Air Date: May 26, 1998 Program 9821

KOREA'S ECONOMIC STRUGGLE; CHILD LABOR

Guests:
Cheol Park, spokesman, Daewoo Industries
Ha Sang Woo, assembly worker, Kia Moters
Mike Brown, President, American Chamber of Commerce in Korea
Chae Mahn-Soo, Deputy Director, Korean Institute for Labor Studies and Policy
Yoon Young-Mo, International Secretary, Korean Confederation of Trade Unions
Chong Pyong Do, Student Body President, Seoul National University
Tom Harkin, Senator (D-Iowa), United States of America

(This text has been professionally transcribed, However, for timely
distribution, it has not been edited or proofread against the tape.)

KOREA'S ECONOMIC STRUGGLE

MIKE BROWN: [with Korean music in the background] Had the IMF not come in, had there not been this international support, we would have had a moratorium and the situation would be even darker today than what it is. We would have run out of money.

JEFF MARTIN: In this edition of Common Ground, though it has not erupted in violence like Indonesia, the people of South Korea are also feeling the effects of the Asian economic crisis. And there is no consensus on whether the current measures will improve the situation.

YOON YONG-MO: This crisis is not something that will end in a couple of months or in half a year or one year, but, and also the problems will become worse and worse.

MARTIN: And then later in this program, the pervasive problem of child labor.

SENATOR TOM HARKIN: I'll bet you that half of the people in this room, maybe even myself, is wearing some piece of clothing made in a foreign country by a child.

MARTIN: Common Ground is a program on world affairs and the people who shape events. It is produced by the Stanley Foundation. I'm Jeff Martin.

MARTIN: South Korea is undergoing its worse economic crisis since the Korean War. Many Koreans blame their government and the huge conglomerates that dominate their economy. But they also deeply resent the International Monetary Fund for imposing harsh austerity measures. Still, this country, which has a long history of militant demonstrations, is so far experiencing few street protests. Correspondent Reese Erhlich, reporting from Seoul, looks at that paradox.

REESE EHRLICH: [with sounds of a soup kitchen in the background] At night some 400 men sleep on the hard basement floor of Seoul's main train station. At precisely 11:00 a.m., in an empty lot near the station, religious volunteers serve them rice, kimchee and meat, their only meal of the day. One middle-aged man standing in line looks different from the rest. He wears plaid slacks and a windbreaker, with a designer label.

KOREAN MAN: [via a translator] I used to be a manager at an electronics company in the south of Korea. My company went bankrupt so I tried to find work as a day laborer. But I couldn't do that near my home. That's why I came to Seoul. At night I sleep inside the train station. I really want to work, even just one day, to get the money to go back home. But there's no work. When it's raining, snowing, or very cold there's no place to go. We hope to get some official government relief but so far the government has done nothing.

EHRLICH: Millions of Koreans are facing lay-offs and poverty as the country undergoes a massive economic crisis. Unemployment nearly tripled in just 3 months, and may hit 10% this year. Even people currently holding jobs are getting nervous. [sound of heavy machinery in the background] Outside of Seoul at the Daewoo auto factory no one has been laid off. Yet. Daewoo invested heavily in technology and therefore hopes to survive the crisis intact. Korean auto sales dropped 20% so far this year, a sign that lay-offs may be coming, says Daewoo company spokesman, Cheol Park.

CHEOL PARK: [via a translator] The company promised there wouldn't be any lay-offs because of the International Monetary Fund austerity plan. But everyone knows that domestic sales are way down. So we're very worried about it and it causes strong emotions. After the IMF bailout there is a need for economic restructuring. We have to do that to live together. I favor industrial efficiency. But I personally worry because that policy has personal consequences. I may be laid off.

EHRLICH: [with Korean pop music in the background] That fear of lay-offs partially accounts for the lack of big protests against the economic crisis. People are scrambling to survive. Ha San Soo works on the engine-building assembly line at the Kia Motor's plant near Seoul. The economic crisis forced his company into bankruptcy.

HA SANG WOO: [via a translator] We all feel insecure because any day we could lose our jobs. Since the IMF crisis we haven't gotten our bonuses, so my annual salary went from about $18,000 a year to only $5,000. It's impossible to survive. And because Kia is in bankruptcy we don't get the company benefits that we got before.

EHRLICH: Ha's wife, Mrs. Yoon Hae Kyoung, says the crisis is caused by Korea's system of crony capitalism. She says that the big conglomerates, known at chaebols, enjoy a very cozy relationship with the government. The chaebols can expect guaranteed loans, little government inspection, and no attempts to break their monopoly power, according to Mrs. Yoon.

