Please contact us if you would like to receive DAGAinfo via eMail

DAGAinfo

20 November 1999
No. 95

 

In this issue:

  1. FEATURE
    ASIAN ECONOMIC JUSTICE BEYOND 2000
  2. NEWS in Brief
    Bangladesh: Global Campaign for Education
    North Korea - North Korea trapped in vicious circle of poor nutrition
    Hong Kong: HK TOY Coalition Campaigns for compensation to victims of Zili fire
    East Timor: International Aid Workers struggle to rescue refugees
  3. RESOURCES Received
  4. Urgent APPEALS
    HONDA WORKERS PROTEST DISCIPLINARY ACTIONS
  5. ANNOUNCEMENT

 

1. FEATURE - top

 

ASIAN ECONOMIC JUSTICE BEYOND 2000

By Marissa de Guzman and Walden Bello

 

If we rely on the news these days, we will get the impression that Asia is on the rebound and on the fast track to recovery. Experts say that the worst is definitely over. Almost every Asian country is registering positive or respectable growth rates thereby attracting foreign capital and investments once more. We have apparently gained foreign investors' confidence once again.

But amidst all the hurrah and cheers for a great recovery work, we have to wonder whether the professed upshot is reliable. Is this recovery real? Beyond the headlines, what is actually happening especially at the mass-base or at the grassroots level? Until the first half of this year, a lot of people were pleased with the growing strength generated by Asian countries in their trek towards recovery. But in the middle of September, the Thai baht spiraled again, bringing down with it other regional currencies. In the Philippines, the peso is back to its crisis-state of 41 to the US dollar. As a result, prices are still high thereby almost eliminating purchasing power for a great majority of the population. Poverty is still escalating as well as unemployment rates. Interest rates are low. Business is not doing all that well.

It makes us wonder then whether the professed recovery is real or merely sugar-coated news to pacify the burgeoning discontent of the masses. Despite the claim that tough times are over, that we have survived the crisis, we honestly do not feel better off.

This makes us wonder what recovery could actually mean. What does recovery entail? And if experts say we're on the road to recovery, what direction is that? What recovery measures are they referring to?

WHERE IT ALL STARTED

The Asian financial crisis was triggered by the spiraling of the Thai baht in July of 1997. That in turn was a result of massive speculation. But even before all these, I believe we could find a correlate between the 1997 crisis and the road taken by the new industrializing countries (NICs).

The NICs of the 1980s employed the export-oriented industrialization model. In the pursuit of economic prosperity, Asian economies like Korea, Singapore, and Taiwan joined the free trade bandwagon and chose the export market as the engine of their countries' growth. NIChood was characterized by high-speed growth to as high as double-digit percentages, manipulation of the state to keep interest rates high to be able to attract foreign investors, disregard for safety nets and capital controls.

At the time, there was this race to economic prosperity. Using Korea as an example, it went to the extent of pawning the environment and the labor force in exchange for ensured economic growth. Korea relied on long working hours, cheap labor, minimum investment in safe working conditions to keep labor affordable and thus making their goods competitive in the global market. In the interest of keeping foreign capital flowing into the country, Korea also neglected safety measures and in the process endangered its natural environment and natural resources, thus resulting in the degradation of the Korean environment.

Because export-oriented industrialization was the favored engine of development, Asian economies became dependent on foreign capital and external factors. Everything was structured to meet the demands of the foreign capitalists. Interest rates were manipulated to meet their needs. Capital controls were neglected as well as safety nets to allow more capital to come in. In the process, the domestic markets were left weak and unable to compete with the foreign goods. Foreign capital however, came in the form of hedge funds and portfolio investments which means that they were not stable and long lasting investments. Portfolio investments circle the globe and go where profits are more forthcoming. That is the danger with these funds. As soon as it sees greener pastures, it doesn't think twice about leaving one country and transferring to the another.

Simply put, that is what happened in 1997. Speculations made investor confidence wary and unstable. Portfolio investment fled the Asian economies and so this triggered the capsizing of the Asian economies. Imagine the domino effect. Once portfolio investment was lost, and as we have established that foreign capital is where Asian countries pinned their hopes for growth, prosperity and development, the Asian economies began to crumble. Not knowing what to do and not equipped with the measures to defend against these losses, the crisis became inevitable.

