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An Intellectual Dialogue on Building Asia's Tomorrow

The Asian Crisis: Meeting the Challenges to Human Security

Tokyo, Japan
December 2-3, 1998

The Asian Financial Crisis: Human Security Dimensions

By Chia Siow Yue and Shamira Bhanu
Institute of Southeast Asian Studies, Singapore

Table of Contents

Social Effects of the Crisis

Policy Measures and Actions

Annotated Bibiliography

Policy Measures and Actions

In Individual Countries

Indonesia

The World Bank (1998b, 93) reports that one area where Indonesian government policy is visible is the back-to-school campaign. On July 20, 1998, the Indonesian government launched a five-year national program providing scholarships for poor children in basic education and block grants to schools serving poor communities. A coalition of ministers was formed to support the program. The World Bank is leading a multidonor effort, which includes the Asian Development Bank (ADB), UNICEF, and bilateral agencies (AusAID and the Asia-Europe Meeting) to support the program. The total cost of the program is about US$382 million, with an ADB contribution of US$86 million and the remainder from the World Bank. Forty percent of poor primary and junior secondary schools will receive grants of Rp2 million (US$250) and Rp4 million (US$500), respectively. Scholarships and grants will be allocated according to poverty incidence in each district. Given the limitations of the quantitative data, it will be coupled with local knowledge and the participation of NGOs and other members of civil societies to determine recipients at the local level.

The ILO (1998b) reports that in an unprecedented move, the government through the Department of Manpower (DEPNAKER), the employers through the Indonesian Chamber of Commerce and Industry (Kadin) and the Indonesian Employers Association (APINDO), and the workers through the Federation of All-Indonesia Trade Unions (FSPSI, the official trade union federation) came together in January 1998 to discuss and agree on the current manpower situation in Indonesia resulting from the crisis. Among the recommendations was a definition of the priority tasks of the tripartite institutions and bodies, to include maximizing harmonious employment conditions, minimizing layoffs, and negotiations between employers and employees in cases where layoffs are unavoidable. However, the meeting did not elaborate on how the recommendations would be pursued and implemented.

The World Bank (1998e, 40) reports that it has allocated funds toward a follow-up to the Indonesia Family Life Survey (IFLS). This will allow monitoring of the living standards of a subsample of households already surveyed in 1993 and 1997, and help assess household-level coping strategies in response to the crisis. Other initiatives by the World Bank include funding a US$275 million poverty project for rural areas, and a similar project for the urban poor is being planned. An agricultural Sector Adjustment Loan (SAL) to support the reforms is also being considered.

The World Bank has restructured some of the existing portfolio for Indonesia to redirect savings to support income generation and meet basic needs (about US$320 million). An SAL of US$1 billion includes a component to protect the poor through expanded labor-intensive public works programs, actions to ensure the continued availability of key goods with modest price increases, and initiatives to maintain access to basic education and health.

The government has responded to the problem of food security with an expanded subsidized rice program targeting poor families. To cushion the impact of food shortages on these families, the government has introduced measures to provide 10 kg of rice per each of up to 17 million families at a subsidized rate of Rp1,000 per kg. This response, however, can only meet part of the need, as a report by the Food and Agriculture Organization and the World Food Programme of the United Nations (as reported in McCawley 1998) estimates that the provision of 10 kg of rice for a family of five provides less than 20 percent of basic calorie requirements.

The extent to which alternatives to layoffs of workers have been implemented is unknown; whether such alternatives have been the subject of prior dialogue or consultation with the work force and its representatives is equally uncertain. What is known, however, is that with the rise in layoffs the FSPSI has set up a team to consult with and assist companies contemplating mass dismissals as well as to provide legal assistance to workers who are facing dismissal. The main objective is to promote the search for alternatives to layoffs, such as eliminating overtime, reducing working time, alternating work shifts, cutting production costs, and alternating home rest periods. The Indonesian Employers' Association is also providing a range of similar advisory services to its members, as well as trying to monitor the incidence of layoffs through its network of 27 provincial offices. A factor impeding dialogue at the enterprise level is that unions themselves have been weakened by the loss of membership resulting from layoffs. For example, the Indonesian Prosperity Trade Union (SBSI) has seen a reduction in its already limited resources and is unable to monitor the rate of layoffs of its own members. It is unlikely that the search for alternatives to layoffs is a widespread practice at present, particularly as many enterprises have no choice but to reduce workers owing to the severity of the crisis. Also, means of building labor-management trust and strong workplace cooperation have not been firmly institutionalized.

