South Korea: liberal regime with an iron fist

By Bertrand Chung, Le Monde diplomatique, February 1997

Has democratisation come to a halt in South Korea? President Kim Young Sam’s authoritarian response to student demonstrations in August 1996 and new labour laws introduced at the end of the year make this an open question.

The world has been wondering whether democratisation has come to a halt in South Korea since President Kim Young Sam’s authoritarian response to the August 1996 student demonstrations and especially since new labour laws were enacted at the end of last year. True, some student leaders claim allegiance to the North Korean regime in Pyongyang, but this was no reason to shut in five thousand demonstrators at Yonsei university and then crack down violently when they wanted to disperse.

Neither did it justify the adoption of a series of labour laws and laws strengthening the powers of the intelligence services, voted in at dawn 26 December 1996 when opposition deputies were absent. This was flying in the face of the basic rules of democracy. Many citizens fear the return of the old demons, finding the measures all the more deplorable since president Kim Young Sam was one of the champions of the democratic movement against the military dictatorship.

What is the explanation for such an about-turn? With presidential elections due in December this year, president Kim Young Sam thought it essential to create a climate of security in which to seek a rapprochement with the conservative right, which has not forgiven him for the sentences passed on his two predecessors, presidents Chun Doo Hwan and Roh Tae Woo, for the Kwangju massacre and corruption. Kim Young Sam himself cannot seek a second five-year term, this being forbidden by the constitution, but it is crucial for him that someone he trusts should be elected so that his political influence can continue after he leaves office.

One of the reasons for the new labour laws, which introduce greater flexibility and make it easier to sack people and replace striking workers, is the economic crisis which the country has been facing since last year. Growth plummeted from 9.3% in 1995 to less than 7% in 1996 and is expected to drop to 5% in 1997. Compare these figures with the average growth rate of Korea’s direct competitors in the Far East (7%). In 1996 the trade deficit reached $20 billion and the foreign debt $100 billion.

The economy is thus rapidly losing its comparative edge in such variable costs as wages, property prices and interest and exchange rates. Wages are approaching those of the developed countries and factory sites are already among the most expensive in the world. Interest rates, too, are higher than in the industrialised nations. In short, if South Korea wants to be more competitive, it has no choice but to change its economic structure.

The present crisis was not unexpected. Many economists have been sounding the alarm in recent years, calling for reform of the now outmoded systems of production and management’calls that went unheeded by government and industry bosses. It was not until 9 October 1996 that the government announced an overall plan to increase competitiveness by 10% in one year. In this situation reforms were essential. But all labour laws must contain genuine guarantees against arbitrary dismissal, and these are missing from those passed on 26 December. It has been the legacy of three decades of military dictatorship and the development strategy pursued since the 1950s that South Korea still does not know how to resolve industrial disputes peacefully.

Unlike the countries of Latin America, which in the 1950s to 1970s chose to develop substitution industries, South Korea decided to go for exports. While being effective in terms of growth, this was a setback socially. On the one hand, in order to implement its economic plan the state created conglomerates or chaebols (see Laurent Carroue’s article), which were to become the heart of the future capitalist class, allied with the military elite in power. On the other hand, it maintained a cheap and docile workforce by severe repression of the trade union movement.

The other side of the coin of this rapid industrialisation was therefore an authoritarian regime and a massive rift between classes, sectors and regions. From these contradictions emerged a militant working class engaging in political struggle in alliance with the students.

For 25 years, from 1961, workers were denied any freedom of association, the right to collective bargaining and the right to strike. Although they were as much a part of the country’s economic development as their employers, they were not allowed to share in the wealth they helped to create. When the trade unions burst into life in July 1987, the trend began to be reversed. Wages increased rapidly in the years that followed, rising much faster than productivity.

Even after 1987 the state and employers made no real attempt to dispel the workers’ distrust by trying to enter into dialogue with them. Improving labour relations remains one of the major problems. The example of Japan, where in the 1930s and after the end of the second world war the labour movement was extremely violent, confirms that labour relations are not a cultural product: they are built socially.

Under Kim Young Sam’s presidency, economic power has become even more concentrated since 1993. To make them more competitive, he in fact lifted some of the restrictions that his predecessors had placed on the chaebols following their involvement in stock market and property speculation in the 1980s. The conglomerates also diversified their activities into unrelated branches at the expense of necessary specialisation and international competitiveness. The chaebols were therefore safeguarding their particular interests and their hold on society without giving society anything in return.

For a long time, under the military regime, civilian society was more or less absorbed by the bloated authoritarian state. But industrialisation and urbanisation encouraged the emergence of intellectuals, academics, churchmen, students and trade unionists sharing the common ideal of democratisation. From 1980 this civilian society became the engine of social change.

But the situation has changed. Civilian society is now increasingly dominated by the conglomerates in every field, including culture and the media. Many leaders of the one-time extra parliamentary opposition have now been absorbed by political parties, or even the state. The working class, numerically strong but divided into two hostile camps, never managed to transform itself into a political force. The student movement has been weakened by its radical ideology. And the opposition parties are no match for the powerful conservative battalions. What is cruelly lacking is a large democratic party. This absence of an opposition makes the current democratisation a fragile business’with the risk of a tragic return to confrontation and violence.

Key facts

Area: 99,020 sq. km.

Population: 44.3 million; 457 per sq. km (1996 figure).

Urbanisation rate: 80%.

Working population: agriculture 17%; industry 36%; services 47%.

Trade balance: $ -8217;1.6 billion in 1993 to $ -21.6 billion in 1996.

Per capita GDP: $10,873.