By any measure, it's the biggest welfare program in history. And it aids three countries that the World Bank, in its 1993 report, The East Asian Miracle, hailed as "high performing economies" for their high and sustained growth rates based on getting the economic "fundamentals" right.For policy analysts at the Heritage Foundation, a Washington think tank, the bailout is money down the drain. Maybe. But certainly the crisis signals the need for reform, within the afflicted countries and beyond. The prescriptions offered by experts are many. One increasingly mentioned, but buried way down in articles and speeches, is the need to "stimulate domestic demand."
Wrong People Being Required to Tighten Their Belts
Translating the jargon of economists: stimulating "domestic demand" means increasing the ability of consumers to buy products and services. Unfortunately, reform policies pushed by the IMF tend to repress demand rather than stimulate it. Working men and women form the largest group of consumers being called on to tighten their belts. In the next two months, more than one million Korean workers are expected to lose their jobs. A lot that will do to stimulate the economy.
Globalization in East Asia has certainly produced massive wealth. It is widely evident:
The Middle Class Is Not Exempt from Taking a Hit
In Thailand a strong upward trend toward greater inequality started in the mid-1970s, following a shift toward an export-oriented strategy in economic policy. The income share of Thailand's middle class (the middle 40%) slipped from 36% in 1975 to 30% in 1992 while that of the richest 20% grew more than doubled (from 12% to 28%). Those revealing figures, from the 1997 Trade and Development Report of the UN Conference on Trade and Development (UNCTAD), have received almost no publicity.
Gross income inequality based on widespread poverty can lead to political instability, the report warned. Discreetly, it named no countries that are vulnerable, though several likely candidates are currently in the headlines.Even Hong Kong is not spared. Early this month, the South China Morning Post reported: "Social discontent in Hong Kong has been gradually building up since the late 1980s and is likely to be exacerbated." The major reason, according to a poll conducted by an institute at Chinese University: more and more residents regard Hong Kong, both under British and now under Communist rule, as an "unfair society" catering to the rich. Lau Siu-Kai, associate director of the Hong Kong Institute of Asia-Pacific Studies, predicted in the Post that income inequality, already wide, "will continue to grow unabated in the future."
"Without the trust of the people, no government can stand."--Confucius quoted in The Analects of Confucius, translated by Simon Leys, and cited by Jonathan Spence in a long review in the New York Review of Books in April 1997. Until now I've not had a good occasion to use the quote.
Heretofore, the U.S. Customs Service had claimed that existing U.S. law was ambiguous on this point. Last fall Rep. Barry Sanders took the lead in clarifying it with an amendment to the U.S. Treasury authorization bill.
The International Labor Rights Fund, a Washington-based group that has long campaigned against worker rights abuses, petitioned the U.S. Commissioner of Customs in November to start enforcing the law by barring the entry of South Asian carpets made by child labor.
Carpet Exporters in India Feel the Law Won't Touch Them
This petition created a stir within the Customs Service and its parent agency, the U.S. Treasury Department. Meanwhile, a delegation of carpet exporters from India were quick to meet with Clinton Administration officials, and, according to reports from New Delhi, they returned home convinced that they had nothing to worry about--the new law would not affect the labor practices of their industry.
The Child Labor Coalition, headquartered in Washington, has urged its member organization to write letters protesting the Clinton Administration's hesitations in enforcing the new law. An inter-agency committee is now studying the issue. Faxes to Robert Rubin, Secretary of the Treasury (202/622-0073), and Ann Lewis, Special Assistant to the President (202/456-2223), would help speed up deliberations.
No "Oriental" rugs are made in the United States. Hence the Fund's concerns cannot be slandered as "protectionist." The Fund has a new Web site at http://www.laborrights.com. At this writing it does not yet have information on the petition to Customs, but it is worth accessing nevertheless.
"I pledge to investigate and take into account the social and environmental consequences of any job opportunity I consider."Students at Humboldt State University in California in California started taking that pledge in 1987, as part of their graduation ceremonies. Since then, students in dozens of schools around the country have followed Humboldt's example. And Manchester College in Indiana is coordinating a national campaign to encourage others to do likewise. The voluntary commitment made in the pledge leaves students free to determine for themselves what they consider to be socially and environmentally responsible.
Manchester's Web site at http://www.manchester.edu/departmt/peace/pldgback.html has more information on what it calls the Graduation Pledge Alliance. Here's an explanation of the motivation behind the campaign:
"Each year well over a million students enter the work force who might potentially influence the shape of corporate America, as well as other segments of society. Think of the impact if even a significant minority of applicants and job holders inquired or questioned the ethical practices of their potential or current employers."
We had a pleasant enough meeting. But nothing happened. Through the decade of the 1980s, and so far through 1990s, there have been many, many meetings on the same subject. Nothing much has happened, beyond talk. And the new World Trade Organization has refused even to talk about the subject seriously, despite the repeated requests of the U.S. government.
Global interdependence requires a whole new set of global rules. Many are already adopted, often with strong sanctions, to protect intellectual property rights, foreign investments, and maritime shipping, for example. Many more are in various stages of development--regulating currency transactions, global corruption, and cross-border pollution, for example.But enforceable global rules to offer minimal protection to vulnerable men, women, and children in the international labor market? That's a no-no because of the opposition of authoritarian governments and leading employer organizations, national and international. A major 1998 goal should be to expose that shameful collaboration, to denounce it as blatant discrimination, and to break its stranglehold on the WTO.
But one day, as I was walking to the supermarket down the street, I got an idea, and lest I lose it, I scribbled down these words on a piece of paper I found in my pocket:
To analyze and dramatize how globalization affects working men and women and how it creates the need to incorporate the human rights of workers into global rules at the national, regional, and international levels through governmental, quasi-governmental, private business, labor union, and other non-governmental channels.I tested it with an email colleague in Australia, Anita Chan, and she wisely pointed out that "dramatize" suggests fictionalizing. So, cross out "dramatize" above and make it "publicize." Thus corrected, doesn't that sound like something worth doing? If so, please bookmark Human Rights for Workers right now. There's a big year ahead of us. See you again in two weeks or so.
Robert A. Senser
Editor, Human Rights for Workers
(Send e-mail to email@example.com)
Bulletin No. III-1, January 12, 1998