[asia-apec 97] "Globalization" and its Implications on Trade of Labor

[daga]

"GLOBALIZATION" AND ITS IMPLICATIONS ON TRADE OF LABOR
by May-an Villalba

(This paper was submitted to the Social Sciences Institute, Socialist
Republic of Vietnam for a consultation on migration of women and foreign
invested companies in Vietnam, 1994. May-an was then Director of the Asian
Migrant Centre, Hong Kong.)

I. Features of "globalization"

It is fashionable to speak of globalization as if it is already an
accomplished fact. With the demise of East European socialism and market
liberalization in socialist Asia, it would seem that international capital
has finally achieved what Marx called its historic role -- that of breaking
down all national, credo, religious, political, cultural, territorial and
other barriers. It would seem that international capital has finally
globalised all relations.

In truth, "globalization" is more myth than reality. Even among TNCs which
are its main proponents, globalization is much more a convenient slogan than
a real aspiration. If globalization benefits a TNC, that TNC will sing paens
to it. But when real globalization cuts the bottom line, they will cry
"national protection", "import quotas", "local component requirement",
"higher interest rates", "labor standards", "human rights requirements", etc.

The recently concluded Uruguay Round was primarily about protecting European
and American markets. It was not about "opening markets" to the Third World.
World trade is still dominated by one third of the globe represented by
Japan, US and the EC. The Third World (which represents 70% of the globe)
was nowhere in the GATT picture. Uruguay Round negotiations was about
opening markets only to the big trade competitors, specifically a few large
trading TNCs. This is globalization of TNCs and not real globalization.

This "globalization" is a reality that benefits a few hundred giant TNCs and
nothing more. For the rest of the world, "globalization" is an expensive
illusion. It means "cut-throat competition", non-access to markets, lack of
new and real investments, national competition of workers, loss of national
sovereignty, "negative net transfer of resources" from south to north, etc.

Richard Barnet and John Cavanaugh published an article in Third World
Network Features (115793) describing the phenomenon of globalizing TNCs thus:

"By acquiring earth-spanning technologies, by developing products that can
be produced anywhere and sold everywhere, by spreading credit around the
world, and by connecting global channels of communication that can penetrate
any village or neighborhood, ... (TNCs) are becoming the world empires of
the 21st century..."

"A relatively few companies with worldwide connections dominate the four
intersecting webs of global commericial activity on which the new world
economy rests: the Global Financial Network, the Global Cultural Bazaar, the
Global Shopping Mall, and the Global Workplace....

Further:

"The Global Financial Network is a constantly changing maze of currency
transactions, global securities, Mastercard, Euroyen, swaps, ruffs and an
evermore innovative array of speculative devices for repackaging and
reselling money. This network is much closer to a chain of gambling casinos
than to the dull gray banks of yesteryear... Banking activities have become
more global and more speculative. The credit needs of billions of people and
millions of small businesses are not met...

"The Global Cultural Bazaar is the newest of global webs and the most nearly
universal in its reach. Films, TV, video, radio, music, magazines, T-shirts,
games, toys, theme parks are the media for disseminating global images and
spreading global dreams... Centuries old ways of life are disappearing under
the spell of advanced communication technologies...

"The Global Shopping Mall ... is a supermarket with a dazzling spread of
things to eat, drink, wear and enjoy. Dreams of affluent living are
communicated to the farthest reaches of the globe, but only a minority of
people can afford to shop... The rest are window shoppers...

"The Global Workplace, is a network of factories, workshops, law offices,
hospitals, restaurants and all sorts of other places where goods are
produced, information is processed and services of every description are
rendered. Everything ... contains materials from dozens of countries pieced
together in a globally-integrated assembly line... A worldwide labor market
for ... every other marketable skill ... coexists with a global labor pool
waiting to be "contracted"...


II. "Globalization" and the polarization of Asia

The forced "globalization" of Asia, is creating conditions for rapid
economic polarization of Asian countries. A few countries, historically
favored by both Japan and the West, have risen to become NICs (Newly
Industrialized Countries). Serving as cheap production bases for Japanese
and Western manufacturers in the 60s and 70s, and granted preferential
access to aid, investments and to to European and American markets (also as
a means to "contain communism"), the NICS were able to grow consistently for
a period of some twenty years.

On the other hand, "socialist" Asia -- China, Vietnam, India, Sri Lanka
remained isolated from global investments, markets and technology and have
remained largely underdeveloped. (That is not to say that there has been no
industrialization in countries like China and India.)

The integration of "North" (industrial) Asia into the global market, and the
isolation of "South" agricultural, underdeveloped, "socialist" Asia has
created an effective division, which is the basis for labor trade in the
region, which is roughly estimated to be in the region of five million and
still growing.

These conditions include, on one hand, "push factors" in the "South" for
labor trade.

