September 23rd 2000

  Buy Issue 2592

Articles from this issue:

Cover Story: Singapore’s changing direction

Editorial: Free trade: it’s time to fight back

National Affairs: East Timor: Whitlam was the culprit

Agriculture: Deregulation cuts a swathe through dairy industry

Law: Why Coalition will keep UN Committees at arms length

Eyewitness Report: S11 protests win few friends

Globalism: Australia out in the cold as three economic blocs form

South Australia: Hindmarsh Island bridge saga continues

Canberra Observed: ALP heads back to the future

National Affairs: Manufacturers, farmers: a natural alliance

Straws in the Wind

New Zealand: From basket case to “case study” ... and back to basket case

The Media

Books: 'PAPUA NEW GUINEA: People Politics and History since 1975', by Sean Dorney

Books: Pioneer police: 'Sand and Stone', by Kevin Moran


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Globalism: Australia out in the cold as three economic blocs form

by Patrick J. Byrne

News Weekly, September 23, 2000
The world is separating into three economic blocs, and Australia’s blind faith in free market economics is leaving it without a place in the world, as Pat Byrne reports.

A decade ago as communism was disintegrating, Peter Drucker, one the world’s leading business and economic analysts, predicted that the world would evolve into three powerful economic blocs — the Americas dominated by the US and the American dollar; Asia, dominated initially by Japan and the yen; and Europe with Germany at the economic helm.

Robert A Manning, Director of Asian Studies at the US Council on Foreign Relations, recently confirmed Drucker’s prediction, saying that now “the world is drifting slowly but steadily towards three separate economic and currency zones”.

The reason these three blocs are emerging is because Globalism is stalling. In a recent speech, US Federal Reserve Charmin, Alan Greenspan, admitted that this road is now blocked, saying that the “ability to move forward on various trade issues has come to a remarkable stall”.

Ironically, the drive towards free trade has not been stalled by anti-globalisation protesters in Seattle, Davos or Melbourne, but by the US Congress. Since Congress removed presidential authority to sign new trade pacts, it has not ratified a single new major trade initiative in the Americas since the North American Free Trade Agreement in 1993.

Indeed, the US helped stymie the WTO’s attempt to liberalise world agricultural trade at Seattle last January. Those markets will continue to remain closed in the US, EU and Japan for cultural and political reasons.

Europe has welded itself into an economic force. Now moves are afoot in Asia for a new regional economic alliance, which does not include Australia. The new moves follow on the salutary lessons the region learned from the recent economic turmoil — “don’t rely on the Americans”.

As Manning put it, “Already the trend towards regional fragmentation appears a move to counterbalance what is perceived as US arrogance, unreliability and abuse of power.”

The abuse of US power was driven home recently by Japan’s Dr Eisuke Sakakibara, known affectionately world wide as “Mr Yen”. He is vice-minister for international affairs in Japan’s powerful Ministry of Finance. He represented the largest supplier of funds for the Asian rescue package.

To a Canberra audience, Mr Yen said that just prior to the Asian crisis, Thailand’s Finance Minister returned from Japan with a US$3 billion grant. It was an attempt to avert the ensuing meltdown. A US State Department officer coincidentally arrived in Bangkok at the same time.

The US official offered no additional help to the Thais, and the Thai Finance Minister asked for none. The US official later admitted that he was relieved. After the political trauma the Clinton Administration went through with the Congress in 1995 over the US$50 billion rescue package for Mexico, President Clinton had no desire to ask Congress for more money, this time for Asia.

Mr Yen said that not only did the US take no serious part in helping its Asian friends, worse still, it used “unlawful intervention” to bring down the Suharto Government. He said the US was “Trying to use or even create the crisis to change a country’s political regime ...”

Mr Yen said that Japan tried to modify the West’s policy, particularly its economic pressure on the Suharto Government, “but against the coalition of the US, the IMF and Germany, I was powerless”.

Now as Asia emerges from the crisis, Mr Yen is again promoting the idea of Asia forming its own Asian Monetary Fund to look after Asian interests. Robert Manning says that what is know as ASEAN-plus-three (the ASEAN nations along with Japan, China and South Korea) is a reaction to the US pursuit of its own interests, which are different to Asia’s interests.

Mr Yen had floated the Asian Monetary Fund idea during the crisis, but it was vetoed at the time by the US and opposed by China and, incredibly, Australia. (To our credit, Australia did give aid to its suffering neighbours and appealed to the US to moderate its demands on the Suharto Government.)

Geographically, Australia may be part of Asia. But we may as well be another state of the US as far as Asia is concerned, as our politicians, Treasury and Department of Foreign Affairs and Trade officials continue to preach the US line on gloablism and free trade.

After the US behaviour during the recent Asian crisis, this makes us looking like a cat’s paw of the US, accentuating our isolation in the region.

Wake up Australia!

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