The government has announced (as reported in Kompas, 19 September 1998) that a national social safety net system (Jaringan Pengaman Sosial, or JPS) will be developed. The JPS is expected to contain the following four elements: (1) a food security program to guarantee the availability and affordability of food across society, with an emphasis on promoting local production of food as well as on the need for reliable distribution channels; (2) a labor-intensive public works program to reduce unemployment and at the same time encourage productive activities; (3) a social protection program to protect access to health and education facilities, including the provision of medical supplies directly to community health clinics as well as the provision of other services; and (4) the promotion of the people's economy, especially through support for SMEs and promotion of cottage industries in villages through such measures as training, extension and demonstration work, and promotion and partnership activities.

The government has also initiated a Rp33 billion crash program to create and upgrade the urban infrastructure in urban and semiurban areas for the first three months of 1998, employing labor-intensive methods to maximize the employment potential of such investment. This program is intended to create approximately four million workdays of employment, equivalent to 80 days of employment for 54,000 persons. For 1998-1999, allocations of Rp600 billion and Rp500 billion have been made for labor-intensive infrastructure projects in rural and urban areas and for labor-intensive forestry, respectively. These allocations are anticipated to generate about 103 million workdays of employment, or an average of 80 days of employment for approximately 1.3 million workers.

Malaysia

The Malaysian government has taken various proactive steps to adjust its fiscal policy in light of the crisis. These include

The National Economic Recovery Plan (National Economic Action Council, 1998) deals largely with the economic implications of the crisis, and also covers the social aspects and addresses several actions, including ameliorating the hardship from poverty; addressing bumiputra equity ownership; expanding employment opportunities; meeting the challenge of expanding tertiary education; addressing university graduate unemployment; controlling the influx of foreign workers; and protecting the environment. The plan urges decisive action and states that "an assessment of the progress in implementing the decisions taken under the plan should be made in September 1998 before the finalisation of the Budget 1999. In 1999 the assessment should be done on a quarterly basis."

In the measure to alleviate poverty, the plan lists assistance of M$200 million from the World Bank loan to provide microcredit assistance to small-scale traders and hawkers in urban areas. The government also intends to make smaller cuts to the 1998 budgets of ministries involved in providing the social safety net, such as the Ministry of Health, whose budget has been cut by only 12 percent. This measure also applies to ministries involved in the development of rural areas and agriculture, where most of the poor are found.

The plan recommends measures to increase opportunities for employment by encouraging organized and systematic small-scale trading, farming, and the establishment of small businesses. It also recommends a training scheme for newcomers in small-scale trading and agricultural activities, and the revitalization of construction and infrastructure projects with multiplier employment effects. Additional measures to expand employment opportunities include encouraging Malaysian companies to proactively win investment and increase export opportunities, and encouraging industries to institute part-time employment, pay cuts, and a reduction of working hours/shifts.

To buffer the poor against price increases and depleted real incomes, the plan recommends a number of strategies, including encouraging people to grow their own vegetables, importing cheaper food items from foreign sources, and increasing the number of supermarkets and retail outlets in the country, particularly market outlets for perishable goods and fruit. It also recommends improved handling of foodstuffs to reduce postharvest loss and better access for small and medium-scale food producers to display their wares.

On the strategy of protecting the tertiary education system, the plan makes some 29 recommendations in regards to maintaining levels of tertiary study. This is about three times the number of recommendations listed for the other areas of action. Recommendations include the following: not to recall government-sponsored students currently studying overseas, although the government will no longer sponsor students to study overseas and will encourage them to study locally; ensuring that there are enough students taking scientific and technological subjects and that bumiputra students are not in any way disadvantaged at higher educational levels; and addressing the issue of university graduate unemployment by encouraging new graduates to work in the agricultural and small-business sector or to work overseas.

The control of migrant labor is a priority for the government. The plan includes stringent measures to continue the freeze on foreign workers generally and to repatriate illegal workers and excess foreign workers. The plan states that "currently there are about 1.14 million legal foreign workers who constitute 13 percent of the labor force. The continued economic crisis in Indonesia is expected to increase the influx of foreign illegal immigrants and swell the pool of 800,000 illegal workers in the country" (National Economic Action Council 1998). To deal with this, the plan recommends that foreign laborers be charged medical fees and ward charges at market rates when they seek treatment in public hospitals and clinics, and that school fees charged to foreign students be equivalent to those charged by private schools. At the same time, the relevant authorities and mass media should not give undue publicity to the repatriation of foreign workers.

