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Amid continuing economic crisis in East Asia, together with demonstrations in Kuala Lumpur for democratic reforms in Malaysia and the arrest of demonstrators, leaders of the Pacific rim economies met with business representatives at an exclusive resort complex outside Kuala Lumpur. It was the annual attempt to expand the Asia Pacific Economic Cooperation Forum's agenda of trade and investment liberalisation. Besieged Prime Minister of Malaysia, Dr Mahathir Mohamad, was the APEC's host.

In the same week the opening of the Asia Pacific Peoples' Assembly (APPA) in Kuala Lumpur was addressed by Dr Wan Azizah, the partner of jailed former deputy-Prime Minister Anwar Ibrahim. There were over 700 local and international representatives of labour, women's, environment, indigenous, human rights, church and other nongovernment organisations. They were there to challenge the APEC agenda of unfettered liberalisation and to assert people's rights in the context of the East Asian economic crisis. Speakers at the APPA summit criticised the elitist and undemocratic nature of APEC and its failure to address the social impact of liberalisation. The Assembly examined the latter in the context of the economic crisis, at meetings on a series of topics including human rights, workers' rights, indigenous people, the environment, and privatisation and financial deregulation.

Dr Wan Azizah spoke of her support for one of the key themes of the Assembly: the restructuring of the international financial systems to take the decision-making out of the hands of a few. She noted that Dr Mahathir agreed with this approach internationally for institutions like the International Monetary Fund (IMF), but was opposed to similar change at the national level. She urged support for the struggles against arbitrary arrest and for democratic reforms in Malaysia.

These twin themes of democratisation of national and international political and economic institutions recurred throughout the discussions and activities of the People's Assembly. Speakers including Walden Bello analysed the economic crisis and the impact of the IMF programs. They noted that most economists and even the World Bank now regard the IMF conditions imposed in return for emergency loans as having worsened the crisis.

The crisis was caused by unregulated speculative investment and profligate borrowing by private banks and corporations, not by government borrowing. The IMF programs were aimed at ensuring repayment of private debt to banks, restoring investor confidence, and removing restrictions on foreign investment. The programs cut government expenditure and public employment and reduced demand at a time when the private sector was in shock, further shrinking economies and worsening unemployment. All the programs have now been revised to permit some expansion of government expenditure, but this has not prevented unemployment levels of up to 14 million in Indonesia, 2 million in Korea, 1.5 million in Thailand, and over 1 million in the Philippines. In Indonesia, the crisis has coincided with drought which has brought crop failures, leading to food shortages and malnutrition.

The crisis has had contradictory impacts on APEC. There were many new faces at the leaders' November meeting. The crisis and the impact of International Monetary Fund programs in the region have resulted in changes of heads of government in Thailand and Indonesia, and in changes of ruling parties in South Korea and the Philippines.

The IMF programs have enabled the APEC neo-liberal agenda of accelerated trade and investment liberalisation to be imposed rapidly on those countries which have sought IMF loans. However, the crisis has forced other governments to slow the pace of liberalisation. APEC has been used in the past to reach agreement on rapid tariff reductions in sectors like information technology equipment which then form a precedent for global agreements through the World Trade Organisation. The 1998 meeting failed to reach agreement on the nine sectors which had been identified in 1997, with Japan and Malaysia leading the resistance.

The meeting also aired the debate which is being taken up globally about the role played by unregulated, portfolio capital investment and currency speculation in the causes of crisis, and in continuing global economic instability. United States, Australian and New Zealand representatives were, predictably, implacably opposed to any forms of international financial regulation. Malaysian government representatives defended their decision to introduce controls on currency speculation, and Chilean representatives explained their government's requirements of minimum time periods for portfolio investment. The fact that this debate had to be conducted at APEC reflects the crisis in credibility of deregulated financial markets. Prominent neo-classical economists and the World Bank are now contemplating the need for some regulation of capital movements and currency speculation. The IMF has also suffered a loss of credibility because of the impact of its programs and their subsequent revisions. There was no agreement reached on these issues.

This debate was taken further at the alternative APPA conference, where matters discussed included the need for new forms of more democratic international financial institutions as well as new forms of regulation.

