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International Forum >> The Democracy Forum for East Asia>> Inaugural Conference
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Introduction
Session I: Providing Democratic Leadership Session II: Conflicting Interests and Strategies of Governmental Actors in Effecting Economic Reform Session III: Civil Society’s Response to the Economic Reform Agenda Agenda Participants |
Session III: Civil Society’s Response to the Economic Reform Agenda
The economic crisis has galvanized civil society into action in the countries most seriously affected by the crisis. Predictably, organized groups such as business and labor that have an enormous stake in the reform outcome have been most active in voicing their views and, in the case of labor, in expressing them through such actions as demonstrations and strikes. They have also tried to use the mass media to communicate their positions to the public and to elicit its support. But what has been most extraordinary is the role of civic organizations in getting directly involved in economic reform itself, including such issues as privatization of state enterprises and corporate governance. In the wake of the economic crisis in Korea, business and labor accepted the government’s offer to participate in the Tripartite Commission, which sought to establish a framework for a business-labor-government agreement on such key issues as increasing flexibility in the labor market (by making it easier to lay off workers), and legal recognition of the unions’ right to engage in political activity. An initial agreement was reached among all three parties, but labor subsequently walked out of the Commission, accusing the government of not honoring the initial agreement and of supporting business over labor. As a result, the labor unions have become more hostile toward economic reform and more militant in their demands for labor protection. With the recent lifting of the law that prevented labor unions from engaging in political activity, the more militant of the two major ones—the Korea Federation of Trade Unions—formed its own political party and planned to field candidates in the April 2000 elections for the National Assembly. This development led to an announcement by business conglomerates that they too would step up their political activity to counter the influence of labor. The crisis has precipitated the politicization of important sectors of civil society, which in the long run may contribute to the development of democracy by opening the political process to differing points of view. One important development of this crisis has been the engagement of civic organizations in economic reform. A case in point is the effort of civic organizations in Thailand to prevent the sale of state enterprises to foreign companies under the International Monetary Fund regime. But even more remarkable has been the role of civic organizations in Korea in spearheading the reform of corporate governance by challenging not only the government, but also the all-powerful Korean conglomerates known as the chaebol. The most prominent example is the movement launched by one of the leading civic organizations in Korea—the People’s Solidarity for Participatory Democracy—to protect the rights of small shareholders. The People’s Solidarity wants to use the issue of small shareholders’ rights to make the chaebol accountable to shareholders and, ultimately, to work toward the passage of legislation aimed at eliminating cross-shareholding, which enables chaebol owners to control their companies without being majority shareholders. Furthermore, the People’s Solidarity also is trying to pass legislation to prosecute violations of small shareholders’ rights in criminal rather than civil courts, where the chaebol can tie up cases almost indefinitely with their inexhaustible sources of funds for litigation. The People’s Solidarity’s actions have far-reaching implications for economic reform and for Korean society as a whole. One of the chief reasons for the economic crisis has been the reckless way the heads of Korean chaebol have expanded their businesses without showing much concern for profit. As a result, their debt simply got too large for them to finance and, thus precipitated the economic crisis. Despite the Korean government’s effort to reform corporate governance, the measures have been half-hearted and the government has not seen fit to prohibit cross-shareholding, which many see as the heart of any corporate governance reform. While even the government has feared to change the status quo, the People’s Solidarity has been audacious enough to challenge the chaebol’s power and influence over Korean society. Because the economic crisis has shaken the deeply held assumptions of Koreans about the very fundamentals of their society, civic organizations have taken advantage of the public mood in favor of reform to take bold initiatives toward reforming all aspects of Korean society—economic, political, and social. Democracy has made this possible, and no doubt the actions of civic organizations will help to further democracy itself. |
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