[Congressional Record Volume 144, Number 76 (Friday, June 12, 1998)]
[Senate]
[Pages S6291-S6292]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         ASIAN ECONOMIC CRISIS

  Mr. HAGEL. Mr. President, I want to take this body on a quick trip to 
the other part of the world to talk very briefly about what is 
happening in Southeast Asia, Japan, China, Russia, and how it is 
impacting and affecting all of us in this country, how it will affect 
the geopolitical economic dynamics the rest of this year and on into 
the next year and, actually, on into the next century.
  We start at Southeast Asia where the Asian crisis has become a 
significant crisis, stretching past that region of the world, now up 
into Japan, where we find in Japan that its economic planning agency 
confirmed that Japan is now in a serious recession. Last quarter, Japan 
found that its economy fell by an annualized rate of 5.3 percent. The 
yen is at an 8-year low against the dollar. The yen has dropped 50 
percent in 3 years. The Japanese find themselves essentially without a 
credible banking system.
  The President of South Korea was here this week addressing a joint 
meeting of Congress. Some of us had an opportunity to meet with him 
privately to talk about South Korea, what it is going to take to build 
South Korea back--infrastructure reconstruction, currency 
reconstruction, investment reconstruction.
  Let's go further around that loop of the world to Russia. I spent 
some time yesterday with the Russian Ambassador to the United States. 
The two of us spoke for more than an hour alone. Russia has immense 
economic problems, and when Russia has immense economic problems and 
Japan has immense economic problems, as does South Korea, Southeast 
Asia, that spills over on to all of us.
  China announced yesterday that it may have to devalue its currency. I 
was in China in December and met with the Premier. At that time, he 
assured me--and Senator Chafee from Rhode Island was with me--that 
under no circumstances would China devalue its currency, and that has 
been China's position all along. But the dynamics of the economic 
impact and the consequences of the Southeast Asian crisis have become 
so severe that it is now taking a rather significant toll on all those 
nations, including China, Japan, and Russia.
  Our markets yesterday in the United States went down 160 points. The 
Dow Jones dropped yesterday, and as of this hour, our market in New 
York is down well over 100 points.
  What does this tell us? If we listen to farmers and ranchers, as I do 
in Nebraska, and exporters and people who understand the realities and 
the importance of exports and the fact that economies are linked and 
stability is linked to economies and to economic growth, security is 
part of that and confidence underpins all of that.
  When nations and investors lose confidence in markets, they are 
sending a very direct signal to all of us. They are saying clearly, 
plainly, ``Something's wrong.'' We must understand that even though 
this is a half a world away, it is impacting us today all over this 
country, and it will continue to very severely impact our growth, our 
economy, our opportunities, and our markets. And as this economic 
instability and unrest continues to unfold and deepen and widen, it 
will require a longer time and more resources and more investment and 
more attention and more leadership to put it back together.
  I am very concerned, Mr. President, that this Congress is not paying 
enough attention to what is going on around the world. I am concerned 
that we are not linking it, we are not interconnecting the dots. I find 
it remarkable that on this floor, the floor of the U.S. Senate, the 
last few weeks we have been consumed with billions of dollars of new 
taxes, building a larger Government, when essentially half of the world 
is burning.
  I hope that our colleagues in the House take a rather serious look at 
what is going on around the world. I strongly recommend to our friends 
and colleagues in the House that they start with looking at the IMF. 
The IMF is not, cannot be, will not be, should not be, never was 
intended to be, the rescuer of all economies and all problems. But if 
we in this Congress continue to turn our backs on what is going on 
around the world, we will pay a high price.
  We are paying a high price now. When you ask any farmer or rancher or 
exporter--not just in the Midwest, not just in my State of Nebraska, 
but all over the country--whether this is affecting them, we will pay a 
high price when it comes to military issues, strategic issues, as 
Secretary of Defense Bill Cohen warned earlier this year, as Secretary 
of State Madeleine Albright has warned earlier this year. Chairman 
Greenspan talked about it this week. Secretary of Treasury Rubin talked 
about it this week. We are playing a very dangerous game here. And the 
longer we lock up, the longer we lock up important decisions on IMF, 
and other issues that we should be tending to and focusing on, the more 
dangerous this world becomes.
  I hope my friends in the House are going to unlock this debate on IMF 
and allow this IMF debate to come to the floor of the House for an 
honest, open debate, and a vote. There has been a lot of misinformation 
spread around about IMF--what it does, what it does not do.
  I recall specifically, Mr. President, in our meeting with President 
Kim, the President of South Korea, he brought up IMF and he said this: 
``I don't like a lot of what IMF is forcing us to do, but without IMF 
we wouldn't do it. And if we didn't do it, we would have a complete 
breakdown of all financial discipline, and there would be some question 
as to whether we could dig ourselves out of where we are.''
  I say these things knowing full well that these are complex, 
complicated issues. And there is not one answer to these. But surely, 
cumulatively, all of the pieces must come together, like the United 
States stepping up to its world responsibilities. And the IMF is one of 
those. And at the same time, Mr. President, this body, committees in 
this body will be debating--have been debating--more sanctions on 
nations. We are imposing more sanctions on countries today than we ever 
have in the history of America.
  We cannot do much about the sanctions that the President was forced 
to impose on India and Pakistan. That is law. Do we really believe, for 
example, that that helps the situation by pushing India and Pakistan 
further away, and in Pakistan's case, in particular, grinding them down 
further and further into economic despair? Does that really improve the 
possibility that we are going to be able to resolve some of these 
issues--deadly, deadly issues--to continually isolate some of these 
countries, but, more importantly, isolating ourselves by sanctions? I 
do not think so. There is talk about more sanctions for China.
  I hope we get very serious about this, Mr. President, and understand 
the consequences of what is happening around the world.
  Confidence, courage, leadership, doing the right thing, making the 
tough choices--that is what makes the difference; always has made the 
difference. Imperfect possibilities? Imperfect choices? Absolutely. But 
we must make some choices. We must lead, just like Bosnia, just like 
Kosovo--bad choices all. But the longer we let, for example, Kosovo go 
without making any decisions, without making any choices, we run a 
terrible risk of great conflagration in that area.

[[Page S6292]]

  I am grateful for an opportunity to share some of my thoughts on 
these issues because they are real, they are not theoretical. They 
impact our Nation, the world, our opportunities, and the future. We 
make decisions today, not to deal with problems today, we make 
decisions today to deal with problems tomorrow. The future is connected 
to our leadership, and we must act.
  I yield the floor, and I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. HAGEL. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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