THE ASIAN MARKET MELTDOWN SHAKES AUSTRALIA

by David Thompson
"Although Asia's crisis has manifested itself in regional foreign exchange markets, it is not really a currency crisis at all. Instead, it is something much more dangerous and difficult to deal with - a banking and political crisis." - Alan Wood, economics editor, The Weekend Australian, October 25th, 1997.

Those who have insisted that the future of Australia lies in "Asia", and that Australia is "a part of Asia" sought to deal Australia "in" to what was formerly one of the fastest growing economic regions of the world. As a consequence, they have also dealt Australia "in" to an unknown period of economic and financial instability that will damage the interests of ordinary Australians who were never consulted about being "a part of Asia".
We note that the high-profile businessmen who were scathing of anyone (like the League, Pauline Hanson, Graeme Campbell, etc,) who questioned the new dogma of being Asian, are now a little subdued. The question now is how badly will Australia suffer from the Asian "melt-down"? Treasurer Costello attempts to minimise the possible damage to our economy, but the reality could be much different.

It is claimed that the Southeast Asian economies like Thailand, Malaysia. Indonesia. Philippines, etc., have fundamental weaknesses that make them vulnerable, but that the powerful north East Asian economies like Japan, South Korea and even China are much bigger and more stable. Since most of Australia's Asian trade is with the north east Asian economies, the impact should be minimal here. Not so, according to some observers.

Back in August the federal Treasury was warning that weak exports and economic growth in some Asian economies over the last two years were masked by "high growth rates, strong investment and high corporate profits". Treasury has always been aware of Japan's recent sharp economic slide, and the fact that, as Australia's largest single trading partner, this could have a serious economic effect here. South Korea is Australia's second largest export market, and if the Korean currency also collapses (it was under extreme pressure last week) there is a real risk that the Australian dollar could suffer much more.
Westpac's chief manager of foreign exchange, Wayne Raven, said last week that our dollar "was now completely at the mercy of international investors who were lumping the dollar in with the troubled south-east Asian currencies, and ignoring Australia's improving economic fundamentals".

The truth is that Australia, having placed itself at the mercy of the 'global market', must now face the reality of economic rationalism. While Malaysia's Dr Mahathir is undoubtedly correct when he accuses foreigners of colluding to manipulate the value of national currencies, the reality is that "The Market" is not rational at all. In many respects it is wildly irrational, and "market values" often have little relationship with reality.

One observer who foresaw a heavy impact on Australia as a result of the Asian connection is Dr Peter Brain, of the National Institute of Economic and Industry Research. Early in October he warned of impending collapse in Asia. He now expects that the Asia crisis will send Australia into recession, with unemployment moving up to 11%. (The Weekend Australian, 25/10/97).
Dr Brain expects Asian economies to suffer negative growth for three years. "It will affect Australia's major export industries - including all of the agricultural sector, as well as our iron ore, gold, gas and steel industries. The implication for Australia is exports will be lower, the current account deficit will be higher, interest rates higher, growth will be lower and jobs will be lost."
He omitted to mention tourism, which will obviously be seriously affected, as large numbers of Asian tourists have previously visited Australia.

One factor common to all the Asian economies shaken by the present crisis is that all had "floated" their currencies. That is, instead of "pegging" the value of the currency to another, more stable currency like the U.S. dollar, governments have permitted The Market to decide the value of their currencies, and therefore surrendered some sovereign control over their economies. Readers with longer memories will recall that Australia 'floated' the dollar in 1984, under A.L.P. Treasurer Keating. Keating and then Prime Minister Hawke then turned their attention to what remained to be done to completely "internationalise" the Australian economy.

An "expert" on the Asian region, Professor Ross Garnaut, was called in to advise the government, and late in 1989 The Garnaut Report was published. The essence of this advice was that since North-East Asia was the fastest-growing economic region in the world, the future of Australia depended upon interlocking the Australian economy with the Asian "tigers". The report was actually called "Australia and the North-East Asian Ascendancy". Ambitious politicians and starry-eyed businessmen from around Australia insisted that the Garnaut Report should be vigorously followed to the letter. It is largely the attempt to implement this report that has led to where we now stand: at the mercy of The Market.

The League has warned for some years that welding ourselves to "Asia" in an economic sense was a highly risky strategy, and was disastrous in a cultural sense in the longer term. We have noted in the past that the Japanese economy, for example, is a fragile economy in the sense that Japan has few natural resources, except for her people. On top of this, the Japanese debt problems, from when financial credit was rapidly expanded upon a base of highly inflated property values in the 1980s, has led to the necessity of writing off 35 trillion yen (US$400 billion) in the last five years. Other Asian economies also have debt problems.