YOON HAE KYOUNG: [via a translator] This crisis comes from the government and from the capitalists. The government didn't have any reasonable plan for the future. The capitalists expanded too quickly for their own self-interest. Not thinking of their workers or the nation. I think the responsibility lies with them. But these days they're forcing only workers to take responsibility. They think only workers should sacrifice themselves to revive this country again. The U.S. and the International Monetary Fund are also to blame because they imposed these austerity measures on us but not on the chaebols.

EHRLICH: That's a common sentiment coming from ordinary Koreans, but it's wrong according to Mike Brown, President of the American Chamber of Commerce in Korea. He says that late in 1997 the IMF saved Korea from an economic meltdown.

MIKE BROWN: Had the IMF not come in, had there not been this international support, we would have had a moratorium and the situation would be even darker today than what it is. We would have run out of money. A moratorium is essentially when there's a run on the country and the foreign currency liabilities cannot be serviced anymore.

EHRLICH: And the country can't pay it's debts?

BROWN: Yeah.

EHRLICH: While Brown expresses sympathy for those laid off due to IMF policies, he says the country must get its economic house in order for the sake of both the U.S. and Korea.

BROWN: I think the U.S. has been very supportive to Korea, in trying to restore economic stability. It's a critical export market for us, we have sizable foreign direct investment, and stability is critical to our national interest, both with Korea and in the region. So we know that they'll be some, because of high unemployment, because restructuring any economy is very, very painful, there's going to be resentment towards IMF and major bilateral partners.

EHRLICH: There's more than resentment. There's a seething anger because the IMF is seen as having inflicted a lot of pain on ordinary Koreans while protecting foreign companies. As evidence, critics point to the IMF budget priorities. In 1998 about $36 billion in loans will go to the Bank of Korea to help stabilize the currency. $3 billion will go to a special fund guaranteeing foreign investments, and only $2 billion will help the unemployed. Critics say that the IMF policy forcing Korea to maintain high interest rates has also been disastrous. Chae Mahn-Soo is Deputy Director of the Korean Institute for Labor Studies and Policies.

CHAE MAHN-SOO: [via a translator] The hidden aim of IMF is to meet the needs of U.S. businesses. The high interest rates in Korea drive down the price of Korean stocks. American companies can more easily buy Korean corporations. Even before the IMF bailout the flexibility of the Korean labor market was a primary concern of Korean capitalists. But after the IMF bailout the needs of foreign capitalists coincided with the needs of Korean capitalism too. Flexibility means that Korean workers are facing longer hours, more work for less pay.

EHRLICH: [with sounds of marching music in the background] Some people are taking to the streets to protest IMF and Korean government policies. Outside the Myong Dong Cathedral in central Seoul, several hundred foreign workers, from Pakistan, Bangladesh, and The Philippines, hold a rally. [sounds of crowds chanting back and forth "We are labor" and other slogans] It was a sign of Korea's relative affluence that until recently tens of thousands of foreign workers were imported to do the hardest and dirtiest jobs. But the economic crisis has changed all that. Now they're laid off and facing deportation. [more sounds of crowd chanting] While the foreign workers chant militant slogans such rallies are the exceptions these days. For as long as Koreans can remember, tens of thousands of militant students and workers crammed into the streets for pitched battles with police every spring. Not this year. [more militant, up-beat music in the background] Workers aren't protesting in part because they see the economic crisis as an individual, rather than a societal problem, according to Yoon Yuong-Mo, International Secretary of the Korean Confederation of Trade Unions. Yoon says the government and chaebols have convinced workers that the crisis requires national sacrifice.

YOON YOUNG-MO: The whole idea of crisis is presented and is perceived as a kind of thing that requires a common effort, as if you're engaging in a home front effort at times of war, when a nation goes to war. So it's crisis is something that affects everyone, the whole nation, so the whole nation, whole society, everyone must chip in to overcome this problem of the crisis. That's the kind of response that's been driven at this current time.

EHRLICH: President Kim Dae Jung is largely responsible for this attitude. Kim was a long-time political dissident jailed for opposing previous military regimes. He was elected with the support of the country's largest trade union and many other grass roots groups. He's already moved to lift certain censorship laws and free some political prisoners. Lee Chan Woo, an official with the Ministry of Finance and Economy, says his government also wants to eliminate the crony capitalism that has so long dominated the country.

