Washington, 5 March 1998 (RFE/RL) - Former U.S. Secretary of State Henry Kissinger says the world is dealing with financial crises like that in Asia only as economic questions, but should be tackling them on a political basis too.
Kissinger says he has no quarrel with the International Monetary Fund (IMF) and it's quick action to forestall impending financial crises. They are dealing with a crisis, he says, and he has "great sympathy" with their proposals.
However, Kissinger says he questions the "underlying assumptions" that world leaders are making by allowing the IMF to push ahead with longer-term economic solutions without taking up the political questions first.
"Is it really true that countries like Korea, that emphasize full employment, life-time employment, and the institutions that go with it, and that after all for 30 years have not done badly, that this must be totally ripped apart and that everyone must learn a new system," pondered Kissinger.
The IMF rescue program with Korea calls for the country to eliminate the system of chaebols -- large, family-based secret business conglomerates -- and to institute standard western corporate business practices. Among those practices are allowing workers to be laid off from jobs.
Kissinger says he is concerned that doing this in a family oriented society produces enormous social costs. "Is it not our obligation to look at the political costs of this too?," he asked.
Kissinger, who was national security advisor and then Secretary of State in U.S. President Richard Nixon's administration, spoke Wednesday at a conference in Washington marking the 50th anniversary of the global trading system. It was sponsored by the policy-study organization the Brookings Institution.
Kissinger said no one is asking the political question of what happens in Korea in a few years if a surge of nationalism undoes in two or three years what is being done now in the name of globalism.
The former secretary, who runs his own firm dispensing advise on international issues to private corporations, says he is also "deeply worried" about the situation in Indonesia. "I do not question the IMF program," he said, but political questions must be asked about forcing banks to close in a country where an ethnic minority controls a major part of the economy and the country is in the midst of political transition.
Indonesian President Suharto, in the midst of his reelection, has resisted implementing major parts of the IMF program worked out with his country. Kissinger says there are legitimate political questions involved that cannot be ignored as well as financial ones. "If you magnify these insecurities sufficiently," he said, "you can get a flight of capital that exceeds anything the IMF can put in."
He said it was particularly inappropriate for the U.S. to send emissaries, including former Vice President Walter Mondale, to persuade Suharto. He said it was wrong for the U.S. to tell Indonesia, a nation of 210 million people and "the keystone of Asia, that the carrying out of a technical IMF program is the only test by which you measure its importance."
Kissinger said he faulted the G-7 group of seven major industrial nations for not tackling these political questions as world leaders. "The G-7, if they ever stop making it a publicity exercise, should deal with this and address the issues," he said.