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Issue 34, January 1999

Asian political and economic crisis mounts

A QUIRK of fate has seen Malaysia's Prime Minister, Mahathir Mohamad, playing host to both the Commonwealth Games and the Asia Pacific Economic Cooperation (APEC) summit within two months of each other and at a time of unprecedented crisis for his regime.

In September, as the Queen of England was whisked through the streets of Kuala Lumpur, thousands of demonstrators were braving the batons and tear-gas of the riot police in protest at the arrest of former deputy prime minister and heir apparent to Mahathir, Anwar Ibrahim.

By November, as leaders of some of the most powerful nations in the world gathered for the APEC meeting, the 'Reformasi' movement founded by Anwar and his political allies had gained a wide layer of support - in Malaysia and internationally. Although the trial had been conveniently suspended for the duration of the summit, the demonstrations - and police brutality - continued unabated. Then, after nine days in detention, Anwar appeared in court with a swollen face, black eye and sore ribs. According to Mahathir, the injuries must have been self-inflicted! Characteristically unrestrained by legal niceties, Asia's longest ruling head-of-state since the overthrow of his neighbour Suharto in Indonesia, has pronounced Anwar guilty of everything from subversion to 'unnatural sexual acts'!

Anticipating arrest on trumped-up charges of this type, Anwar declared, in a letter published on the internet and on a video-taped speech, that there was a political conspiracy against him because of his challenge to Mahathir's cronyism and authoritarian methods. In fact, it was soon after Suharto's defeat at the hands of a mass movement against corruption and nepotism, that similar accusations were raised inside the ruling UNMO party and Anwar had advised his mentor to make reforms before he suffered the same fate.

  The two men began to clash seriously over what kind of policy Malaysia needed to adopt in the face of the economic hurricane sweeping through East Asia. While still in office, as finance minister as well as deputy premier, Anwar pushed through a harsh IMF-type austerity package in December of last year. As the country's economy failed to respond, Mahathir took a more and more protectionist approach, denouncing foreign speculators, a 'new form of colonialism', and introducing capital controls which upset free market capitalists at home and abroad.

In microcosm, this power struggle reflects the schism in the camp of the representatives of capital, as the Asian crisis becomes a world crisis. How to reconcile the contradictory pressures on a world scale between protection and free trade, deflation and reflation? And, at the back of all their calculations, how to avoid new explosions on the scale of the unfolding Indonesian revolution?

The sharp snub to Mahathir administered by US Vice President, Al Gore, on his arrival in Kuala Lumpur - expressing support for the jailed political rival - is in stark contrast to the US government's support for General Suharto almost to his last hours in office. Gore was not motivated solely by the US government's obvious preference for 'free-market' capitalism as opposed to a closing of doors on profit-taking by US investors. Nor was he displaying a devotion to democratic principles but a well-grounded fear of a situation leading to default on US debts... or worse.

If allowed to continue, the movement against corruption and nepotism could begin to involve wider layers of the working class. Serious splits at the top in society, in the face of economic and social crisis, can lead on to revolutionary upsurges of the nature seen developing again in Indonesia. For the same reasons, an editorial in the Financial Times on November 13 concluded that it would be better if Mahathir went quickly "while there is still room for an orderly transition"!

  That same day, in the Indonesian capital Jakarta, demonstrations by thousands of students were joined by residents of the city's poorest districts. Tanks and live ammunition were used against the unarmed protesters in the largest demonstrations so far this year. There has been a marked shift in the mood of the struggle, from the celebrations which greeted the fall of Suharto to a much more serious attitude today. Increasingly, workers are getting involved, fighting against the severe effects of the economic crisis - more than ten million jobs have been lost since the crisis broke a year ago.

And as the revolutionary movement gathers pace, so the demands put forward develop. Understanding that getting rid of Suharto was not enough, the latest protests have pushed forward the demand for an end to military involvement in Indonesian political life. The call is being raised that the reform movement goes further. People want an end to cronyism, want Suharto put on trial and his family investigated, so that their colossal wealth can be traced and used to alleviate the economic and social problems.

The successor to Suharto, President Habibie, left for Kuala Lumpur in an effort to show he was unmoved by the mounting demands for his resignation and that of his armed forces commander, Wiranto. He and President Joseph Estrada of the Philippines had put behind them their untypical show of public disapproval for Mahathir's treatment of his former right-hand man.

At the meeting of 21 nations who, between them, account for about half of world trade and output, there were high hopes of some kind of unanimity on how to cooperate in the face of mounting tensions. Instead, disharmony seems to have been heightened. Immediately after the APEC summit, President Clinton, absent from the Malaysia gathering to deal with an unresolved conflict with Iraq, was heading for further strife on his visit to Japan. Here, as opposed to elsewhere in Asia, the prescription of all the representatives of big capital is 'spend, spend, spend'.

None of this has the welfare of the people of any of the Asian countries at heart, but those of the owners of capital and of industry who tear the world apart with their rivalry and greed in the face of economic calamity. Only the actions of the organised working class and the oppressed layers in response to their exigencies will be able to bring the economies of Asia back from the brink and rebuild them along socialist lines.

Elizabeth Clarke

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