No Complacency on Asia
ASIA'S CURRENCIES have stabilized, and stock markets are bouncing back. The U.S. economy continues to roll, with 358,000 jobs created last month as wages rise, unemployment remains low and the Dow Jones average forges ahead. Maybe, a member of Congress might think, the Asian financial storm has blown past. Maybe we don't have to give the International Monetary Fund all those billions the Clinton administration is pressing for.</br></br>If only it were so. Unfortunately, on many levels, it is too soon to relax. For millions of workers and their families in Indonesia, Thailand, South Korea and elsewhere, trouble is just beginning. Even if their nations' currencies and stock markets have bottomed out, the consequences of rising unemployment, slowed economic growth and declining standards of living have yet to unfold. To some extent, such consequences are unavoidable. But Americans have more than a humanitarian interest in mitigating Asia's pain.</br></br>So far, the economic impact on the United States has been, if anything, beneficial, as Asia's crisis dampens inflationary pressure here. But in the coming months the impact is likely to be less positive, as competitive pressures threaten some American jobs. And if the economic crisis worsens and provokes ethnic riots in Indonesia and social instability elsewhere, the national security and economic impact on the United States could be adverse in the extreme.</br></br>Moreover, the financial situation remains precarious. This is especially so in Indonesia, where the dictatorial President Suharto refuses to recognize the need for more democracy or to prepare the ground for a political transition. Democratic South Korea is in far better shape, thanks to the earnestness and skill with which President-elect Kim Dae Jung has devoted himself to far-reaching economic reform. But even South Korea remains vulnerable to shifts in fickle and sometimes irrational international financial flows. So do nations not yet infected, or barely infected, by the Asian "contagion," from China to Hong Kong to Russia to Brazil. Any one of these developing nations, or all of them, could be tripped up by a congressional refusal to support the IMF.</br></br>Critics attack the IMF, the international organization leading the financial rescues of Asia's economies, on two grounds. Some accept its importance but cite the mistakes it has made. It has made mistakes, and it does need to be more open in its functioning. But the reforms it's promoting this time around -- for less corruption and cronyism, greater openness, reliable unemployment insurance and more -- will promote democracy and social welfare if faithfully implemented.