The Militant(logo) 
    Vol.62/No.29           August 10, 1998 
 
 
Workers In South Korea Strike For Jobs And Wages  

BY BRIAN TAYLOR
Tens of thousands of workers in south Korea began a three-day strike July 14 to protest job losses and wage cuts. The south Korean government, hit by the financial crisis sweeping countries throughout Asia, is pushing to implement a series of "restructuring" measures - selling off state-owned companies to foreign capitalist investors, closing weak banks, and throwing thousands of workers onto the streets - to meet the requirements demanded by the International Monetary Fund (IMF) for a $58 billion "bailout" loan.

In turn, capitalists from the United States and other imperialist countries are taking the opportunity to buy up more south Korean factories and banks.

`Reforms' provoke resistance
The strike was initiated by more than 55,000 heavy industry workers belonging to the Korean Confederation of Trade Unions (KCTU). Some 50,000 bank workers, telephone workers, and others organized by the Federation of Korean Trade Unions (FKTU), an umbrella union for light industry workers, joined the action. "We cannot accept layoffs. They threaten our livelihood," said one FKTU spokesperson.

"We oppose layoffs! We demand job security!" was a main chant at a rally of 10,000 strikers and students July 15 in front of Myongdong church where labor leaders have taken refuge from the government. Seoul issued warrants for cops to arrest 85 union officials for "illegal" strike activity.

Union officials for workers at Hyundai Motor, who initially went on strike indefinitely, went back to work early. "Now that we have taken a flexible stand, we expect management will be flexible, too," said official Kim Yun-ho. But the bosses at south Korea's largest automaker went ahead with the company's first massive layoffs anyway, handing 2,500 workers dismissal notices July 16.

During the first half of this year, so-called restructuring has doubled unemployment to 1.5 million - 6.7 percent - and is projected to reach 2 million by the end of this year. On the average, 2,000 people a day are losing their jobs. Trying to justify the government's austerity moves, south Korean president Kim Dae-Jung said, "Workers are not the only ones who suffer....We all must share the pain."

Kim has spearheaded the "reforms." A bourgeois politician once held up in the big-business press as a champion of working people, Kim's decision to drive through on IMF demands is forcing tens of thousands of workers into battles.

Some 14,000 Kia Motors workers struck on June 1 against 50 percent wage cuts and unfair labor practices. Workers there are have not been paid $6,500 in bonuses accrued over the past half year. This was one of many labor actions that followed a two-day general strike May 27-28 organized by the KCTU in response to massive layoffs. Over 120,000 workers at more than 130 worksites participated in that strike.

The KCTU issued five demands including to scrap legislation passed recently to allow the layoffs and a hefty increase in unemployment compensation.

The Kim government, calling unionists' demands "unacceptable," mobilized cops to take "strong" and "stern" action against strikers if they prevented scabs from entering factories, blocked plants in any way, or damaged property. Seoul's Supreme Prosecution Office subpoenaed 143 union leaders of the May strike and threatened to arrest them on charges of organizing a work stoppage of more than 100,000 people.

Seoul debt crisis deepens
South Korean companies have a debt to south Korean financial institutions of nearly $432 billion. National banks have issued loans to collapsing domestic industries that amount to many times the company's value. Companies that can't repay the loans often go under. The default on those loans renders south Korean banks unable to pay the debt owed to capitalists. Then the government assumes the bad debt, trying to stave off instability and losing foreign capital, footing the bill with no prospect of being repaid, thereby increasing the country's overall debt.

This vicious circle is in part what triggered the currency crisis that led to the IMF "bail out" last December. In the first week of January 100 Korean companies went bankrupt and 10 merchant banks shut down. Thousands of bankruptcies are still looming.

Moody's Investor Service downgraded the ratings of 19 commercial banks in south Korea May 11. U.S. bank moguls are pressing Seoul to break up business conglomerates called chaebols, and put them up for sale. The south Korean rulers are eliminating government protections on domestic industries while selling off pieces of the country's major industries, from steel to automobile manufacturing. The Korea First and Seoul banks have already been taken over by the government and are scheduled to be auctioned off this November. Through the sell-off of the national patrimony Seoul has a goal of raising $6 billion from the auction block by December 1999.

U.S. and European capitalists are looking to buy up factories and banks in the region at bargain rates, in hopes that the crisis will bottom out and the "Asian miracle" of rapid growth and profits will restart. General Motors chairman John Smith Jr. told the Wall Street Journal, "Up until recently, we have had to build our way into Asia," but now it can be done through partnerships and acquisitions. GM officials are in talks with Daewoo Motors about an alliance. Ford Motors and the Japanese company Mazda Motor are expressing interest in jointly buying 50 percent of Kia Motors. The U.S. power company AES Corp. announced a $874 million buy up of south Korea's Hanwha Group, and German bankers at Commezbank said they will grab a $250 million stake in the state-run Korea Exchange Bank.

The more the imperialists anchor themselves in the economies of the underdeveloped nations, the stronger they are affected by the crisis and the social explosions in these countries. Japan's prime minister Ryutaro Hashimoto announced July 13 that he would resign, after the ruling Liberal Democratic Party took a beating in parliamentary elections. The Japanese economy is in its worst recession since World War II, with a possible banking collapse looming as a result of uncollectable loans. "The reality is beginning to dawn" on capitalist investors, commented Gary Greenberg, managing director of Van Eck Global Asset Management Asia, in early June. "Earlier optimism," Greenberg says, is being replaced with more "economic bad news."

 
 
 
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