LEE CHAN WOO: Korean government's views of financial crisis, or our economic crisis stemming from the collusion from the government and the chaebols or something. Most of the people think that market mechanisms do not properly operate in the Korean economy. That's the biggest problem in the Korean economy. So as the President says, our economic policy aims to implement market mechanism in the Korean economy.

EHRLICH: [with background sounds of pounding drums and clanging cymbals] Every spring time Korean students could be counted on to rally at their universities and charge out into the streets to protest government policy. These days, at Seoul National University students are more likely to spend time practicing traditional drumming. [more drums and cymbals] Chong Pyong Do, Student Body President here, used to lead many of those protests.

CHONG PYONG DO: [via a translator] The Kim Dae Jung administration has tried to harmonize Koreans from all classes. It's been largely successful. Kim Dae Jung has advocated democracy and I assume there will be good developments in that area.

EHRLICH: However, some Koreans think President Kim is knuckling under too easily to IMF pressure. Union leader Yoon says Korea spends 30% of its budget on defense and it would make sense to devote some of that to help the poor.

YOON YONG-MO: We felt that it was time now to use the defense spending, to reduce the defense spending, for purposes of social welfare and social infrastructure. Then when we begin to make the kind of voices, flies in the Secretary of Defense from the U.S., and says "Korea should not touch the military budget or they should not cancel the order for the weapons from the U.S."

EHRLICH: Yoon predicts that as the economic crisis continues more and more Koreans will get organized. He predicts that opposition and protests against the IMF and government will grow.

YOON YONG-MO: This crisis is not something that will end in a couple of months or in half a year or one year, but, and also the problems will become worse and worse and as the problems become established, become real problems, I think by that time there will be sufficient room for present alternative views of the crisis. And alternative agendas in terms of how to solve, how to respond to this crisis. When, that does not come naturally. That requires constant effort in the meantime. But that's already going on. But those voices, will become much clearer and will become much more to the surface as time goes along. And when that happens I think there will be more public responses from the workers and people as a whole.

EHRLICH: [with sounds of marching music in the background] For Common Ground, I'm Reese Ehrlich in Seoul, South Korea.

MARTIN: We'll take a break for a moment. When Common Ground continues, measures are proposed to counter child labor.

SENATOR TOM HARKIN: A company could take a label that's internationally recognized, that everyone would agree on, put it on a piece of clothing or tennis shoes or pants or whatever it might be, sporting goods, and that way you would know that that article was not made by child labor. Because in order to get that, or put that label on a company would have to agree to unimpeded, unannounced inspections at any of its plants any time in the world.

MARTIN: Printed transcripts of Common Ground and audio cassettes of this program are available. Listen at the end of the broadcast for details on ordering. Common Ground is a service of the Stanley Foundation, a non-profit, non-partisan organization that conducts varied programs meant to provoke thought and encourage dialogue on world affairs.

CHILD LABOR

MARTIN: Putting an end to child labor has proven to be quite difficult. Manufacturers are always looking for lower labor costs and developing countries rarely have the resources to enforce child labor laws. Common Ground producer Keith Porter recently spoke with U.S. Senator Tom Harkin about new efforts to solve this old problem.

KEITH PORTER: [with sounds of children in the background] These children in Rwanda face many of the same dangers as children in other developing countries around the world. There is the potential for malnutrition; there is the chance that they'll be recruited as child soldiers; and surviving all that, there's the very real possibility that they'll be claimed by the child workforce.

SENATOR TOM HARKIN: I'll bet you that half of the people in this room, maybe even myself, is wearing some piece of clothing made in a foreign country by a child. I just lay odds on it. Either socks or a shirt or tennis shoes or something.

PORTER: Tom Harkin is a third-term Democratic senator from the state of Iowa.

SENATOR HARKIN: You open up our trade books today and you'll find our laws specifically prohibit the importation of endangered species; our laws prohibit the importation of products made from prison labor, since 1930; but our laws don't prohibit the importation of products made from abusive child labor. So I say, we protect ivory, we protect spotted turtles, we protect prisoners; but we don't protect kids? And that's a restraint of trade? This is nonsense. Utter nonsense. What we were seeing across the globe, as I said, was a manifestation of the new colonialism where an outside power, in this case economic not government, but an outside economic power in the form of a multi-national corporation, would step in. Again, not to exploit the country's natural resources as had been done in centuries past, but to exploit its human resources. It's people. And the ones most prone to that exploitation are the ones whose labor is the cheapest and the most vulnerable, and that's the kids.

