Statement of the Workers International Faction – 19th July 1998
NOT a country or a region in the world can escape the effects of the general and gathering crisis of world imperialism.
It is now openly acknowledged that the continuing rescue operations mounted in an effort to salvage crisis-hit South-East Asia cannot continue. Less than three months ago optimistic financial observers were hopeful that the crisis could be isolated, that it would not spread to Japan and China. Today the Japanese yen is falling, accompanied by bank and company collapses. This, together with the free-fall of the currencies of Indonesia and Thailand exert great pressure on China, as Asian competitors undercut both domestic and foreign markets. The Chinese textile industry alone is cutting its workforce by 600,000.
To this must be added the deepening economic panic and chaos in the former Soviet Union as attempts to force the pace of reconstructing capital fail, and foreign fund managers pull out, leading to a 50 per cent decline in Russian stocks in US dollar terms since May this year. World capital, in its panic-stricken efforts to prevent the complete collapse of the Russian system was obliged to make a $22 billion loan, even at the risk of intensifying its own problems.
The knock-on effect of this crisis in Europe and America leads the big banks and industries to seek new mergers, cut costs, drive up productivity, sack workers and prepare for trade war. The picture emerges of a world financial and economic crisis which will make the 1931 crash look like a storm in a teacup. Already there are political repercussions as wide layers of workers and the oppressed are forced to defend their jobs, wages and conditions.
In the former Soviet Union miners, and other workers, including teachers, nurses and doctors take strike actions, calling for the removal of President Yeltsin as he attempts to force the government to implement the conditions required by the IMF in return for loans, which they know will never be repaid. In the US, the strike at General Motors, and the threatened strike of the Teamsters, together with cheap products from Asia undermining the domestic market, last month already produced the sharpest fall in US industrial production for five years. Continue reading