POST CRISIS

Two years after the height of the financial crisis, analysts and speculators feel that we've dug ourselves out of the hole we helped create in the first place. They see recovery at hand. But the road to recovery is a little hazy. First we must realize what specific kind of recovery these analysts are talking about. What are the components of this recovery that they claim we are undertaking?

"How do you measure recovery? Are you just looking for recovery in financial markets, the stability and strengthening of currencies and stock markets? But it's much more than that. We are looking for a broad-based, sustainable recovery. That means improvements as we go along. Not just increases in output, but other benefits that come with it: higher employment levels, eradication of poverty, reducing the prospects for social dislocation."1

Recovery in the form of a re-structuring of the fundamentals of the government and the economy means deep-seated changes at the core. These changes may prove to be painful in the short-term but will definitely deliver remarkable benefits in the long term. The issue always is: are we willing to take on the costs of a real re-structuring, a real journey towards recovery?

THE REFORM SCHOOLS

This financial crisis has spawned 1001 proposals for the reform of the global financial order. But beneath the plethora of technical details and differences, there are three basic approaches.

The first of these proposed alternatives suggests that there is basically nothing wrong with the current financial architecture. Primarily associated with Wall Street and Washington and the Group of Seven, the idea is that the system merely needs improvement with the 'wiring'. This cautious move calls for voluntary moves towards greater transparency by hedge funds and mutual funds. This further states that there is a need to further strengthen the role of the International Monetary Fund. In effect, this makes the IMF a lender of last resort to countries which are willing to undertake strict financial reforms as the IMF helps it rebuild their economies. Under this reform school, there will be a move towards more liberalization, greater transparency, tougher bankruptcy laws to eliminate moral hazard and more prudential regulation. 

In paper, this looks like a viable solution. But beneath the cloak, we cannot but realize that it is just another mechanism to further institutionalize the Western-style financial practices. It becomes clear that the wiring it hopes to implement is actually a ploy to get the emerging markets more effectively intertwined and "dependent" into the global financial markets led and dominated by the North, specifically the US.

The second alternative is aptly termed the "Back to Bretton Woods" reform school. The underlying restructuring agenda under this is the strengthening of capital controls and the imposition of safety nets. These proposed capital controls at the international level will of course be supplemented at the regional level such as Malaysia's tough measures to curb capital outflows. It could also follow the lines of Chile's strict rules on capital inflows as it requires a specific period of time for the foreign investment to stay put in the country.;

Proponents of this reform school feel that stricter capital controls will prevent destabilizing movements of speculative capital while at the same time encouraging the inflow of long term direct investment and credit. These controls used as trade and industrial policies will greatly help in the pursuit of economic development.

Consequently, this reform school calls for the re-structuring of the World Bank, the IMF, and the WTO along the lines of greater accountability. There has to be less doctrinal approach to free trade liberalization plus a legitimized voting power in these institutions for developing countries. Though this view infuses greater power and role to the IMF, it is unlike the previous suggestion of the G7. For this second alternative, the IMF is seen as achieving the same goals and playing the same roles minus the tight conditions that currently accompany its emergency lending policies.

We however favor a third school of reform that we conveniently call, "It's the development model, stupid." The advocates of this theory feel that there is no possible means to really transform the multilateral agencies, which we see as the lynch-pin of an international system that systematically marginalizes the developing countries. We also have apprehensions about the cutting edge and supposed far-reaching effects of imposing capital controls both internationally and regionally. We do not merely assign the blame on speculative and volatile capital circling the region as cause of destabilizing the regional economies and thus spawning the crisis. Using this view, the main problem apparently lies in the development model itself. The main problem is the very fabric of institutionalizing exports and foreign capital as the twin engines of economic growth and development. As countries went on in their pursuit of economic prosperity via export-led growth, they have become so intertwined with the global economy and greatly dependent on foreign capital that without these two, they no longer see nor are they ready for another road to development.