PORTER: In 1992 Senator Harkin introduced the Child Labor Deterrence Act.

SENATOR HARKIN: I'm not talking about children who work part-time after school, who work on the week-ends, summer jobs, things like that. I worked in my youth, I'm sure that all of you did too. There's, I always try to distinguish between child work and child labor. You know. The issue is children who are forced to work in hazardous conditions, long hours, for little pay, they're denied an education and the opportunity to grow and develop. It's the kind of work that endangers their physical and emotional well-being. And make no mistake, when the growth of children is stopped so is the growth of a nation. So I look upon exploitative child labor as more than just a humanitarian and a moral issue, it's an issue that also has developmental dimensions. It's a developmental issue because no country today can hope to take part in the process of globalization and economic growth if it cannot count on it's principal resource, its people. Social development is an essential component of sustainable economic development. Countries that fail to provide their children an education are assuring that 10, 15, 20 years from now their most important resource, their adult workforce, will be uneducated, ill-prepared, and ill-equipped to advance their countries beyond the fringes of an integrated global economy.

PORTER: What effect does child labor have on the global labor market and on wages world-wide?

SENATOR HARKIN: Well, obviously it has a depressing effect on wages world-wide. Companies, because of the international nature of these businesses, can move from one country to another. And that's why we need a kind of a global approach to ending child labor. Just to keep that kind of forum shopping from happening.

PORTER: Yeah, you know often times when we want to stop chemical weapons or biological weapons or we want to protect the air or the oceans we use international treaties and protocols. Will that work in this case?

SENATOR HARKIN: I believe so. We have a history of, Conventions on the Rights of the Child, for example. The U.N. Declaration on Human Rights. Plus almost every country has signed up to the International Labor Organization, ILO Convention 138, which spells out in quite specific detail prohibitions against child labor. So in many of these countries they've already signed on to this. We just want them to live up to the letter of the law.

PORTER: You mentioned the Convention on the Rights of the Child. We are one of two nations that are not on-board. What are the chances the President's going to send this to the Senate, and then what would happen after that?

SENATOR HARKIN: Well, the problem is under our constitutional system of government, since we don't have a parliamentary system, for example, the President, as executive can sign it, but it must be ratified by the Senate. And the fact is the Chairman of the Senate Foreign Relations Committee, Senator Jesse Helms of North Carolina, has said he is opposed to the Convention on the Rights of the Child. And would not push it, would not let it go through. So right now we're at a stalemate now and hopefully something will change and perhaps we'll get a different chairman or something like that and we can get it through. I would point out that most of the provisions in the Convention on the Rights of the Child we adhere to in this country. With a couple of exceptions. But I think that we could deal with those.

PORTER: During a human rights address at The University of Iowa, Senator Harkin said he's working on new legislation which would allow clothing manufacturers to voluntarily join a child labor inspection program. Those who pass inspection could use a special label indicating that their products were made without child labor.

SENATOR HARKIN: This labeling I think is necessary for three fundamental reasons. First, it takes a comprehensive approach. Government can't do it alone, Department of Labor can't do it alone, human rights groups can't do it alone. We have to attack it from all fronts and I think by enlisting consumers we could help. Second, labeling is based on choice. Companies can choose whether or not to use the label; they don't have to if they don't want to. And by being fully informed consumers can choose to vote against child labor with their pocket book. And I think this consumer information could be a powerful part of a comprehensive approach against child labor. And the third reason I think labeling is, will work, is because it's practical. We have experience with it. An initiative called "Rugmark" for hand-knitted Oriental carpets has been very successful. They have exported over 630,000 rugs world-wide with a label that ensures that consumers who buy it, that these carpets were not made by children. And so it's working.

PORTER: Absent some international protocol, we are the biggest importer. What is it that we can do in this country to make a difference in child labor?

SENATOR HARKIN: One of the biggest things is just not, either not import items made by oppressive child labor, but secondly, to have a system of labeling. To promote a system of voluntary labeling where a company could take a label that's internationally recognized, that everyone would agree on, put it on a piece of clothing or tennis shoes or pants or whatever it might be, sporting goods, and that way you would know that that article was not made by child labor. Because in order to get that, or put that label on a company would have to agree to unimpeded, unannounced inspections at any of its plants any time in the world. Well such a thing is happening right now with soccer balls. In Pakistan. Ninety percent of the soccer balls in the world are made in Pakistan in a little area, mostly by kids as young as 4 years of age. We have in the last couple of years entered agreements over there to get them out, and they're going to use a label. On soccer balls. So you will know that if you buy a soccer ball with that label it was not made by child labor.

