on international financial markets.
A DOUBLE STANDARD ON BAIL-OUTS
In their talks with Asian governments that approached the IMF for
assistance, the IMF and American officials conditioned their aid on
the shutting down of a large number of badly managed financial