The response of the informed public, i.e., media, civil society groups, academia, etc., to the economic crisis has prompted calls for policy reassessments that go beyond immediate short-term adjustment measures. Several are outlined here.

The first concerns agriculture. The sharp rise in food prices has highlighted the country's dependence on food imports as a consequence of its neglect of agricultural production. Agricultural output is expected to grow by only 0.9 percent in 1998, and an estimated 633,753 hectares of agricultural land lie idle while the country spends M$9 billion on food imports. The indifference to the agricultural sector, including the plantation sector, was symbolized by the renaming of Universiti Pertanian Malaysia to Universiti Putra Malaysia in mid-1997, just on the eve of the crisis.

Second, the reliance on cheap foreign labor, which constitutes a quarter of the labor force, had already been criticized as hindering the development of a higher-value-added and technologically sophisticated industrial base. With the emergence of mass layoffs of migrant workers, and the difficulty in ensuring their repatriation, a security dimension has arisen in the public consciousness, adding fresh urgency to the call for a clear policy on foreign labor.

The third concerns human development issues. The inadequacy of national investment in health care, education, skills training and retraining, and housing, as well as the absence of an adequate social safety net for the poor, the elderly, and the unemployed, has been highlighted as a direct consequence of the economic crisis. This has acquired particular significance in light of the aging of the population structure, the urgent need for a better educated work force, and the increasing closure of emigration and employment opportunities elsewhere in the region.

The World Bank (1998b, 96) reports that its initiatives in Malaysia include undertaking surveys that will include an overview of poverty and the social safety net in Malaysia, as well as an analysis of how the poor may be affected by the downturn. The report will also recommend action to cushion the impact of the crisis on the poor. A US$300 million economic and social sector loan approved in June 1998 will support a reduction in the fiscal surplus from 2.5 to 0.5 percent of GDP by increasing public expenditures on the social sectors. The loan seeks to protect budgetary spending on education, health, and rural infrastructure and to increase expenditures on social safety net programs aimed at providing direct support to the poor (free housing and food supplements) and income generation through small grants. Longer-term issues about the adequacy of formal safety nets and the governance structure of the Employee Provident Fund will be addressed through a Technical Assistance Loan and economic and sector work.

Philippines

The World Bank (1998b, 96) reports that it carried out a rapid social assessment to gauge the effects of the crisis and understand household coping strategies. Poverty work scheduled for fiscal year 1999 will have access to the results of the 1998 Income and Expenditure Survey (FIES is carried out every three years) and contribute to the early implementation of the Annual Poverty Incidence Survey. This will provide a useful analysis of the impact of the crisis, evaluate the effectiveness of government policies to alleviate poverty, and provide policy directions for the future.

Thailand

The Nation (19 October 1998) reports that the government is gearing up to increase the safety net loans as the queue of applicants is getting longer. Under a government scheme to provide interest-free loans as venture capital, laid-off workers, financially troubled farmers, and aspiring vendors are eligible to apply for up to B15,000, to be paid back over a five-year period, to start up small independent businesses. As the economic crisis set in last year, workers flocked to avail themselves of the venture capital and within months the fund was depleted, leaving a long waiting list. For 1998, the government has allocated an additional B300 million as emergency funds. Although this is enough to assist 32,000 loan applicants, 72,319 people have already applied.

The World Bank (1998b) reports on the "Thai social fund," a US$300 million loan package for job-creation schemes in rural areas using existing labor-intensive government programs. This is in conjunction with loans from the Overseas Economic Cooperation Fund, the UNDP, and the Australian government. The loan is expected to create roughly one million months of jobs and an equivalent amount of training. The study also reported that a national poverty map will be drawn based on available statistical data and a nationwide systematic participatory assessment, which will be an important input for the policy debate on safety-net mechanisms. In addition, World Bank funding includes a budget to set up a monitoring system to evaluate the impact of the crisis and public action on the poor.

