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Asia's road to recovery leaves many on the wayside (IV)
Throughout the world, new economic, political and social challenges are emerging for 2001 against a backdrop of constant and therefore unpredictable human change. This year, the ICFTU has again attempted to draft an overview of these questions with the help of a network of regional journalists. This prospective analysis is in four parts: Asia, Latin America, Europe and Africa. Special attention will be paid to Asia which economic analysts insist is on the path to recovery. Reports, from Thailand and South Korea in particular, are dampening such excessive enthusiasm.
In Thailand only the employers have left the Asian crisis behind (By Samuel Grumiau)
Brussels December 19 2000 (ICFTU OnLine): Thai workers have been the main victims of the financial crisis that hit their country in 1997. At a time when the economic indicators are back on an upward trend, the poorest people are still down and out. A report.
Exports have risen by 30% within the space of a year, interest rates are low, and domestic consumption is recovering. Thai business circles are not yet rejoicing, but the atmosphere is good and many investors believe that the worst is behind them. On the other hand, the workers are less optimistic: while the country's GDP perked up in 1999, wages are not rising and no significant upturn is within sight on the employment market. "There were 2.6 million unemployed in 1997 when the crisis began, and now we have more than 3 million", said Junya Yimprasert of Thai Labour Campaign (1). The construction and clothing sectors have fired workers en masse. Owing to the banks' lack of cash flow, loans are now harder to come by, and all those SMEs in the textile and clothing industries that lacked a firm financial footing have disappeared. Another trend exacerbated by the crisis is outsourcing, especially in the textile sector: whereas the volume of orders has not decreased, the factories have used the crisis as a pretext to lay off large numbers of workers and outsource their production to workshops in the informal sector."
While the minimum wage rose each year in the decade preceding the economic crisis, it was frozen in 1998, to the deep dissatisfaction of the trade unions. One of the reasons for freezing it lay in the pressure exerted by the international financial institutions: "The International Monetary Fund (IMF) and the Asian Development Bank (ABD) made their aid conditional on wages being maintained at their present level", lamented Lae Dilokvidhyarat, who teaches at the Faculty of Economics at the University of Chulalongkorn (Bangkok). "The minimum wage is 162 baht (roughly $3.5 dollars) in Bangkok and the five provinces surrounding it, 140 baht in the other major cities and 130 baht elsewhere. Everyone knows that this is not be sufficient to cover the expenditure of a medium-sized household ". In actual fact, this average wage is calculated on the basis of the needs of a single worker, without taking into account the possibility that he might have a family to support!"
Making the same mistake ...
As in many other countries, Thai NGOs and trade unions are cursing the ultraliberal measures imposed by the international financial institutions in exchange for their aid. As Lae Dilokvidhyarat put it: "The IMF and ADB claim there is a need to boost the competitiveness of the workforce by limiting increases in the minimum wage. It is like an ideology: since the 1960s, the Thai government has believed that the only way to compete with its neighbours and attract foreign investors is to have cheap labour. But there are two sides to competitiveness: low wages and high productivity. The government has never paid attention to the latter aspect, it has hardly invested at all in training for workers, especially at the lowest levels. Accordingly, 80% of the Thai workforce has not got beyond primary school, especially since the parents in question have not been in a position to finance more advanced studies". The minimum wage in Thailand is already higher than the wage paid by its rivals on the market for the production of merchandise with little value added. And since Thailand does not have sufficient numbers of skilled workers, in the short term it has no way of striving to gear its economy more towards high-value production. Thus, the workers are falling victim to a lack of far-sightedness shown by their employers and the country's leaders: instead of investing in training staff during years of prosperity, they forced down wages to keep their sacrosanct competitiveness intact. Now they are waking up to the fact that they need highly qualified workers (see the article entitled "The brains race" on page 16), but there is no money left to pay for training!
Educational reform is essential if Thailand intends to enter a new stage in its development. Apart from its inadequate numbers of highly-skilled workers, the problem arises as to the way in which students are trained: some foreign investors complain about the lack of initiative shown by newly qualified students, who may be excellent academically, but hang too much on the orders of their bosses. "Perhaps this is because our school system developed along the lines of teaching dispensed by temples, where the young monks learn the principles of Buddhism without questioning anything", explains Professor Dilokvidhyarat. Today, with the important moral backing of the King, teaching methods are being reformed, though it will be years before the process of reform has been completed.
Privatise to help the banks?
