Date: Fri, 6 Jun 97 15:03:33 CDT
From: rich%pencil.BITNET@pucc.PRINCETON.EDU (Rich Winkel)
Subject: Thai Economic Slowdown Heats Up Labor Struggles
/** 428.0 **/
** Topic: Thai Slowdown Heats Up Labr Struggles **
** Written 4:51 PM Jun 4, 1997 by labornews in **
From: Institute for Global Communications <>
Subject: Thai Slowdown Heats Up Labr Struggles
/* ---------- "THAILAND-LABOUR: Economic Slowdown" ---------- */
Copyright 1997 InterPress Service, all rights reserved.
Worldwide distribution via the APC networks.

Economic Slowdown Brings Labour Tension

By Teena Amrit Gill, InterPress Service.
1 June, 1997

BANGKOK, Jun 1 (IPS) - Thailand's current reversal of economic fortunes is fueling violent tension between workers and employers, threatening to disrupt an industrial scene once viewed as the most peaceful in South-east Asia.

After a decade of non-stop growth, the Thai economy's downturn has seen thousands of workers laid off and many companies declared bankrupt. Fresh employment has dried up since early last year. But in the absence of a strong trade union movement and adequate trust between management, government and employees, Thai labour experts fear that working class frustrations could easily boil over into violence at its factory sites.

Last year Thailand recorded its lowest level of export growth - a mere 0.3 percent compared to 23 percent in 1995. Likewise, GDP growth rate dropped to 6.8 percent after standing at more than eight percent every year since 1986.

A Thai Farmers Bank Research report for the first nine months of 1996 says 66 companies laid off more than 4,467 white collar employees. Job losses in labour-intensive industries that power Thailand's export engine, like garments, footwear, jewelry and processed foods, are estimated to be far higher.

One indication of the level of tensions prevailing in large industrial estates around Bangkok came late May, when in the management of large Japanese corporations like Sanyo, Honda and TDK petitioned the labour ministry to re-examine labour policies. Worried by a spurt in union activities at their production sites, the companies claimed in a letter to the ministry: ''We are not against the setting up of unions, but the labour ministry must make sure that they strictly abide by the law. Without close control, disputes may get out of hand.''

Under Thai law, workers can go on strike only after going through negotiations with employers. But workers at some firms have gone ahead even without such talks, Japanese executives say.

Japanese investors in Thailand, who account for nearly 70 percent of all its foreign direct investment, are upset over violent incidents involving employees last year at the Sanyo Universal Electric's and Suzuki Motors' factories. On December 17, a mob of 2,000 workers set fire to the Sanyo Electric Co. headquarters here over disputed bonus payments.

The incident sent shockwaves through the Thai government and media and dented the confidence of foreign investors, especially those in Japan where the incident was portrayed as the end of peaceful labour relations in Thailand.

Three months before the Sanyo incident, employees at the Japanese- owned Thai Suzuki Motors' motorcycle factory outside Bangkok locked management officials inside factory premises for several days.

After one of the most violent strikes in recent Thai history, the strikers were dispersed by police commandos.

Labour experts argue that though there has been an increase in violent incidents and strikes and labour agitation, most have been spontaneous outbursts by disorganised, dissatisfied workers.

''The real problem according to them is not too much union activity as wrongly claimed by company managements, but too little,'' says Voravidh Charoenlert, labour economist at Bangkok's Chulalongkorn University.

He says Thailand's rate of unionisation remains one of the lowest in the world. Even in the industrial sector, only 1.7 percent of 16 million workers are organised. The situation is even more dismal in the agricultural sector, which employs over 17 million people. But even the small number of unionised workers does not have a single voice, due to the proliferation of labour federations that have only undermined their cohesion.

The Ministry of Labour and Social Welfare says there were 19 labour federations and eight labor union councils by the end of 1995. The weakness of the union movement naturally translates into weaker bargaining power and poorer representation for workers in decision-making organisations.

Since the mid-70s, a tripartite body consisting of government, employer and labour representatives has been active in settling disputes through dialogue, but many workers find this inadequate. Many workers distrust government representatives, who they find too biased in favour of management, and the same accusation also is levelled against Thai labour courts, where disputes go for final arbitration.

There are about 20,000 cases in labour courts every year. Workers are losing faith in judicial institutions not only due to the slow pace of case resolution, but due to a perception that the quality of judgements is very poor.

Workers are also upset over a June 1996 decision by the Cabinet to legalise the stay of thousands of Burmese, Cambodian and Laotian illegal migrants under the pretext of easing a ''shortage of labour'' in the construction, fishing, mining and agricultural sectors.

The move came after lobbying by business groups that complained Thai workers were ''too costly''. They argued that high wages were hurting the competitiveness of Thai exports against those from China, Vietnam, India and eastern Europe.

Thai trade unions, however, said the influx of large numbers of migrant workers would depress wages in all sectors of industry. Several labour economists warn that perpetuating the Thai industry's dependence on low-cost labour is a disincentive for it to invest in training workers for higher skilled jobs needed for the economy to mature from a labour-intensive one.

More ominously, they warn that rising frustrations of local workers could at some point lead to violent clashes with their employers, especially foreign ones. At a May Day rally, unions defied the ''rising wages of labour'' argument by demanding a 20 baht (80 U.S. cents) rise in the minimum wage of 157 baht per day (6.28 dollars).

''True, the economy is slowing down. But employees still have to survive inflation amid growing costs of living,'' said Panit Chaorenphao, president of the Thai Trade Union Congress.

Union leaders say minimum wages should rise by at least 5.9 percent -- last year's inflation rate -- to keep real wages constant. But given their poor organisational and political clout, unions are unlikely to get their demand.

''The union movement is also too divided and it has become impossible for them to call a strike for increase in salaries as they used to earlier,'' says a senior trade union adviser. In ailing sectors like textiles, workers are willing to accept salary cuts to maintain their jobs.

In the absence of sufficient union pressure, the Thai government may have become too complacent about the social consequences of more and more workers becoming jobless.

''Thai bureaucrats and politicians have no clear policy on how to tackle labour issues in the changing economic situation, and there are no mechanisms in place to prevent labour-related conflicts in future. That is a worrying sign,'' said Voravidh.


[c] 1997, InterPress Third World News Agency (IPS) All rights reserved

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