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SESSION THREE: INSTRUMENTS OF
GLOBALISATION
When: 19:00-22:00, 16 March 1999
Where: conference room in KLSI
1. We read foreign countries’ reports and discussed responses to the questions.
- The Main Items of Export and Import
(Question
from India and Australia): Main import items are raw materials such as oil and gas(from
Middle East and East Asia), machinery(mainly from Japan), agricultural foods(mainly from
USA and China), metal(mainly from Australia). Export Items are Semi-conducts, automobiles,
electronic good, machinery, steel, chemical petroleum.
- The Main Public Sector Enterprises
(Question
from India): POSCO(one of the largest steel makers in the world), Korea Telecom,
Korea Electronic Power Corporation, Korea Heavy Industry. But, they are
being threatened to be privatized by the government.
- Workers’ Feeling about IMF
(Question
from India): ‘Terrible’, ‘Invader’, ‘Imperialism’, ‘the
agent for USA and other advanced countries’, ‘liar’.
- TNCs in Korea
(Question from
Australia): Nestle is one of the largest coffee makers and it includes food
industry such as baby food. Nestle has the enterprise-level trade union affiliated to Korean
Federation of Chemical Workers’ Unions under KCTU. Nestle is
competing with Dongsuh Food which is Korean company and has the enterprise-level
trade union affiliated to the same federation with Nestle. Toshiba is also
operating here, but its economic and social influence is not strong because of the
existence of Korean domestic companies concerned.
- Wage
(Question from Australia):
wage per 1 working hour in the first half of 1998 amounted to $4.3. Total working hours
per 1 month in the third quarter of 1998 was 202 hours. Total amount of monthly wage in
the same period was 1.41 million Won(Korean currency unit; about 1200 won = 1$), which was
decreased by –8.1% compared to the third quarter of 1997.
- What to fight against the temporary/contractual hiring and
subcontracting
(Question from Pakistan): Because it is almost
impossible to effectively protect temporary/contract workers from the abuse of employers
under enterprise-level, we are trying to transform union system from enterprise-level to
industrial level in order to include and attract contract workers. For the purpose of
reducing contracting/temporary hiring, we are trying to improve the Minimum Wage System.
And, for example, the trade union of LG insurance company forced the management to
reduce and finally eliminate the temporary/contractual hiring by collective agreement.
Finally, we are trying to introduce the legislation and institutions to restrict those
hiring and subcontracting.
2) And then we read the study material and discussed "What is TNCs
and IMF/World Bank" as follows:
- In 1990s, especially after the IMF bail-out, TNCs have rapidly advanced into
Korean economy. Last year, Kim Dae-jung government was trying to introduce the Act
on Free Economic Zone for Foreign Investment, which included the articles that restrict
the basic rights of trade unions and workers, that the government offer tax credit for
foreign investors.
- The foreign TNCs have been trying to weaken Korean TNCs, in order to take over Korean
market and effectively compete with them in global economy, in support of IMF which
demanded the reform of Korean economy based on Chaebols-dominating structure. For
this reason, Korean trade union movement is being faced with the dilemma as follows: if
unions demand to reduce the Chaebols’ control, the national economy can be
dominated by the foreign TNCs. On the contrary, unless the Chaebols–dominating
economy can not be reformed, the economic inequality and social problems will not be
increasingly reduced and improved.
- Concerning the above dilemma, what is the alternative and direction of trade union
movement challenged with both of the foreign and domestic TNCs? This issue is connected
with the matter of national economy. Should we defend our national economy or not in
global economy? - unfortunately but naturally, we could not conclude about this matter.
- It can be said in general that trade unions of Korean TNCs such as Daewoo and Hyundai
of which most unions belong to KCTU camp, while Samsung has stuck to the
management strategy of "No Union" and trade unions in SK and LG
companies are not strong and active, have not much concern about overseas activities of
the Korean TNCs and the situation of local workers employed by them.
- The total amount of foreign debt of 5 biggest chaebols such as Hyundai, Samsung,
Daewoo, LG, SK was $54.2 billion as of August 1998. And the total amount of foreign
debt of Korea was $151.5 billion as of the late 1998. This heavy burden of foreign debt
was the main reason of the transition of Korean economy into IMF bail-out system.
- In the late 1997, IMF formed its liaison office in the building of the ministry
of finance and economy that plans and decides the economic policies. Since the liaison
office was formed, the Korean government has negotiated on the macro-economic policy with IMF.
3) Then we discussed Structural Adjustment Program agreed between the
Korean government and IMF, actually imposed by IMF.
The agreement between Korean government and IMF
| |
Economic growth rate |
Inflation |
Current account |
Fiscal deficit |
Foreign exchange reserves |
Third quarter of 1998 |
-4% |
9% |
+$33-35 billion |
-4% of GDP |
$ 41 billion |
Fourth quarter of 1999 |
+growth rate |
5% |
+$20 billion |
-5% of GDP |
$ 45 billion (minimum) |
- On 5th December of 1997, IMF and Korean government made an agreement
on the Structural Adjustment Program as follows: Austerity monetary measures,
restructuring of financial and bank sector, market-oriented macro economic policy,
deregulation, trade liberalization, flexibility of labor market, reduction or elimination
of governments’ intervention, opening of stock market.
- In 1998, 22,829 companies were dishonored. Unemployment rate was about 8%(1.6 million
unemployed). GDP growth rate was –5.5%(in 1997 it was 5%).
Total amount of monthly wage in the third
quarter of 1998 was 1.41 million Won (Korean currency unit; about 1200 won = 1$), which
was decreased by –8.1% compared to the third quarter of 1997. The poor became poorer and the rich did
richer (In terms of income level, first group lost 0.3% of income, 2nd group
9.9%, 3rd 9.9%, 4th 11.8%, poorest 5th group 17.2%)
4) Finally, we discussed questions for other participating countries.
- Has your country experienced the IMF bail-out or the Structural Adjustment
Program? If yes, how about it?
- How about your wage level? Satisfied or not?
- How about social safety net in your country? Stable or not?
Concerning Session 4
- When: 14:00 – 17:00, 27th March 1999
- Where: Coffee Shop with seminar room in downtown of Seoul
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