The ADB has extended to Thailand a US$500 million loan under the Social Sector Program Loan, of which an initial tranche of US$300 million has already been released, with the remainder to come in ten to 12 months. The ADB loan vocuses on three areas: the labor market, social welfare, and health and education. In the labor market, the policy priorities are the establishment of Centres for Assistance to Laid-Off Workers, the extension of social security coverage to the unemployed, the limitation of minimum wage increases, and the provision of tax incentives to private enterprises for investment in employee training.

The ILO (1998b) reports that Thailand's Ministry of Labor and Social Welfare (MOLSW) has taken a proactive stance in urging firms to delay layoffs by finding alternatives; by requesting that firms first notify the ministry prior to laying off workers so that alternatives can be considered first or, failing that, adequate outplacement services (e.g., retraining and job search) can be arranged under MOLSW's auspices; and by seeking to intervene prior to a firm's recourse to layoffs. Thailand's leading employer confederations also state that the search for alternatives to layoffs is common practice among their member firms. In August 1997, MOLSW launched a Centre for Assistance to Laid-Off Workers, a one-stop service center to help laid-off workers in the areas of severance pay, social security, placement and counseling services, training, and low-interest loans. In addition, MOLSW has created 15 teams of ministry officials that have attempted to assist enterprises in Bangkok and in the neighboring industrialized provinces in finding alternatives to layoffs. Also, the ministry has prepared a booklet outlining ways in which labor and production costs can be adjusted to avoid layoffs, and has hosted a number of tripartite seminars in an effort to diffuse knowledge on ways to preserve employment. The MOLSW initiatives will continue as part of the government's seven-measure program to address the crisis. While the MOLSW initiatives are clearly positive, there is no information available on their impact.

The Bangkok Post (19 October 1998) reports that the first-ever master plan on human resource development for production and service industries has taken shape. The Thailand Development Research Institute was commissioned by the Labor and Social Welfare Ministry to draw up the plan, which emphasizes enhancement of the quality of the work force. The draft plan has been finalized and will be submitted to the ministry for consideration before it is implemented by related agencies such as the Education and Industry ministries. The plan states that the overriding priority is preventing further contraction of employment while offering skills-improvement training to workers so as to increase their career opportunities and better their job-seeking prospects should they be made redundant. The government is urged to support human resource-oriented research to enable industries to become more reliant on local production technology.

Tambunlertchai (1998) reports that the Ministry of University Affairs has also enacted several measures to create jobs for recent university graduates. One project involves hiring students to work in village administration organization offices across the country to conduct surveys on the quality of life for the underprivileged, with regional universities acting as coordinators. Other measures include disseminating employment information, encouraging unemployed university graduates to further their studies at higher levels, and providing short-term training for graduates to acquire the necessary skills for employment or to set up their own businesses. For university education, the government sponsors a program of interest-free student loans, to be paid back in installments after graduation. The program has been in operation for several years but was not widely publicized or subscribed to during the boom years. Its high popularity during the past two years, however, has quickly depleted the educational fund.

The Bangkok Post (19 October 1998) also describes the voucher system introduced by the Bangkok Metropolitan Administration to support families unable to pay school fees and thus forced to take their children out of school. The city launched a pilot program to issue education vouchers designed to relieve and prevent overcrowding of city schools as well as to help private schools, some of which have seen enrollment drop sharply since the economic crisis. In some cases, the system gives students in overcrowded city schools a chance to study in private schools; in others it helps hardup parents keep their children in private schools rather than transferring them to city schools. However, the pilot program seems to be limited to five schools in the city area, and one of the schools involved is accepting only five vouchers. Many schools have declined to join the program because the voucher value is considered too low; however, the city administration has indicated that it intends to expand the program.

The crisis has forced the government to squeeze public spending on health, among other sectors. The Ministry of Public Health's budget for 1998 was less in real terms than the 1996 budget, and the planned budget for 1999 is going to be even less in real terms. Despite this overall drop, the budget for welfare health services has increased 9 percent, achieved by reducing the budget for other schemes, such as the civil service medical benefits scheme, and significantly cutting capital investments. The ministry also runs a health-card program that provides free medical care to those whose incomes fall below a certain level, as well as a service providing free medical care to the elderly. To monitor the health and health systems implications of the economic crisis, the ministry in April 1998 established an ad hoc Health Intelligence Unit to monitor short- and long-term implications, especially for the marginalized population; develop strategies to alleviate the negative consequences; review allocation of the government budget to essential health services; analyze morbidity and mortality, particularly of vulnerable groups; and monitor prices and availability of health commodities.