What has unfolded in Asia and is spreading elsewhere, is the result of deliberate policy; the policy of centralisation, with banking used as a tool in the service of this policy. Currency chaos is the visible effect of the deliberate policy. Once Australian sovereignty was submitted to 'market' forces, as it was by Hawke and Keating in the 1980s, we were obliged to suffer the results. In the years to come, the Asian currency melt down will be used as the reason why an Asia-Pacific Economic Community, with a single common currency, is essential for stability. If we are determined to be "a part of Asia", Australia will be included in this new economic, and ultimately political grouping.

What are the alternatives for Australia? The realities of culture, and of true economics (as distinct from finance) must first be observed. Australia is (was) a sovereign nation with a common racial and cultural identity. As an immensely wealthy nation, Australia can produce huge surpluses of production, and could be almost completely self-sufficient in economic terms. This should be a primary national objective. Foreign trade must be placed in its proper place - the exchange of surplus production for those things, which we are unable to produce (or do) here. Such exchanges should primarily focus on our cultural and political kin in an historical sense, since this is where strengths lie in times of crisis.

If unorthodox financial arrangements are necessary to achieve the above, then they should be used. Finance must be made to serve the interests of the nation, not enslave it. The Asian banking crisis has demonstrated that Australia is seriously vulnerable to The Market while ever the policy of centralisation is pursued.

MR HOWARD AND THE CHOGM CIRCUS

Some third world nations and green groups are scathing about Prime Minister Howard's diplomatic victory at the Commonwealth Heads of Government Meeting (CHOGM) in Scotland last week. Mr. Howard managed to convince other leaders that no specific targets for restricting "greenhouse gases" should be set as yet pointing out that emission controls would be funded out of taxes. But Australians should begin to brace themselves for measures in the next budget to finance the reduction of greenhouse gases.

As yet the evidence for global warming being a direct result of mankind's industrial activity is far from compelling. But it is the ideal excuse to further centralise political power. While the West is accused of ignoring the interests of the third world, it should be noted that third-world economies contribute heavily to the production of carbon dioxide. Researchers have revealed that the Indonesian bushfires have set alight peat bogs that could release more carbon dioxide than all the power stations and cars in Western Europe emit in a year. If the fires only burn for six months, they will produce a billion tonnes of carbon, while Western Europe produces less than 900 million tonnes per year.

MANDELA'S OFFER

DAVID IRVING CONFRONTS HOWARD

At a meeting in London on his way to the CHOGM conference in Scotland, Mr. Howard was surprised to discover himself confronted by British historian David Irving in the audience. Irving asked Howard, with whom he is engaged in legal action for defamation, whether Australia was suppressing free speech by refusing him a visa. Howard's evasive reply was, nevertheless, instructive: "The reasons relate to in part, as you know, some of the views expressed on matters which we believe if propagated in Australia would not be in the Australian national interest".

Does Mr. Howard now concede that Irving was banned because some Australians might not like what he might say? That is, on a matter of freedom of speech? Some newspapers, including Melbourne's Herald Sun (27/10/97) are highly critical of Mr. Howard's position. Irving continues to demonstrate that he has not gone away.

TELSTRA SHARE FLOAT

The massive operation to offer one third of Telstra to the Australian public and institutional investors has been enthusiastically embraced by "The Market", even before the float takes place. Some, however, raise moral issues about the federal Telstra fund-raiser. For example, how can the Commonwealth Government sell off something that does not belong to it? Was not Telstra once Telecom, which was once a part of the old Post Master General's Department (P.M.G.)? Was this huge institution not built with (generous) taxpayer's funds, and could it not be regarded as already belonging to Australian taxpayers? Why should taxpayers be invited to pay for shares of one-third of an institution of which taxpayers already own 100%? Perhaps such questions should be directed to Treasurer Costello, or Prime Minister Howard.

Perhaps Mr. Howard and Mr. Costello intend to do the right thing, and pay the expected $14 billion, Telstra windfall to all Australians, rather than squander it on projects deemed politically correct by noisy pressure groups, in order to buy votes? Can we expect a cheque in the mail each?

IRELAND'S PRESIDENTIAL ELECTION

Monarchists should note that one of the republics touted as a model for a future Australian republic, Ireland, is presently enduring a campaign to elect the next president. As a symbolic presidency, with little real political power (but considerable influence) Ireland's president is often held up as a unifying factor to Australians.

But the present campaign is turning a little nasty, with allegations that one of the candidates representing a major political party might have closer links with the I.R.A. than previously revealed. Not even the Irish president can be a unifying influence if he/she has to be elected. And the fact that the high-profile candidates are standing on party platforms should send a message to Australians. An elected president cannot be above the party political power game.

