[asia-apec 1186] New Kid on APEC Block

[ALARM]

Vietnam: New Kid On APEC Block No Stranger To $(C(BThe Market$(D(B
(This introductory article has drawn heavily from Gerard Greenfield$B(Bs
excellent papers on Vietnam)

Behind the entry of Vietnam into APEC is a story of restructuring, labor
rights violations,  starvation wages, appalling health and safety measures,
export processing zones, and transnational corporations like Nike, Samsung,
and Daewoo, for example, taking advantage of  $(C(Bcheap labor$(D(B. Open-air labor
markets made up of hundreds of thousands of day laborers hoping for a
meagre day$B(Bs pay are to be found on the edge of major towns and cities.  Is
this what they mean by $(C(Bflexibility$(D(B of the labor market?  The neoliberal
reforms in Vietnam tell a familiar tale of massive joblosses, deregulation,
and a widening gap between rich and poor  and the fightback by militant
workers against exploitation and greed.

The government is nominally Communist,  but politicians and their advisors
use the same sort of neoliberal rhetoric used to sell the market economic
model by governments the world over.  Short-term sacrifice for long-term
benefits.  Empty promises of skilled jobs and technology transfer even as
the country is used as a dumping ground for outdated machinery and
equipment which can$B(Bt be used anywhere else. The justification of downward
revision of national labor laws and regulations in the name of labor
$(C(Bflexibility$(D(B.  This, it seems is the development of a $(C(Bmarket economy with
a socialist orientation$(D(B, as it has been described.

One leading economic advisor to the government, Nguyen Khac Hien, says:
$(C(BThe market and market economy are the common achievement of human
civilisation.  The market came into existence before capitalism, and
continues to exist in and after capitalism$(D(B.  Sound familiar?

According to an April 1999 review of World Bank data, with the exception of
rice (Vietnam is the second largest exporter of rice after Thailand),
prices for its major exports since 1985 have fallen consistently and look
set to continue to decline in the future.

Gabriel Kolko writes: $(C(BGiven the huge world excess overcapacity in
processing and industry, Vietnam cannot diversify its exports away from
commodities.  By persisting with a strategy of export-led development, as
the IMF and World Bank insists it does, Vietnam is aggravating the social
problems it has created since 1986 with a fundamentally flawed economic
strategy that will not solve the compounded problems in its society and
economy.  This is a sure recipe for a crisis in the very near future.$(D(B  

Meanwhile, the Asian Development Bank$B(Bs 1998 Annual Report had this to say:
$(C(BWhile Vietnam continued to develop the legal and regulatory frameworks
that are needed for the functioning of the private sector and of a market
economy, such reforms can be further accelerated.  Further liberalization,
transparency, accountability, and streamlining of procedures will be needed
to attract foreign investment$(D(B.  The ADB also called for restructuring the
banking sector and pushing on with the process of $(C(Bequitization and
divestiture$(D(B of State Owned Enterprises. And the ADB provided a
policy-based loan in support of the Vietnamese Government$B(Bs Agriculture
Sector Program which has focused on trade liberalization in input and
output markets.

And what of the workers? 

In 1989, the $(C(Bsmall shock therapy$(D(B saw over a million workers in the state
sector lose their jobs, under the Surplus Labour Redistribution Programme,
along with wage reductions and the introduction of piece-rate wages and
individual wage incentives.  State farms and rural cooperatives collapsed.
These policies gave managers the power to slash the workforce by whatever
number was deemed necessary to become profitable. Between 1989 and 1995,
the number of state-owned enterprises declined from 12500 to 4000.

Meanwhile many state-owned enterprises and assets, and farm lands have been
appropriated by the domestic elite  bureaucrats, Party officials and
military officers.  Directors of state-owned coal companies have made
massive private profits from operating illegal $(C(Bbandit$(D(B mines, notorious
for their high rate of accidents and deaths among the desperate workers who
earn only a small fraction of the wages of state sector miners, while
undercutting the collective power of state sector miners by hollowing out
production.  