South Korea

According to an article in Business in Korea ("Q & A" 1998) that gives a technical appraisal of financial and corporate sector reforms, South Korea will suffer from high and rising unemployment at least in the short run, which in turn may undermine macroeconomic and social stability. Deteriorating social stability will feed back into the reform process as a detriment risk factor, causing a vicious spiral of economic setback and degradation. South Korea is addressing the issue by expanding the social safety net and including a second Tripartite Accord for fair burden sharing simultaneous to the actions on economic reform.

Stemming the sudden expansion of unemployment and restoring the earning power of the unemployed are among the government's top priorities. Pak (1998) reports on some of the steps already taken or to be taken:

A Korea Herald ("Religious Groups" 1998) article reports that sudden unemployment is not only financially but also psychologically disastrous, and that religious groups are taking practical steps to assist the unemployed search for work. Because its current employment policy focuses too much on financial help, the government needs to balance its approach with more psychological help for the jobless, as well. Public libraries such as Seoul City Chongdok Library have opened employment information rooms to provide the jobless with job-searching facilities ("Libraries Providing Job Information" 1998). The jobless visit the libraries on a regular basis, sometimes daily, to seek information and kill time. But as few public libraries are well prepared to help the jobless on a full-scale basis, more substantial steps need to be taken.

Policies and programs have been introduced by the government to assist unemployed workers. These measures vary according to whether the unemployed are job losers or first-time job seekers, and whether the job losers are covered by the Employment Insurance System (EIS).

South Korea has a well-developed network of employment services, which consisted of 1,875 agencies in 1996 (52 national, 285 public, and 1,538 private). Burgeoning unemployment since November 1997 has posed major challenges to the employment services: existing staff are increasingly unable to handle the ever-growing number of clients, and the public employment service, which deals with both placement services and the administration of unemployment benefits, is under increasing pressure to extend its services, especially for guidance and counseling.

The 1998 labor market policy package includes measures to strengthen public employment services; develop a nationwide computerized employment information system; support trade unions to set up their own placement services; and develop manpower banks. The government will set up about 20 additional public employment offices and increase the staff, especially vocational guidance counselors. By the end of 1998, the number of manpower banks is expected to have increased from four to 20.

In the context of growing unemployment and expected large-scale layoffs, the employment services appear to be the weakest component of the current labor market policy program. Although they receive a relatively small portion of the labor market budget allocation, the role of employment services is critical in facilitating and accelerating employment and labor market adjustments. Another major program that has been adopted is job creation for the unemployed. This includes four new schemes. First is a program offering start-up loans to unemployed professionals and managers to set up their own ventures or small firms in an effort to create new jobs. In terms of allocated resources, this is the largest program. Second is a program targeting job creation in existing small and medium-sized enterprises. This program provides loans for job creation and for improving working conditions, with the aim of attracting nationals to replace the foreign workers who currently hold many of the "dirty, difficult, and dangerous" jobs in these enterprises. Third is a program to offer start-up loans to the unemployed covered by the EIS so that they can become self-employed. Fourth is a program to create temporary job opportunities in public works for those long-term unemployed who are outside the scope of the unemployment benefits system. This program is expected to create 50,000 temporary jobs in the public sector.

Training and redeployment policies have also been introduced. South Korea has a well-developed vocational training system, consisting of about 500 public, private (nonprofit), and company-based vocational training institutions. The system trained over 300,000 persons in 1997. The challenge for the country, then, is not to create a greater number of appropriate training facilities but rather to redirect training programs to the new circumstances and to ensure that the training is effective in helping job losers move away from declining sectors to those with emerging opportunities.

To facilitate access of the unemployed to temporary job opportunities, Parliament passed the Act on Dispatched Workers in February 1998. Under the Act, employment agencies may recruit workers and dispatch them to enterprises that require temporary workers with special knowledge or experience, workers to fill temporary vacancies due to illness or maternity leave of the regular work force, or workers to meet irregular production needs. The Act guarantees protection to such workers who are dispatched by employment agencies for temporary jobs. At the same time, the Act provides for the right of company unions or other workers' representatives to be consulted on the use of such temporary dispatched workers in their enterprises.

