Date: Fri, 9 Jan 98 08:57:35 CST
From: rich@pencil.CC.WAYNE.EDU (Rich Winkel)
Subject: No "Social Net" For Asian Workers
/** headlines: 126.0 **/
** Topic: No "Social Net" For Asian Workers **
** Written 12:00 PM Jan 8, 1998 by labornet in cdp:headlines **
/* Written 9:50 AM Jan 3, 1998 by firstname.lastname@example.org in labr.asia */
/* ---------- "No "Social Net" For Asian Workers" ---------- */
/* ---------- "LABOUR-ASIA: Crisis Promises More P" ---------- */
Copyright 1997 InterPress Service, all rights reserved.
Worldwide distribution via the APC networks.
Crisis Promises More Pain for Workers
By Prangtip Daorueng, IPS
26 December 1998
BANGKOK, Dec 26 (IPS) - Workers across East Asia, many of them
used to decades of job security, face increasingly uncertain times
as the region's economic slowdown threatens to throw more
labourers out of work in the coming months.
From South Korea to Indonesia, the employment picture is
expected to turn hazy in the coming year as huge financial firms
go under, businesses are unable to expand, public spending is cut
and growth figures are slashed.
Sung Bhoyun of the Korean Workers' Centre says many Koreans are
not used to facing the possibility of having no work. "This is
the first experience for our generation," Sung said.
"We used to have very good living conditions - better
situation than our parents. They kept telling us that we are the
spoiled generation," Sung said at the 24th World Confederation of
Labour (WCL) Congress here earlier this month.
While official estimates say the percentage of unemployed
workers in Korea next year should be seven to eight, but Kim Dong
Ho, also of the Korean Workers' Centre, says unions see the figure
Major conglomerates or chaebols are implementing salary freezes
and layoffs that in some cases involve 30 percent of employees.
Other firms are cutting pay as much as 30 percent, believing they
are a better than outright unemployment in a country where being
jobless is often viewed as shameful.
South Korea's activist labour unions are already restive, and
have been demanding that the government revise stiff conditions
required by the International Monetary Fund (IMF), which led a 57
billion U.S. dollar bailout of the financially troubled economy in
In exchange for the funds, the Fund has required the South
Korean government to keep growth below five percent, slash the
current account deficit to one percent of GDP from almost three
percent, keep a balanced budget and raise taxes.
"We are expecting that many people will lose their jobs. It
was really sudden and we hadn't prepared for this situation. Since
the IMF is there, it is not going to give us money without any
condition. So we are expecting a lot of requirements," said Sung.
Thai workers are also hurting from the financial meltdown that
struck the country this year, resulting in the collapse of scores
of financial houses and closure of factories. Thai economists say
one to four million people, mostly in urban areas, are expected to
become unemployed over the next year.
Thailand's closure of 56 financial firms this month threw
11,000 workers out of work, and analysts say up to 200,000 finance
employees could be jobless after the restructuring of the sector
Hundreds of thousands of Indonesians are also expected to lose
their jobs in the next few months, even as prices of basic items
like food are rising.
"The recent economic downturn, in particular in South-east
Asia, has raised grave concerns over high unemployment," the
International Labour Organisation (ILO) said in a statement
during its Asian regional meeting here in mid-December.
In the case of Thailand, labour and social welfare officials
say the government is supporting the return of unemployed workers
to their hometowns or villages to ease urban joblessness.
While Asia's problems are directly tied to labour uncertainty
and restlessness expected in the next few years, some labour
leaders say the crisis has also highlighted the risks that come
with the opening of economies and the need for ways of protecting
Indeed, globalisation as well the role of the IMF in bailing
out troubled Asian economies came under strong criticism at the
World Confederation of Labour Congress.
"Globalisation is a kind of unavoidable situation. I think it
is bound to happen. It is happening in one direction from top to
bottom, from western countries to developing countries. There will
be some sacrifice. We have to pay some price, especially the union
movement," said Korea's Kim Dong Ho.
But IMF managing director Michel Camdessus, who was invited to
the congress, said the Fund was not creating economic problems for
Asian countries but that many of them had been adopting wrong
policies ill-suited to a global economy. "We are not discouraged
as the results show we are on the right way," he said.
"People are treating the IMF as a scapegoat for their
problems. But the fact is we now have global economy and each year
it is becoming more so. This is not a new process, but has been
developing over these past 50 years," Camdessus said. And despite
Asia's problems, over the years "the results we see are better
growth rates everywhere and higher standard of living," added.
The crisis in Asia now is a problem of mismanagement rather
than of globalisation itself, Camdessus said. According to him,
despite rapid growth many countries did not spread wealth to the
poorer sectors, resulting in bigger gaps between the rich and
poor. The IMF believes that corruption, state monopolies, business
oligarchies and vested interests are obstacles to globalisation.
But critics argue that what may make economic sense does not
always benefit workers. While economies are advised to open up and
be globally competitive to attract investments that create jobs,
labour standards have not always been set up or respected.
At its regional meeting, the ILO said international standards
have become even more relevant "in today's climate of
globalisation, trade liberalisation and economic uncertainty".
In a paper at the conference, it said: "Workers are particularly
vulnerable in times of labour contraction and industrial
Experts at the World Confederation of Labour Congress pointed
out that there were no substantial social welfare programmes to
help jobless workers. In fact, many said workers in Asia largely
have to bear the costs of globalisation of their economies alone,
and that the presence of the IMF is not the answer.
Even without the economic crisis, many Asian countries were
seeing a fall in the number of full-time jobs and a rise in
temporary, casual or subcontracted work that often falls outside
legal regulation. In the competition for foreign investment, some
countries have poor working conditions and pay.
Former WCL president Willy Peirens says many economies' free
trade zones with unequal tax levies, low salaries and poor
workers' standards, the growing informal sector and increasing
number of migrant workers, are prime indicators of the problems
within the globalisation process.
Asia's economic slowdown is bound to make things harder because
globalisation, in the eyes of trade unions, has meant " weaker
negotiating capacity and constant degradation of working
conditions", at a time when there should be even more dialogue.
"It is our understanding that within the IMF some reforms have
already taken place and we want to see that continue. For
instance, the WCL wants to see structured consultations between
the unions and the IMF. Also national unions have to be consulted
in the process of elaborating programmes of structural
adjustment," Peirens said.
[c] 1997, InterPress Third World News Agency (IPS)
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