It is sheer nonsense for government and business leaders to claim that the fall-out from the Asian economic collapse can be contained. On a global level, Australia has a marginal economy that has become more and more dependent upon Asian markets. Besides, there is not a single country in the world which has not already felt the chill East Wind. The Australian balance of trade figures tell the same story. In November 1997 we had a trade surplus of $509m. In December 1997 we had a deficit of $880m. Although the Government claims that this situation was due to a surge in imports, the truth is that Australian exports have taken a battering, with significant declines in services such as tourism and 'export education' and the closure of a number of airline routes. This decline is mirrored in the fall in commodity exports to Asia. In January 1997 Australia shipped 60,000 tonnes of meat to South Korea. This plummeted to 12,000 tonnes in January 1998. A similar picture is true for other commodities such as wool and cotton, gold and platinum.
We can only expect that the situation will worsen here as the Asian 'miracle economies' spiral further downwards, despite all the efforts of the IMF. The 'Asian tigers' have been de-clawed. Japan is in the doldrums. It is said that 100 South Korean companies per day are going bankrupt. Suharto's Indonesia appears in terminal crisis and Malaysia's dreams of emulating high-tech Singapore have been dashed. Singapore itself is in deep trouble, along with Hong Kong. Only the fact that the Chinese currency is not fully convertible has shielded that country to some extent from the crisis and it is only a matter of time before the effects of the Chinese Government's rush to embrace the capitalist market become apparent. This crisis is a classical crisis of overproduction worsened by massive over-borrowing from the large banks. Already several big banks have gone down the tubes in Japan as a result and we can expect more to do so as creditors default on their loans. The weakened state of the Japanese banks will have further ramifications for Australia when many Australian companies attempt to renew loans from them later this year. It is a safe bet that with these banks themselves dependent on Japanese government bail-outs that they will not be willing or able to renew the loans.
There is every sign that the world will experience major recession over the next year or so. Indeed a recent article in the Melbourne Age (reprinted from the British Guardian) dared to use the dreaded 'D word' - Depression. Whilst we as Marxists are entitled to laugh at the pretensions of the scribblers who proclaimed the 'death of socialism' and the triumph of capitalism, it would be absurd to imagine that the system will automatically collapse or lead to the spontaneous growth of mass socialist consciousness. The effects will be contradictory, although we can expect better times for socialists than we have enjoyed for some years now. What is rather more certain is that the bosses will work even harder to dump the burden of the crisis of their system onto the backs of the working class. This means they will redouble their efforts to smash our unions and drive the wages and conditions of those still employed into the ground. The task of the labour movement is to prepare for the class battles looming on the horizon. This is also why the defence of the wharfies - a bastion of unionism - is so important today.