Magazine Issue 7 - Spring 1998
Globalisation on trial: The human cost of the Asian economic crisis.

The economic crisis hitting Asia has seen billions of dotlars in paper money wiped off share values. But it has also left millions of human beings without a livelihood, Sara Chamberlain reports.

As currencies collapsed and a landslide of corporations and financial institutions filed for bankruptcy in South East Asia this winter, the financial pages of the world's press bemoaned massive stock market losses. As the list of corporate failures grew, more and more print was dedicated to the billions wiped off share values. Only occasionally were the people who worked for these giant corporations mentioned... and then only in so far as they constituted a threat to proposed 'bail-out' packages and mass layoffs.

Despite the Asian Tigers' so-called 'miracle economies', most of the region's people live in abject poverty. According to the International Confederation of E0 Free Trade Unions (ICFTU), over nine hundred and fifty million people in South East Asian struggle to survive on less than a dollar a day(I). Now the majority of South East Asians are having to pay for the excesses and corruption of~the boomyears.

"My heart started beating faster when my boss invited me to lunch," recalls Chae, an assistant director of a Korean advertising agency. "After lunch he told me reluctantly that I was being dismissed. "(2) There are millions of working men and women like Chae in South East Asia. More than two million people have lost their jobs in Indonesia, while in Thailand, one million job losses are expected during the next 12 months.(3) In South Korea, 120,000 people lost their jobs in November alone.

According to the Korean Confederation of Trade Unions (KCTU), an average of more than 200 companies have shut down per day since the beginning of the crisis, with a record of 340 closures on January 5th. These closures have meant that an average of 4,000 workers per day have been driven out onto the streets as unemployed. 780,000 more jobs are expected to have been lost in South Korea between January and March 1998. (4)

The impacts of the economic crisis have not been limited to Asia. There have already been job losses in Britain as Asian companies have closed down foreign branches and reneged on investment commitments. For example in Scotland, the South Korean corporation Hyundai has indefinitely delayed investing £3 billion in two semiconductor plants. According to the Financial Times, the project had been expected to create 2000 jobs.

But at least in Britain, workers' unemployment benefits and compensation rights are to some extent protected. In South East Asia, many working people "will not be compensated for the loss of their jobs, are not protected by social security systems and are not being informed or consulted about what is happening to their futures," says the ICTFU.(5)

Asian unions, with the assistance of the ICTFU and ILO, are now fighting tooth and nail to ensure that while their goviemments negotiate with the International Monetary Fund (IMF) for multi-billion dollar loans, they remember the welfare of working men and women.

Yet despite the advocacy of international trade union organisations, in South Korea the KCTU has already been forced to accept legislation that will allow management to dismiss workers en masse for operational reasons, in exchange for unemployment insurance, legalisation of a national teachers union, and the right of unions to participate in politics.(6)

The financial restructuring that many South East Asian governments must undertake if they are to receive any money from the IMF involves cuts in public expenditures, tax increases, and other 'austerity measures'.

The International Federation of Commercial, Clinical, Professional and Technical Employees (FIET) fears that this sort of 'belt-tightening'- when wages are falling, and unemployment and basic commodity prices rising, "will have significant social consequences".(7) "Working people in South East Asia are angry and resentful that they are having to pay the heaviest price for the incompetence and corruption of a few very wealthy individuals and their international backers," says the ICF[U. "There is a crisis of confidence in globalisation and the national and - international institutions that shoul& have prevented the events of the last five months."(5) The ICFTU expects "social tensions to mount as dismissals and pay cuts multiply over the coming months. "(9)

In January, 3000 Thai workers clashed violently with the police because their end of year bonuses were abolished due to the crisis. In Indonesia, where independent trade unions are banned and the aimy says it will use force to stifle any revolt, "violence is more than likely" warns Muchtar Buchori, former director of the Institute of Science. 10)

The KCTU and ICTFU agree that confidence will not be restored until "fundamental reforms are made to ensure democratic accountability and transparency of both the international financial system and national institutions for the regulation of financial markets... Only then will the priorities of fighting unemployment and poverty have their rightful place before the protection of the interests of multinational companies and the fortunes of the narrow elite who have reaped the benefit of trade and financial liberalisation.[11]

In an attempt to productively hamess the anger and frustration of South Asia's recently unemployed, the ICFTU's Asian and Pacific regional organisation (APRO) held a 'Forum on the Asian Economic Turmoil' in Singapore in February. Delegates from international trade unions, the ILO and even the World Bank and IMF attended. The statement adopted at the Forum calls for the payment of due wages and severance pay; the protection of viable jobs; company level negotiations on social plans to accompany financial restructuring; the implementation of social programmes to support the incomes of the unemployed, help them find new jobs and invest in training and retraining; labour intensive public works programmes; the development of social security systems to ensure that workers have adequate pensions in retirement, and unemployment, injury and sickness benefits, and to fund healthcare; a special focus on the impact of the crisis on women workers; and the review of labour laws and practices that hamper the organisation of free and representative trade unions.

1 Globalisation on Trial: The Trade Unions Response to the Asian Economic and Firiancial Crisis, ICFTU, December 1997\
2 The social crisis behind the financial crisis, ICFTU online, February 1998\
3 Unbridled Freedom to Sack Workers is No Solution At All, Korean Confederation ofTrade Unions, January, 1998
4 Globalisation on Trial: The Trade Union Response to the Asian Economic and Financial Crisis, ICF'l'U, December 1997
5 Intemational Herald Tribune, February 7-1998
6 FIET magazine, 1997
7 Unbridled Freedom to Sack Workers is No Solution At All, Korean Confederation of Trade Unions, January, 1998