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US House Banking and Financial Services Committee holds hearing on recent financial instability in Asia

act.indoneisa - November 13, 1997

Bernie Sanders' (I-VT) opening statement:

Thank you very much, Mr. Chairman. I'm also delighted to welcome Mr. Greenspan and Mr. Summers here today to talk about the economic crisis in Asia and the Indonesian bailout, which includes a $10 billion loan from the IMF, a $3.5 billion loan from the World Bank, and a $3 billion contingency loan underwritten by the taxpayers of the United States.

Mr. Chairman, I have one slight problem with this bailout. It's illegal, and I intend to do all that I can to stop it. Now, let me read directly from the law commonly known as the Sanders-Frank Amendment, or maybe Mr. Frank thinks it's the Frank-Sanders Amendment. Nonetheless, it is the law.

And it was enacted by Congress in the spring of 1994, coming out of this committee. Mr. Summers, this is the law. One. A, the secretary of the Treasury shall direct the United States executive directors of the international financial institutions to use the voice and vote of the United States to urge the respective institution, one – please listen closely – to adopt policies to encourage borrowing countries; i.e., like Indonesia, to guarantee – guarantee – internationally recognized worker rights and to include the status of such rights as an integral part of the institution's policy dialogue with each borrowing country.

Two, in developing the policies referred to in paragraph one, to use the relevant conventions of the international labor organizations – which have set forth among other things the right of association, the right to organize and bargain collectively, a prohibition on the use of forced or compulsory labor, and certain minimum labor standards that take into account, et cetera, et cetera.

In plain English – now off the law; now we're back to English – in plain English, what this means is that the United States government cannot support any IMF or World Bank loans to Indonesia unless the loan proposal guarantees internationally recognized worker rights.

Mr. Chairman, I have before me the proposal of the Indonesian military dictatorship led by General Suharto, which details the policies they are proposing in order to obtain these loans. I have read this proposal carefully. And I have not found one word in it – not one word in it – which suggests that they will adopt policies guaranteeing internationally recognized worker rights.

Further, as the law very clearly requires, they do not include the status of such rights as an integral part of the institution's policy dialogue. Therefore, plain and simple, it is against the law for the United States and the secretary of treasury to support this bailout and I hope that they will desist immediately from doing so.

Mr. Chairman, almost nobody except total apologists for the Indonesian government disputes that Indonesia is an authoritarian society and that workers there do not enjoy internationally recognized workers' rights.

Now, I can quote you forever, but let me be very brief.

Let me quote from the United States department's – United States State Department's annual human rights for report for 1996, and I would hope that the Department of Treasury occasionally talks to the Department of State.

And this is what the State Department says, quote: "Despite a surface adherence to democratic forms, the Indonesian political system remains strongly authoritarian. The government is dominated by an elite comprised of President Suharto, his close associates and the military."

And on and on it goes. The State Department tells us that there are – it is not a democratic society and that workers' rights do not exist. I won't read it all. I will submit that for the record.

Further, let me quote from the Dickinson School of Law in Carlisle, Pennsylvania, which on June 2nd, 1997, awarded a special rule of law citation in absentia to Muchtar Pakpahan, an Indonesian lawyer who has risked his life and sacrificed his freedom for democratic ideals.

And what they say in the Dickinson School of Law is that you have a courageous man fighting for the rights of workers in that country who is now rotting in jail in a totally propped up charge.

And now let me quote from this – from a statement of the AFL-CIO executive council, February 19th, in awarding Muchtar Pakpahan the George Meany Human Rights Award. Quote – "The heavy-handed campaign against Brother Pakpahan and his union, culminating in the show trial now being held in Jakarta, has made a mockery of the rule of law in Indonesia and any pretense that the Indonesian government has any respect for internationally recognized worker rights."

And the AFL-CIO executive committee quite rightly suggests that the United States government vote against all projects submitted by Indonesia to multinational – multilateral development and investment institutions.

Now let me conclude my remarks, Mr. Chairman, by saying the following. Even if this bailout was legal – and it is not legal – I would oppose it.

Not only is it morally wrong for the United States to provide political and economic support for an illegitimate, authoritarian government such as the Suharto regime, but it is totally absurd.

It is an outrage that the taxpayers of this country are forced to bail out a family which Forbes magazine claims is one of the richest families in the world.

They estimate that General Suharto alone – alone – is worth $16 billion.

His family is worth $30 billion. And you take 50 more of their allies, they're worth $60 billion.

And I would like Mr. Summers to tell the taxpayers of the state of Vermont, whose real incomes are in decline, why they should have to bail out a group of people worth $60 billion. If they need the money so much, let them pay for their own bail out and not ask the taxpayers and the working people of this country.

So I would hope – and I'm going to persist on this issue. You're disobeying the law, and what you're doing is wrong, and I hope you don't go forward.