THE WAY OUT OF THE CRISIS

It becomes clear that the only secure way out of this turmoil, the road away from crisis is to de-globalize the domestic market. There must be moves to make countries more internally reliant, that they must depend on internal factors and domestic markets to be engines of growth. An establishment of a true cooperative relationship among neighboring countries will also be highly beneficial. Also, it is quite important that these Asian countries ought to learn that there is virtue in taking things slow, that there is absolutely nothing wrong with a slower rate of growth and development so long as this ensures less income inequality and less environmental harm.

Of course it would be much more helpful if we can truly speak of a reformed and restructured global financial architecture. However since that does not happen overnight and that may take on a few more years down the road, it is best we keep two things in mind at the moment. We must be vigilant in not letting these reforms be another veiled means to further integrate the emerging economies into the established global system controlled by the North. Second, we must create room for capital controls, trade measures and regional cooperative arrangements to facilitate internal economic transformations with the absolute minimum disruption from external forces and manipulations.

THE VISION BEYOND 2000

It is time we realize that prosperity doesn't end in economic tables alone. What ought to be measures for growth and development, for economic prosperity, for success? Two years after the crisis and at the turn of the new century no less, we must finally realize that 10% growth rates are not the be-all and end-all of everything. Profit is not the only measure for a country's success. All these are not to be seen as ends in themselves.

What good is development if it is pursued at the risk of the population's security and well-being, at the expense and the endangering of the environment, if it does not trickle down to the masses as a form of equitable income re-distribution? What good is amassed wealth and a sound economy when this does not translate to better services and security for the people?

Beyond 2000, we must realize that there is an ever-growing call to look at development in a sustainable way. Real development ought to be generated using internal factors and resources. It must be made felt to the entire constituency. Development must translate into poverty alleviation, crime prevention, a sound and stable governing body matched with a sound economy. Further into the 21st century we also see that there will be a clamor for greater democracy in all facets of society.

We may well be on our way to recovery. The challenge is to hang on and stick to the road no matter what the initial cost. The challenge is not to let go of the vision that there is an alternative to growth and that is achievable. The challenge is to realize there is a way out of this crisis if only we are collectively willing to trek the road together.

Notes:
1.  Zeti Akhtar Aziz, Asia Plots the Way Forward; Asiaweek; May 28, 1999; page 86

(This presentation was made by Marissa de Guzman at the Consultation "FROM CRISIS TO KAIROS CCA URM BEYOND 2000" held in Bangkok  1-4 October, 1999)

 

2. NEWS in Brief - top
 

BANGLADESH

Global Campaign for Education

Ten years after the UN Convention on the Rights of the Child guaranteed education for all children, the promise is still a distant dream. Over 125 million children, most of them young girls, never even see the inside of a classroom. Another 150 million children receive schooling of such low quality and such high cost that they drop out of school soon after they start.

Not willing to let this injustice continue, a powerful alliance of international organisations and national movements have joined forces to launch a Global Campaign for Education. The campaign intends to mobilise public pressure on governments to fulfill their promises to provide free, quality education for all people. Article 28 of the Convention on the Rights of the Child requires governments to make primary education compulsory and available free to all, while Article 29 calls for education that develops children's full human potential and prepares them for responsible life in a free society.

Bringing together organisations working in 180 countries, the campaign's steering committee includes: Education International (the world organisation of teacher unions), Oxfam International, ActionAid, the Global March Against Child Labour, the South African NGO Coalition, the Campaign for Popular Education (Bangladesh), and the Brazilian National Campaign for the Right to Education. This campaign marks the first time that leading social organisations have joined together in a determined drive for universal education.

NORTH KOREA

North Korea trapped in vicious circle of poor nutrition

North Korea's severe food crisis cannot be resolved without international aid, economic growth and the country's integration into the global economy, two UN food agencies said in a report published recently.

"Given the scale of the problem and its root causes, future food supply prospects are almost entirely contingent on international food and rehabilitation assistance," said the report by the World Food Programme (WFP) and the Food and Agriculture Organization (FAO).