Another measure called for by the international financial institutions is the privatisation of public-sector companies, a process that has been under way for years in Thailand. The local trade unions are rightly worried about how the sacrifices made by the workers are used. Somsak Kosaisook, the President of the National Railway Union, said: "Under pressure from the IMF, the government would like to privatise public-sector companies and use the money thus earned to secure the debts notched up during the crisis. However, 80% of these debts are private, coming from loans not repaid to the banks". These are the infamous loans awarded by bankers to rather unreliable investors which contributed towards the financial crisis back in 1997. "It is unfair to use public funding to help the rich," complained Mit Charoenwal, the General Secretary of the union of public-sector telephony workers; "instead it should be used to safeguard workers' jobs in the context of the privatisation process". But there is one positive note in the public enterprise sector: trade union training, which had been banned since the coup that rocked Thailand in 1991, was once again authorised this year. But what about private companies?
Enforcing labour legislation is one of the main problems faced by salaried workers in Thailand. For instance, between 30 and 40% of workers employed in the official sector are not even paid the legal minimum wage. In the private sector, there are no unions in the vast majority of firms and the workers are therefore not aware of their rights, especially since the government does nothing to promote these rights. In addition, with a ratio of one labour inspector per 1,000 companies, the pressure brought to bear on the employers by the public authorities is not very credible. "One survey showed that between 1994 and 1998, 54% of employers were breaking the law on safety in the workplace, whereas less than 1% of them were taken to court for it," remarks Bundit Thanachaisethavut, a researcher who specialises in labour-related issues at the Arom Pongpangan Foundation. "What is more, the fines imposed on those violating the law are so minute that they do not deter the guilty parties from re-offending".
Overtime or the sack ...
The financial crisis resulted in some paradoxical situations. For example, at a time when hundreds of thousands of Thai workers are seeking stable employment, millions of others are being forced to work overtime to meet their daily production quotas, which also prevents them from attending union meetings organised in the evening. So the employers benefit all round... "Under Thai labour legislation employers are prohibited from asking their employees to work overtime if they do not want to, but in reality they threaten them by saying they will soon lose their job if they do not agree to work overtime", says Bundit Thanachaisethavut (see the boxed text on Adidas). The economic turmoil has also served as an excuse for employers who wanted to fire staff without paying the legally required redundancy compensation. During the crisis hardly any enquiries were carried out to ascertain whether companies really were facing a cash-flow problem. This created a tragic situation for those people who were laid off, because they could not fall back on any unemployment benefit to survive. Many of the workers fired in this way were trade union activists.
Thai workers' organisations have not often had a say in the major decisions that have rocked their country since the crisis began. One of the reasons for their weakness is that they are so divided: although barely 2% of the workforce is unionised, there are some 1,000 trade unions gathered together in 9 national centres. "This is the result of a government and employers' strategy bent on weakening the trade union movement," says Pratueng Saengsank, the President of the LCT (Labour Congress of Thailand), an ICFTU affiliate: "In 1989 there were just four national centres, but since then several new ones have been set up by capitalist concerns and the government. The latter centres do not pursue the same aims as the others at all". Labour-related problems, which are not very popular with the press or amongst the general public, are not of great interest to politicians. "Business interests are financing the political parties," explained Junya Yimprasert. "What is more, large numbers of workers in Bangkok come from regions located hundreds of kilometres away, are still registered as living there and so that is where they are on the electoral rolls. As they lack the means to make the journey solely to vote, no politician takes their problems seriously. They should really be able to vote in the place where they work, but the system is unlikely to change because that would force politicians to take an interest in labour issues".
(1) A movement that sets out to enhance solidarity between Thai workers and the international labour movement.
Boxe
Working for Adidas is no game ... A Thai woman working in a company that subcontracts the manufacture of sportswear highlights the unbearable strain put on the workforce by its bosses. In the interests of keeping her job, she insisted on remaining anonymous. "We are paid according to the quotas our production line manages to achieve. The daily wage is fairly high for this kind of job, the going rate being 251 baht (roughly 5$), but we cannot be content with that: the managers pressure us to work between one and three-and-a-half hours of overtime every day. They play on rivalries between their workers, and humiliate those who are slightly slower by comparing their production with that of their faster colleagues. Some of us are so afraid of not reaching our daily target that we do not even dare to take time off to go to the toilet - and as a result we develop urinary tract infections! We only take the half-hour meal break that is allotted to us. many of us also suffer from hypertension. The employers keep harping on about how demanding Adidas is when it comes to quality and how its clients complain when something is wrong, so they emphasise that we have to work very hard if we want to keep them as a client. Where overtime is concerned, admittedly we are well paid compared to other Thai workers, but we would prefer to earn just 251 baht and not have to work so hard. Some female workers end up quitting because the pressure is too great, but every day there are between 100 and 200 people queuing up in front of the factory asking for a job".