TNCs and Asian Labour

 

 

In 2002, the first meeting of Asia Monitor Resource Centre’s (AMRC) Asian Transnational Corporations (ATNC) Project that gave rise to the ATNC Monitoring Network was held in Bangkok; since that time the network of groups has grown.

 

The Indian economy grew at a rate of about five percent per annum during the 1980s. Despite this growth the country faced an acute economic crisis, reflecting some domestic problems but primarily external ones relating to pressure on the balance of payments. Major domestic problems related to inflation, which peaked at 17 percent in 1991, and a central government fiscal deficit that stood at an all time high of 8.4 percent of gross domestic product (GDP). On the external front, foreign exchange reserves continued to fall - plunging to $1.2 billion - just enough to pay for two weeks of imports. The current account deficit widened to almost $8 billion (2.6 percent of GDP). It was inevitable that these symptoms would result in loss of confidence by international bankers and the debasing of India’s credit risk ranking by Moody’s. With these problems the International Monetary Fund (IMF) and the World Bank financially supported the country on condition that a Stabilisation and Structural Adjustment economic package was implemented. Faced with such economic difficulties, a new government that took power in June 1991 approached the IMF and World Bank to bail it out. In India, it has been a subject of debate; given these bleak economic conditions India had little choice but to embark on a liberalisation drive while the other point of view is that India could have overcome this situation by adopting tough measures of financial discipline particularly for unplanned expenditure and mobilising resources from within as well as unconditional external financial borrowing.

 

Compared to state-owned enterprises (SOEs) that have the means and institutions to resolve conflicts under China’s ‘socialist’ relations system, industrial relations in foreign-invested enterprises (FIE) are seriously imbalanced. The FIEs operate as depoliticised, purely economic islands on which Party institutions do not have, and more often than not refrain from developing, mass-based organisations.

 

Since the 1980s the pattern in Southeast Asia, and other developing nations and regions, has been to suppress and maintain authoritarian control over labour and trade unions in order to maintain ‘investor confidence’ and foreign direct investment (FDI) inflows. Free trade agreements (FTA) are often falsely associated with improved labour conditions, more jobs, and better pay, but the reality is often far removed from this promise. Ignoring the hard lessons Mexico has learned after 10 years of free trade and increased market access under the North American Free Trade Agreement (NAFTA), Thailand, which has implemented an FTA with Australia, is forging ahead on FTA negotiations with the US, Japan, and a number of other nations and, if implemented, the consequences could be felt not only by manufacturing, service, and agricultural workers in Thailand (among others), but also regionally as the Thailand-US FTA has a high potential for spillover effects.

 

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Asian Labour Update

ISSN 1815-9389

Issue No. 58 January - March 2006

c 2006 Asia Monitor Resource Centre

 

Editorial team

Apo Leong, May Wong, Sanjiv Pandita, Omana George,

Chang Dae-oup, Sharon Cheung, Ed Shepherd

 

GUEST WRITERS IN THIS ISSUE

 

Krishna Shekhar Lal Das is the Programme Officer for Migrant and Contract Labour issues in the Centre for Education and Communication, New Delhi. He has an MA in Employment and Labour Study from the ISS, The Hague, and a PhD in Soviet Politics and Administration from JNU, New Delhi, India.

 

Jagdish Patel is the co-ordinator at the Peoples Training And Research Centre, Baroda 43,Srinahtdham Duplex, Gujarat, 390007, India. He is also the current co-ordinator of the Asian Network for the Rights of Occupational Accident Victims.

Email: jagdish DOT jb AT gmail DOT com

 

Monina Wong is executive director at the new Hong Kong-based labour research NGO, Labour Action China. For the past several years she worked as research co-ordinator for the Hong Kong Christian Industrial Committee.

E-mail: virtualmonina AT hotmail DOT com

 

Dennis Arnold is a researcher and activist with the Bangkok-based Thai Labour Campaign. He also participates in the Asian TNC Monitoring Network, coordinated by AMRC, as Southeast Asia Researcher.

E-mail: dennis AT thailabour DOT org/dennis6272 AT yahoo DOT com

URL:http://www.thailabour.org