PORTER: There's been a successful effort to do this with rugs, right?

SENATOR HARKIN: Absolutely. And this is where I got the idea. There's a label called "Rugmark." It was started by a non-governmental organization in India. And it's grown substantially and so that in the carpet industry, mostly they've been doing it in Europe. And it's now hitting America. And they have this label that they sew on the back of carpets. It has a number on it and so they know where it came from. And any carpet manufacturer that wants to use that label has to agree to unimpeded inspections at any time. And right now—and this Rugmark is only just a few years old, I am sorry, maybe 4 or 5 years old—they're now up to over half a million carpets now sold with the Rugmark label. And it's just escalating. Because consumers now are demanding it. They don't want to buy a carpet made by eight and nine-year-old kids. And so I visited some of the plants in Nepal and where they have the Rugmark label. And they're making money.

PORTER: Senator Harkin has actually taken part in the inspection regime for Rugmark. It's the same kind of program he wants extended to clothing manufacturers.

SENATOR HARKIN: We have labels, and when you buy a shirt you know the label says, it has to say what the contents are; how much cotton, rayon etc. is in it. It also has to tell you what country it's made in. But there's no label that says "this is child labor free." Like the Rugmark label. It would be a very simple thing to do. And so part of my trip to Bangladesh we went to Nepal afterward and the Nepalese people, carpet people, were telling us, "Well, we don't have that problem. We don't employ kids." Well, I knew of a young man who had been a child laborer and we set up a surprise visit. 'Cause obviously if you, if they know in advance you're coming they'll get the kids out. Well this young man who'd been a child laborer but who now works for human rights organization, a non-governmental organization, said he knew of a plant, he thought the owner would be away, he knew the guard at the gate and he could get us in. So on a Sunday evening, just about the time darkness was falling, we climb in this little car, drive to the outskirts of Katmandu and go up to this gate. And first thing I noticed outside the gate was this sign in both Nepalese and English: "Child labor under the age of 14 is strictly prohibited." Had it posted right outside. So I took a picture of it. Well, the guard let us in and we went in and this is what we found: Here's the kids. Some of these below ten years of age; a lot of them 10, 9, 8, 11 years old. All these kids working in rows and rows. So I started taking a lot of pictures and wouldn't you know it the owner showed up. We thought he was gone, he wasn't and he was quite upset. Very contentious and of course we had to leave, but he couldn't take my camera. And the next day we went to another carpet place in Katmandu that uses the Rugmark label. No kids, all their carpets had the Rugmark label on them, and they market 'em. So don't tell me it can't be done. And I must say that the carpet plant that uses the Rugmark and doesn't employ kids happens to be quite profitable. I mean they are making money. It's just that these places obviously are making scandalous profits off the use of their kids.

PORTER: One last question for you. We do have a child labor situation in this country. Sometimes it involves sweatshops; often times it involves migrant workers. What can we do about that?

SENATOR HARKIN: Well, sad to say that is true. We do have it in this country. What we have to do is to continue to beef up our enforcement and to use whatever law enforcement methods we have to detect 'em and to crack down on these people. We have the laws against it and every time we find it prosecution is pretty swift. The one area where we really have to stop this is in migrant labor. And these kids working in these fields. It's so widespread and we just haven't had the enforcement abilities but Secretary of Labor Herman has started a new effort this year. She calls it "Operation Salad Bowl." To put more inspectors out in the field to get these kids and to go after the owners for allowing that to happen. I mean, they know who's working in those fields. And so hopefully we'll have some success this year in really tightening down on this one.

PORTER: That is U.S. Senator Tom Harkin. For Common Ground, I'm Keith Porter.

Cassettes and transcripts of this program are available. The transcripts are free; cassettes cost $5.00. To place an order or to share your thoughts about the program, write to us at: The Stanley Foundation, 216 Sycamore Street, Suite 500, Muscatine, Iowa 52761. Be sure to refer to Program No. 9821. That's program #9821. To order by credit card, you can call us at 319-264-1500. That's 319-264-1500. Transcripts are available on our Web site. Go to commongroundradio.org. Our e-mail address is commonground@stanleyfdn.org. Again, cassettes are $5.00 and transcripts are free of charge. For Common Ground, I'm Jeff Martin.

B. J. Liederman created our theme music. Common Ground was produced and funded by the Stanley Foundation.


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