The country's nutritional situation remained "fragile" in spite of Pyongyang's efforts to redress chronic food shortages.

The agencies said "economic growth and the ability of the country to integrate itself into the global economy" were further requisites before any improvement was likely.

Failing these "food availability and health and nutritional standards will continue to fall markedly." The report follows a 10-day fact-finding mission by FAO and WFP officials to North Korea last month. According to the two agencies living standards in North Korea have significantly declined in the last four years. "Widespread starvation has only been averted by concerted national efforts and the unprecedented volume of humanitarian food assistance  provided by the international community," said the report.

The two agencies expected food supply to remain "precarious over the next 12 months" but said some improvement had been made in rice production this year due mainly to the increased use of fertilizers, adequate irrigation and the absence of serious pest and disease attacks.

Based on population figures provided by Pyongyang, grain demand for food and other uses for 1999/2000 is said to be 4.76 million tonnes. This leaves a deficit of about 1.29 million tonnes, of which the government is expected to import 300,000 tonnes, said the report.

A further 370,000 tonnes is covered by expected food aid imports, leaving 623,000 tonnes of grain that will need to come through assistance programmes.

HONG KONG

HK TOY Coalition Campaigns for compensation to victims of Zili fire

A campaign has begun against a toy firm's failure to compensate victims and their families following a fire at a Hong Kong-funded factory in Shenzhen six years ago yesterday that killed 87 and 47 injured workers.
Many of the workers could not escape because factory windows were sealed and escape routes blocked.

The Italian firm Artsana S.p.A./Chicco pledged two years ago to give victims a total of $1.3 million in compensation, but decided this year to divert the money to charities instead. It said mainland red tape had thwarted its attempts to get a full list of victims.

A Hong Kong concern group dissatisfied with the move decided to launch the protest and a rally to mark the sixth anniversary of the Shenzhen Zhili Handicraft factory fire on November 19, 1993.

The co-ordinator of the Hong Kong Coalition for the Safe Production of Toys, May Wong Yuet-may, said: "The victims helped Chicco make profits. It should be responsible for giving compensation.

"Some injured victims are waiting for the money to undergo surgery."

The group said it had passed Chicco a list of 40 victims and the company should be able to find the others.

"We strongly condemn the hypocrisy, insensitivity and gross negligence of Chicco," the coalition said.

It demanded Chicco stop diverting the $1.3 million for other purposes, make more efforts to locate the victims and compensate them.

Coalition convenor Chan Ka-wai said labour unions in Ireland, France and Italy had joined the campaign.

EAST TIMOR

International Aid Workers struggle to rescue refugees

International aid workers are being forced to mount "commando-style snatch-and-run operations" in West Timor to rescue refugees from the grips of increasingly violent militia gangs, officials said yesterday.

Mr Robillard said the return of refugees to East Timor was depriving the  militias of their bargaining power and they were getting increasingly desperate.

"The more people return to East Timor, the more vicious the attacks become," he said.

The UN High Commissioner for Refugees sent a convoy to one camp on Thursday to pick up 100 refugees who had registered to go home. But only 17 people showed up because of threats by militiamen, said spokesman Kris Janowski.

He said the UNHCR yesterday had to "hurriedly extract" 76 people from Tua Puka camp, which is militia controlled, and drive off at top speed before thugs could respond.

Mr Robillard spoke of chaotic scenes in the camps as refugees clamoured to get on board vehicles before militiamen could separate families or kidnap children.

 

3. RESOURCES Received - top
 

Communication and Debt’ Key issues in Global Communication, World Association for Christian Communication, 1999.

At first glance there does not seem to be anything in common between debt and Communication. The authors of this article argue that communication has a place in deciphering ‘Third World Debt, Structural Adjustment Policies, the Balance of Payment Crisis, and their accompanying perpetuators consisting of the IMF, World Band and World Trade Organization.

(For a copy of the article you my get in touch with World Association for Christian Communication 357 Kennington Lane, London, SE11 5QY, UK web: www.wacc.org.uk)


-------------

Zirnsak, Kristina & Mark, (1999). ‘Poor Country Debt – As Devastating as War’, in Disarming Times, Pax Christi Australia, Vol. 24, No. 3, Sydney.