By 1998, 350,000 workers were employed in 41 Export Processing Zones or
Industrial Zones.  Since early 1997 the government had allowed 100%
foreign-owned EPZs.  In both EPZs and IZs there is very little state
regulation  conditions are made as appealing as possible in order to
attract foreign investment.  Life for the workers in the zones  often young
women from rural areas- is characterised by a militarised, brutal
production regime for the benefit of a partnership between the Party-State
elite and overseas capital.  In spite of the repressive atmosphere of the
Zones, and often no thanks to the closely Party-aligned union officials,
widespread strikes have been occurring against exploitation and labor
rights violations.  Verbal and physical abuse by management, forced
(unpaid) overtime, punitive fines for being caught going to the toilet or
resting have been commonplace. 

July 1997 saw the introduction of the compulsory labor scheme which
requires all male workers between the ages of 18 and 45 to $(C(Bdonate$(D(B their
labor to the construction  of roads, highways, bridges and Industrial Zones
for several days a year  without pay.  These infrastructural projects
mostly World Bank of Japanese Government-funded, are primarily for the
benefit of local and international capital.  The wealthy can opt out of the
scheme by making a donation to the state. 

By 1998 there were over 10 million workers unemployed in Vietnam. Many
thousands of workers in foreign-invested factories have been laid off as
East and Southeast Asian companies sink deeper into financial crisis.
Garments and footwear workers, where South Korean and Taiwanese companies
are the main investors, have been very badly hit.  The Korean-owned garment
factory, Juan Viet Co. sacked 2000 workers in the last quarter of 1997, and
another 500 were dismissed at the start of 1998.  Bankruptcies of companies
have led to lay-offs and failure to pay wages and bonuses in many
instances. Bankrupted foreign companies like the South Korean Ssangyong
Corp., have sued state-owned banks and state enterprises in Vietnam for
millions of dollars owed in overdue letters of credit.  Meanwhile, as
production costs in other SouthEast Asian countries spiralled downwards as
the economic crisis continued, pressure to cut costs has come down hard on
Vietnamese workers and their workplaces.  The crisis is being literally
passed on to workers employed through subcontracting networks, a web of
small and medium enterprises through wage freezes, withheld bonuses, and a
reduction in working days with a commensurate cut in pay.

Although the Labour Code which came into effect in January 1995 requires
150% overtime pay and 200% on holidays and Sundays, many workers have found
themselves severely underpaid and unpaid.  Company directors have refused
to sign collecftive bargaining agreements which are required under the
Labour Code.  Many foreign companies and joint ventures have blocked
workers from organising trade unions.  And where unions have been formed,
many are controlled by management.  The code recognises the right to strike
yet in essence striking has been criminalised.  That is to say that the
requirements of the law on strikes and Party  decrees state that almost two
months of arbitration and negotiations with employers or state enterprise
managers should be undertaken before any action by workers is possible. The
arbitration process itself is weighted in favour of employers and managers,
and prioritises economic growth and national interests over justice for
workers. Any strike may be stopped by order of the Prime Minister, and
strikes are not allowed in strategic industries. 

With the failure of official trade unions in many cases to respond to
workers$B(B demands for genuine representation, Vietnam has seen a recent
growth in popular $(C(Blabour associations$(D(B in many sectors. These grassroots$B(B
workers organisations have sprung up in the absence of official union
assistance and sometimes in direct confrontation with them. 

Perhaps the World Bank$B(Bs 1995 report on Vietnam best exemplifies how
multilateral institutions and the agencies for global capital have denied
the reality of Vietnamese workers.  It praises how workers in the private
sector are hired on short-term contracts to $(C(Bmaintain employee motivation
and to minimise problems in releasing workers if need be$(D(B.  Though there
were nearly 200 strikes involving workers in foreign-invested factories in
Vietnam by 1995 with many cases of unpaid wages, unfair wage deductions,
forced overtime, beatings, verbal abuse, corporal punishment, sexual
harassment, and rape, the World Bank report stated that there was: $(C(Bno
evidence of abusive labour practices or unsatisfactory working conditions.$(D(B 


==================================
ALARM Project
c/o Asia Monitor Resource Center
444 Nathan Road, 8-B, Yaumatei
Kowloon, Hong Kong
Tel: (852) 2332-1346  Fax: (852) 2385-5319
E-mail: alarm at pacific.net.hk / amrc at pacific.net.hk
URL: http://home.pacific.net.hk/~amrc
==================================