The issue of taxation of transnational capital was developed by a French organisation called the Association for Taxation of Financial Transactions to Assist Citizens (ATTAC). It wants to build on the success of the global movement against the Multilateral Agreement on Investment, an OECD initiative to further liberalise transnational investment which failed in 1998 in the face of determined opposition at national and international levels. It is seeking support in the Asia Pacific region for a movement to pressure national governments to agree on a common set of taxes on transnational capital. This would include a Tobin tax on currency speculation, and taxes on transnational corporations to prevent the wholesale tax evasion they currently achieve through transfer pricing and other means. Our challenge is to make proposals like these part of the taxation debate in Australia in 1999.

The alternative summit heard reports of the impact of the crisis on labour conditions in the region, and attempts to challenge the dominant pressures. In South Korea, the IMF program demanded an expansion of employers' rights to dismiss workers and to use casual workers employed on individual contracts by labour hire firms. The South Korean independent union movement, the KCTU, has developed a series of alternative proposals to the IMF program. It has attempted to negotiate with the Government and has organised national industrial campaigns, including national strikes in May and July 1998. Over 100 union leaders and activists have been arrested under laws which still outlaw many forms of industrial action. However, the KCTU has continued to organise -- most recently a rally of 50,000 people in Seoul on 8 November, 1998.

Employers have also gone on the offensive in the Philippines, where casualisation and contract labour are also increasing, and whole workforces have been dismissed or threatened with dismissal in order to de-unionise them. The most blatant case of this was the Philippine Airlines (PAL) dispute. PAL was partially privatised in 1994, with controlling shares going to a crony of the then government. The airline's profitability declined following privatisation, and in 1998 it attempted redundancies of pilots. This led to an industrial dispute. The management response, with active support from the newly elected Estrada Government, was to threaten to close the airline and dismiss all workers. Under this threat, the workers agreed to give up collective bargaining rights for ten years. The airline is now being managed by Cathay Pacific. The unions sought and got some international support from other unions, but it was not sufficient. They also sought redress unsuccessfully under the Philippines labour law and are pursuing a case before the ILO. This attempt to de-unionise by dismissing an entire workforce is disturbingly familiar to Australians, following the Maritime union dispute, and shows the strength of the employer offensive against unions in the context of the crisis.

The challenge to APEC orthodoxy at the alternative forum also came in the form of practical politics. The struggle for independence in East Timor was actively supported at the APPA by two events. The first was the launch of a civil legal suit against the Malaysian government for illegal arrest and detention of participants at an Asia Pacific Conference on East Timor held in Kuala Lumpur in November 1996. This is a courageous challenge to the government in the context of the current arrests and repression of dissent.

The second was the holding of a technically illegal assembly at the Indonesian Embassy in Kuala Lumpur to commemorate the seventh anniversary of the Dili massacre in East Timor. Both international and Malaysian APPA participants attended. Speakers demanded the release of Xanana Gusmao, the East Timor leader who was captured in 1992. The police presence notwithstanding, no-one was arrested.

A second illegal assembly, of about 200 APPA participants, was held outside the twin towers shopping centre in the heart of Kuala Lumpur, on the final day of the APPA conference. This was more challenging to the authorities, as speakers addressed the issue of human rights abuses in Malaysia as well as the failure of APEC to address these issues. Again, despite a heavy police presence there were no arrests.

The restraint by the police at these events was attributable to the involvement of foreigners and presence of the international media. This was highlighted by the fact that a demonstration at the same shopping centre by Malaysians later in the day was met by water cannon and arrests. One of the main conference organisers, labour activist Tian Chua, was arrested the week after the APEC and APPA conferences, when international participants and media had departed. He has since been released on bail. The trial of Irene Fernandez, another prominent conference organiser, was in progress before the conference. She is facing charges under Malaysia's restrictive media laws because she published a report about conditions of migrant workers awaiting deportation in detention camps.

The APPA conference provided an opportunity for activists in the region to show practical solidarity with the democratic movement in Malaysia, and to build networks for future solidarity actions. Immediate international protests against the arrest of Tian Chua after the conference increased the pressure on the Malaysian government.

The conference statement reaffirmed the universality and indivisibility of human rights enshrined in the various United Nations and International Labour Organisation Conventions. These were being breached with relative impunity by many states in the region in the context of the crisis. The challenge is to organise efforts at the local and national level and to form solidarity links across the region. The People's Assembly is part of this process.

Patricia Ranald is Senior Research Fellow in the Public Sector Research Centre at the University of New South Wales
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Publication:Arena Magazine
Date:Feb 1, 1999

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