Debt is tearing down schools, clinics, and hospitals, and the effects are no less devastating than war. Debt is the chain that perpetuates dependence. The Jubilee 2000 campaign sees the need for the chains of dependence to be broken so that people of the indebted countries may be free to create their own vision of development.

(a copy can be obtained from Pax Christi Australia, Sydney branch, P.O Box A 899, Sydney. Sth 2000)


-------------

Bello, Walden. Still No Protection Against Capital Speculators

A critical discussion on what some people call ‘real economic recovery’ in Asia but regarded by others as the return of the ‘Electronic Herd’, as described by New York Times columnist Thomas Friedman. Bello examines the irresponsible never-ending move by Washington to push for opening up trade and financial markets with little challenge from Europe and Japan. With no protection the future looks gloomy.

(for a copy visit http://www.twnside.org.sg)


-------------

Development, Equity and Justice: Adivasi Communities in India in the Era of Liberalization and Globalization, (1999), Report of a roundtable jointly organized by Minority Rights Group (MRG) and Centre for Social Knowledge and Action (Setu), Ahamedabad.

The report contains summaries of the papers presented at the roundtable and highlights of the discussion. The roundtable focused attention on the following issues.
* Displacement of Adivasis from land and livelihood
* Economic Marginalisation of Labor and Livelihood
* Decline of Food Security
* Deteriorating Social Ecology
* Increasing Marginalisation of Women
* Increasing Threats to Adivasi Culture and Traditions
* Decrease in Access to Education and Health Care

(For copies of the report e.mail: setumail@wilnetonline.net or shelina.thawer@margmail.org)


-------------

Walsh, Pat (1999), 'East Timor - A Model Among Mini-States For the next Millennium?, Disaming Times, Pax Christi Australia, Sydney.

Despite all the material shortcomings and other challenges it faces, East Timor is emerging from its baptism of fire with leaders of internationally recognized caliber, a strong Church, and a people who have demonstrated extraordinary resilience, creativity and character. These are great assets. East Timor is becoming the first new state of the third millennium.

(for a copy write to Pax Christi Australia, Sydney branch, P.O. Box A899 Sydney Sth 2000)


-------------

Quizon, Antonio B. (1999). 'To Sing Our Own Song: Reflection on Economy and Ecology, Community and Spirituality', Info on Human Development, Vol. 25, No. 7-9, Office for Human Development for the Federation of Asian Bishops' Conference, Manila.

The poor are forced to live and eke out a living from fragile ecosystems - by birth or by choice or else driven by natural disaster, political conflict or increasing social and economic displacement. They farm lands that are too little, too steep or too dry. Or else they scrounge for a living through long working hours in the isolated fringes of  towns or among the growing ranks of congested urban slums.

(for a copy write to Officer for Human Development, 1451, Guevarra Street, Sta. Cruz, Manila, P.O. Box EA-12, Ermita, Manila, Philippines)


-------------

Khor, Martin, (1999). 'Fight Hots up Against GM Foods', Third World Resurgence, Third World Network, Penang.

As the controversy over genetic engineering rages on, Prince Charles and Paul McCartney have joined in the crusade against genetically modified food, whilst the threat to the existence of  a much-beloved butterfly as a result of a biotech crop has aroused passionate resistance. With genetically modified products being pushed off the shelves in rich countries, developing countries must be on the alert against such products being dumped on them.

(For a copy refer to www.twnside.org.sg)


------------

Zaw, Aung, (1999). 'Shwedagon and the Generals: Playing the Religion Card', 'The Irrawaddy, Vol. 7, Chiang Mai.

The Burmese generals  recently renovated Shwedagaon Pagoda. Under the Junta's guidance intensive restoration of ancient pagodas and temples is being carried out all over Burma. As people throughout the country donate gold, diamonds and rubies to pagoda, the generals pay daily visits to sacred shrines. But what is the reason behind all this? Do the generals rally believe they can atone for their past in this way, or are they simply trying to white wash their sins?

