Face the Facts! 9 - Is the Financial Crisis Over? Not for Millions of People
How the Global Economy Harms People and the Environment
#9, Wednesday May 5,1999
Is the Financial Crisis
Over?
Not for millions of people.
- Recently, the IMF has declared that the global financial crisis is over.*1The crisis may have passed for international bankers and foreign investors, but there is no end in sight for the millions of average people in affected countries that are still suffering as a result of this crisis. A Wall Street Journal article warns, "there’s a wide gulf between the end of the financial crisis and the restoration of healthy economic growth."*2
-
Unemployment rates have increased
pre-crisis à post-crisis*3:
> Korea – 2% à 11%;
> Thailand – 1.5% à 9.0%;
> Indonesia – 4.9% à 18%;
> Brazil – 5.8 % à 10%;
-
Economic growth has stagnated in crisis
countries:
> Brazil – Real GDP is expected to fall 4.8 percent in 1999 after a tiny 0.2% rise in 1998*4;
> Thailand – GDP fell 0.4% in 1997, fell another 8.0% in 1998 and zero growth is expected for 1999;
> Indonesia – GDP growth for 1997 was 4.9%, in 1998 it was –13.7% and zero growth is expected for 1999 *5.
- For short-term investors, high interest rates and devalued currencies spell the end of the crisis, but people’s suffering in these countries is deepening as G8 leaders avoid addressing the social and environmental impacts of the crisis; impacts that are the seeds of the next crisis.
*1 Gerard Baker and Robert Chote, "[IMF Managing Director] Camdessus says Global Financial Crisis ‘seems over’," Financial Times, April 26, 1999; "So far we’ve avoided the doom, and the gloom is beginning to lift," IMF First Deputy Managing Director Stanley Fischer quoted in Michael M. Phillips, "Apocalypse? NO: Round the Globe, Signs Point to Final Days of the Financial Crisis," Wall Street Journal, Wednesay, April 14, 1999.
*2 Michael M. Phillips, op cit.
*3 World Bank and International Confederation of Free Trade Unions cited in Sarah Anderson and John Cavanagh, "Bearing the Burden," Washington, DC: Institute for Policy Studies, Discussion Draft: March 19,1999.
*4 Institute for International Finance, "Regional Overview: Latin America, Inter-American Development Bank Annual Meeting," March 1999.
*5 Data for Thailand and Indonesia, Asian Development Bank, Asian Development Outlook 1999, New York: Oxford University Press, 1999.
For more information contact:
(202)783-7400, Matthew Siegel ext. 250 or Andrea Durbin ext. 209
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