Europe feels the pain Asia once endured

PUBLISHED : Tuesday, 08 May, 2012, 12:00am
UPDATED : Tuesday, 08 May, 2012, 12:00am


How strange! Markets across Asia plummeted on news of Francois Hollande's election victory in France and of the punishment Greece's mainstream parties suffered at the hands of voters for their austerity measures. The election results are a clear rejection by ordinary people of spending cuts and belt-tightening.

These austerity measures are the same type of counterproductive and inhumane medicine - dispensed by Western institutions such as the International Monetary Fund - that prolonged and worsened the Asian financial crisis more than a decade ago.

In 1998, crisis-hit Asian countries would have suffered a lot less if we had been allowed a bit of the inflationary growth and stimulus vehemently denied by the IMF, just as Germany is now denying that option to southern Europe's economies. Of all people, we Asians should sympathise with European voters who are sick and tired of being their political and financial elites' sacrificial lambs. Theirs is a victory for democracy and ordinary citizens. Those austerity policies have wrecked lives and killed people, literally, in Greece, Spain and Ireland as they did in South Korea, Thailand, the Philippines and Indonesia.

The spate of suicides in Greece is reminiscent of the so-called IMF suicides in South Korea, of workers who lost their jobs, pensions and dignity because of IMF-imposed measures that caused the economy to contract further. Germany is hated in Greece today the same way the IMF is still despised in many Asian countries. The barely reported pogroms against ethnic Chinese in Indonesia during the 1998 riots - in a country that has long harboured anti-Chinese racism - were at least partly provoked by the IMF measures that helped strangle the economy. Even the IMF has admitted to making mistakes during that crisis.

So why didn't Asian markets cheer the latest news? Perhaps, thanks to globalisation, domestic Asian players are increasingly in the minority. These markets are played by the same Western financial institutions, run by the same types of people who give us crisis after crisis, and economic dogma after dogma.