It has conditioned its loans on the willingness of these nations to do things like increasing domestic interest rates and reducing public spending, or quickly deregulating various state-run enterprises. The avowed reason for insisting upon these steps is to convince global lenders and investors to remain in these nations rather than abandon ship. But these austere measures have had perilous social consequences they have driven up unemployment rates and shredded social safety nets. Thousands of people have been murdered in Indonesian riots. Workers have gone on strike in South Korea.
Labor unrest threatens much of the East Asian region.
If the crisis continues or deepens, democracy itself may be threatened, in East Asia as well as in the precarious democracy of Russia. The managing director of the IMF is Michel Camdessus , age 65, who began his third five-year term in January 1997. Before his appointment, Camdessus was governor of the Bank of France. Camdessus s first managing director is Stanley Fischer , age 55, who until his appointment was a professor of economics at the Massachusetts Institute of Technology. Twice in the last four years, Treasury officials have directly intervened in world currency markets.