(for a copy write to waddy@cm.ksc.co.th)

 

4. Urgent APPEAL - top

 

HONDA WORKERS PROTEST DISCIPLINARY ACTIONS

The Lakas Manggagawang Nagkakaisa sa Honda Independent (United Strength of  Workers in Honda), is currently protesting the illegal suspension slapped on 300 Honda workers last October 21, 1999.

The 6-day suspension arose from the participation of 300 workers in the country wide mass action last 13 October 1999, to press the clamor for the KMU-spearheaded campaign P125 across the broad nationwide wage increase. Honda Management alleges that the workers violated Rule D. 9 of the Company Rules and regulations which states "Leaving work assignment and /or company premises during working hours without prior permission from superiors and slapped them 6-day suspension.

Days before the said mass action, the union filed a request to the management to change the production schedule on the said date from 6:00 A.M to 2:00 P.M. However, the management refused to grant the request on grounds that " production priorities would be affected, and the entire company, including all associates, would suffer as well".

Aware however of the greater need to express their solidarity and unity in the common fight of their working brothers, some 300 workers went out of their job and joined the mobilization.

The union said that contrary to the management's claim that the union acted "in utter disregard for the Company's welfare, and in gross violation of our Code of Conduct", they have been very understanding of the Company. "The request letter we made as part of our advance notice explains the good and honest intention of the union and shows our respect and concern to the management and the company. But instead of understanding us, they continued to be callous in their decision, just thinking of their profit. We have no intention of abandoning our jobs, but it is they who pushed us to do so, said union President Banjamin Villeno.

Since then, the union has been holding membership meetings during break times and protest actions inside the company to protest this illegal suspension.

The union is also demanding the resignation of their company physician due to inefficiency, which has been issuing false diagnosis to sick workers whovisit the clinic. A worker attested that symptoms of Hepatitis A, which later turned out to be positive, were dismissed as nothing. Another worker said his infectious diarrhea is diagnosed as just gas pains. In another case, a worker went to the clinic complaining about a pain in his eyes. The company physician, after examining it, said nothing is wrong. Worried, the worker insisted to have a check-up in another hospital where it was discovered that a small piece of steel is inside his eyes. These are justsome of the cases. However, despite of these valid testimonies, the management is turning deaf ears to the complaints of the workers.

Honda Cars Philippines, Inc. was established in 1991, although production  started in 1992. It presently has 1,060 workers, 700 of which are union members. Average daily wage of the workers in the company is P300.

Honda Philippines produces vehicles and is located in Laguna Technopark, Sta. Rosa, Laguna. A Japanese firm, its mother company is Honda Motors Japan, which holds 60% of its stocks. Other stockholders are Mitsubishi Corporation (35%), Ayala Corp. (4%) and RCBC (1%).

Send solidarity messages to:

Benjamin Villeno
President
NLMH Independent
C/o KMU International Department
37-A Quintos Compound Tomas Morato,
Street Barangay Kristong Hari,
QC, Philippine.
Fax # (632) 7256781
Email: kmuid@csi.com.ph

Send protest letters to:

KENJI OTAKA
President & General Manager
Honda Cars Philippines, Inc.
105 Southmain Ave.,
Laguna Technopark, Sta. Rosa, Laguna
PHILIPPINES
E-mail address:
hrd@hondaphil.com or jsarol@hondaphil.com

 

5. ANNOUNCEMENT - top
 

 

 


END

Return HOME

 

 

We hope that the materials in this website have been useful to your work and ministry.   You are free to reproduce the information on this website in your publications.   We only ask that proper credits be given to the writers as well as DAGA/CCA-URM.   We will also appreciate it very much that a copy of the publication be mailed to us at the address below:

Documentation for Action Groups in Asia (DAGA):
96 Pak Tin Village Area 2
Mei Tin Road, Shatin, NT
HONG KONG SAR
Telephone: (852) 2697-1917
Fax: (852) 3017-2377
E-mail: dagainfo@daga.org.hk
HpmePage: www.daga.org