ERIC BUTLER REPORTS FROM CANADA

Advisory National Director Eric Butler and his wife represented the Australian League of Rights at the 50th anniversary of the establishment of the Canadian Intelligence Services by Canadian League of Rights National Director, Mr. Ron Gostick. Eric and Elma Butler were Guests of Honour at a banquet held outside Edmonton, Alberta. Eric Butler was presented with a plaque outlining his services to the British Commonwealth. Before leaving Canada for the United Kingdom, Eric Butler faxed the following short report

"As I listened to the tremendous reports of how Canadian patriots like journalist Doug Collins have been persecuted by the Canadian Human Rights Commission, I realised how Australians were fortunate that they had managed to defeat the proposal to include criminal sanctions in human rights legislation in Australia. The Doug Collins case has still to be finalised and will probably finish up before the Supreme Court. Doug Collins outlined an incredible story at the Edmonton Seminar, but the famous veteran fights on.

"My first Impression of the Canadian situation is how dramatically it has deteriorated since my last visit a few years ago. Australians concerned about their politicians 'rorting' their travel expenses might reflect on the Canadian political scene, where 20 former Conservative Members of the Saskatchewan Provincial government have been charged with massive corruption. So far, eleven of them have been convicted, and are in prison. A former Senator is currently before the courts.

"As I arrived in Canada, the big news was that the Finance Minister Mr. Paul Martin had balanced the federal budget and eliminated the deficit. But as one read the reports concerning this achievement, one noted that it made no difference to the national debt. An Opposition Member pointed out that while the budget was almost balanced, there were still 1.4 million Canadians unemployed. Reform Party leader Preston Manning offers no constructive alternative to financial orthodoxy.

"As this report is being written a news item from Western Canada reports that yet another major heavy manufacturing business has closed down as a result of the free trade policy, adding further to Canadian unemployment. As in Australia, businessmen are urged to solve their domestic problems by exporting overseas. But the current problems with the Asian market is having a sobering effect on export enthusiasm. While Canadian Trade Minister Sergio Marian is protesting to Russian officials about the terrifying experiences of Canadian businessmen in Russia, where they are subjected to death threats, Canadian investors in Russia find it impossible to have court rulings enforced. Such are the results of globalism, which lead to increasing corruption everywhere.

"Canadians are becoming increasingly concerned about what has become a growing flood of Asian immigration and the associated problems of multiculturalism, those who tell Australians that multicultural Canada is a great success story are either deliberate liars or dangerous idiots.

"Clearly there is much worse to come. It was the famous Albertan Premier William Aberhart who told his audiences: 'If you haven't suffered enough, it is your God-given right to suffer some more.'

FROM THE PRESS

Weekend Australian - 25/10/97
"Mr. Tony Blair's essay on the Commonwealth (All Aboard on the Good Ship CHOGM, Opinion, 23/10) was full of the usual platitudes that are commonplace in this day and age; free access to goods, free wade, education, tackling poverty and disease. If he is serious about these matters, then the Commonwealth is a source for good as it has been in the past. "However, I fear he is being just a little hypocritical. "Where is the evidence that Britain will allow free trade with Australia by abolishing any or all tariff barriers to us so that we will have immediate free access to Britain's markets and vice versa? "How can Britain allow free access to Commonwealth countries to its market while it belongs to and appears to be becoming subservient to the European Union?
"But, more importantly, his vision for the future is quite frightening. I, for one, do not wish to belong to 'one world - a developed one in which all nations will share'. Who is to determine what is developed and what sharing means? More importantly, who is to lead such a world and how is such a leader to be elected or appointed?
"If this is his vision for the future, then there can be no place in such a world for the Commonwealth. "No, thank you, Mr. Blair. I would rather live as an Australian and not as a citizen of the world."
ROSS A. VINCENT, Sydney

Extreme prejudice - The Australian, 22/l0/97
"I am intrigued. Yesterday you reported the Greenpeace raid on Kirribilli House (High Anxiety: Greens Breach PM Security). There is TV footage of the media trotting along as the Greenpeace truck approached the gates. "Why have these people been charged with only trespass? Had it been timber workers protesting the destruction of their industry and the resulting decimation of the regional towns, would the charge have been trespassing? "Why haven't the media personnel who followed them to the site been charged with being accessories? "How can our society be expected to have any respect for the law or faith in the system while the law is so blatantly waived for some and used as a weapon against others?"
PETER HINDRUP, Bellingen, N.S.W.

"Would someone answer the following questions regarding the Greenpeace raid on the Prime Minister's residence? "Why did the media organisations (especially the television stations) actively collude with Greenpeace in the raid? "Why did they not contact the police and other security organisations and inform them that the raid was going to take place? "Were the security guards at Kirribilli House armed? If they were, why did they not use their weapons?"
KEITH JENNINGS, Pt. Graceville, Qld.