Ali Taqi, chief of staff of the International Labor Organization (ILO), was
reported in a HK newspaper in 9 Feb 94 to have issued a report stating that
820 million people, majority of whom are from Asia, are unemployed or are
underemployed.

The implication of this is that there are hundreds of millions of people in
Asia who cannot find economic well-being within their national borders while
across the border are other countries that promise jobs and economic
security.  Poverty and the lack of jobs (of the magnitude suggested by ILO)
are push factors for massive labor migration.

On the other hand, there are "pull factors" for labor trade.

An economic intelligence report from the Political and Economic Risks
Consultants (PERC) published in a HK news report on 19 Feb 94 suggested that
Asia (i.e., "North" Asia) is no longer the cheapest place for foreign
investors. Rising property rates, rentals and wage costs have placed Asia
(meaning Japan, the NICs, the new NICs including southern China, Indonesia,
Malaysia, Thailand) above or at the same rate of structural costs as the
Americas and Europe. This rising cost structure, PERC went on to say
reflects the "shift away from Asia's role as a cheap production base for
exports to the West, to its new role as the world's most rapidly growing
market."

In addition, the report stated that Japan, and all the old and new NICs are
facing serious labor shortages. Even Thailand and Indonesia which have
plenty of cheap and unskilled labor are facing shortages in experienced and
skilled laborers. South China too has experienced labor shortages, which is
causing massive migration of rural workers to Guangzhou and Jiangsu, the
industrialized provinces of China.

The demands of global competition for Japan and the old and new NICs,
neccessitate the importation of labor. This is surprisingly a hard fact for
Japan and the NICs, both of governments and workers organizations, to
accept. Surprisingly because labor trade (at least, export of labor) has
been a part of official policy of  these countries since the 70s. After all,
Korea was once a top exporter of workers too. Import of labor seems to be
another matter altogether.

In order to compete in the world market, many corporations in Japan and the
NICs especially the larger ones, have already relocated production overseas
or across borders -- Southeast Asia and China.

But the small and medium companies in both Japan and NICs, especially those
that are export-oriented, and a great many still are, cannot compete without
cheap labor which is no longer available locally. Thus. the need to import
labor.

Through the lobby work and pressure tactics of associations of small and
medium companies, Japan and the NICs are slowly opening up to labor imports
even in competitive sectors -- in manufacturing and services.

Some examples can be given:

The governments of Indonesia and Malaysia have signed an agreement that
would facilitate the importation of some one million Indonesian workers to
Malaysia. The Indonesian workers will work in construction, electronics,
health and in plantations. This will bring to two million, the number of
foreign workers in Malaysia.

In Singapore, which already depends on a 30% foreign labor force is
experiencing acute shortages of clerks, sales and secretarial positions even
with monthly salaries offered in the range of US$628.

South Korea, which has a policy of not accepting foreign workers, has been
forced to recognize 20,000 illegal foreign workers because of the severe
shortage of construction workers and workers in the manufacturing sector.
The KFSB, an association of small and medium sized companies, is requesting
government to allow 20,000 more foreign workers to enter every year.

Taiwan which is conservatively forecast to have a labor shortage of 283,000
towards the end of this century is currently revising its Foreign Labor
Regulations Law to allow for more foreign workers to work in Taiwan. The ban
on foreign domestic workers is to be lifted in June 1994.

In Hong Kong, the Legislative Council was discussing a scheme to import
1,000 professionals from the mainland.

In China, the government has set up a scheme involving eight provinces in
which 130 million surplus rural workers will systematically be integrated
into factories in Guangzhou and Jiangsu, which are currently experiencing
labor shortages.


III. Implications to worker relations

Marx' slogan "Workers of the World Unite" is still a valid battle cry
because as long as capital is able to exploit the inequalities of workers
(expressed in national, cultural, linguistic, political differences) no
"workers' state" can be consolidated anywhere. Because of the law of uneven
development of societies, the implication is that no socialist state can be
consolidated in isolation from other states.

While accepting therefore that nation-states are the only existing mechanism
by which workers can protect themselves from capital today, it must be
pointed out that workers in Asia cannot have a "nationalist" bias against
"foreign workers". It has been the near-universal experience of migrant
workers to be discriminated against by workers movements and trade unions in
many host Asian countries. It has been the universal feeling of trade unions
to be hostile to foreign workers. In many countries, "foreign workers" are
unfairly considered as "international scabs".

There is a need for workers to reexamine the basic principles of workers
solidarity. If they consider foreign workers as "scabs" what were they when
they accepted foreign companies into their countries? Weren't they
international scabs in a sense, to accept "foreign capital?"

In conclusion, the implication of this to workers solidarity is that an
internationalist (non-nationalist) worker consciousness needs to be
developed in the host countries so that migrant workers are protected from
national discriminatory laws or from no laws. At the same time, workers from
different countries must begin to develop experiences of struggle and
collective bargaining across borders, if they expect to overcome migrant
capital in the future. 
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