The World Bank (1998e) reports a US$2 billion SAL it approved in March 1998 that includes a program on labor markets and social safety nets. The program incorporates measures to increase flexibility in the labor market, while extending coverage of unemployment insurance to employees in small-scale enterprises; to improve poverty monitoring and protect poverty-related public expenditures; and to reform the pension system. A second SAL of US$2 billion will help deepen these reforms and start addressing issues in health financing and health care.

The ILO (1998b) reports that the South Korean government originally allocated about 5 trillion won to the labor market budget for 1998. At the end of March 1998, Parliament increased the allocation to 8 trillion won. It was questionable, however, whether the additional resource allocation would actually be available in 1998. Almost 50 percent of the original budget is geared toward unemployment benefits and other income support programs for the unemployed. Job-creation measures account for about 20 percent of the budget, while the remaining 30 percent is divided among training programs, subsidies for enterprises to maintain levels of employment, and support for the development of employment services, the latter being the smallest program and representing only about 3.5 percent of the total budget.

The Korean Confederation of Trade Unions (1997) argues that it is possible to maintain the existing work force if big business cuts expenses other than wages and increases capital through the offering of owners' personal wealth. The problem is that the exposed wealth of the owners is only a fraction of what they actually own. The report adds that chaebols are also prone to pass on the pressure to SMEs who are subcontracted parts makers, and that an enormous disparity exists between workers employed by chaebols and those employed by SMEs. Despite the Employment Stability Act, which dictates that four necessary conditions be met before dismissal can be justified, extralegal redundancy is widespread and considerable numbers of employees are being replaced by irregular employees. The Korean Confederation of Trade Unions argues that in government policy and implementation there is a conspicuous absence of efforts to reform the chaebol-dominated economic structure, or to enhance the educational, medical insurance, and social insurance systems.

The Korea Labour and Society Institute (1998) notes that illegal layoffs, wage arrears, and lack of cooperation from chaebols have all been strongly denounced by the Korean Confederation of Trade Unions but are ongoing problems. The unions also argue that the restructuring plan for big businesses was produced under government pressure and that it is questionable whether the chaebols actually intend to implement it.

Differing Views among Organisations

All interested parties agree on the urgency of the problems, but opinions about what needs to be done and how differ considerably.

The World Bank (1998e) study emphasizes the need to undertake more substantial research in the following areas:

Oxfam (1998a) criticizes IMF and World Bank policy prescriptions and implementation as being flawed and says international response has been inadequate. It points to an artificial separation between social and economic policy, citing the gulf between the macroeconomic policy of the IMF and the social policy framework of the World Bank as the central reason for policy failure. Safety net measures implemented under the World Bank, ADB, and others have only marginal impact and do not offer any prospect of a solution to the crisis. The World Bank is in the hapless position of erecting social safety nets that are collapsing under the weight of rising poverty and mass unemployment resulting from IMF programs.

Oxfam advocates greater attention to human development considerations, with the involvement of civil society and policy discussions as a basis for solutions. It maintains that the protection of social sector budgets, the minimization of unemployment, the maintenance of rural infrastructure, and the monitoring of access to basic services should figure prominently at the outset in the design of macroeconomic targets. It calls for action at several levels in the development of recovery-oriented responses to the crisis.

The ILO (1998a) has stressed that as unemployment figures increase and the crisis overwhelms underdeveloped systems of social protection, it has become urgent for governments in the affected countries to set up systems of unemployment insurance as quickly as possible. The ILO makes the following points:

The ILO proposes that this system of unemployment insurance be self-financed by workers and companies, with both sharing the costs, thereby making the scheme cheap and effective without being a drain on public finances.

An Annotated Bibliography

•AKATIGA. "The Situation Facing Workers During the Crisis." Rapid Appraisal (unpublished).
A short assessment of the impact of the crisis on workers and their family life. Several cases demonstrate that the economic crisis has reduced workers' welfare and weakened their position in Indonesia.
•Ariff, Mohamed, Mohammed Haflah Piei, Diana Wong, and Syarisa Yanti Abubakar. 1998. Responding to the Economic Crisis in Malaysia: A Pro-Human Development Perspective. Malaysian country paper prepared for the United Nations Development Programme/Regional Bureau for Asia and the Pacific, July.
Reviews the origins and nature of the financial crisis in Malaysia, its economic and social impacts, and the attendant policy responses and implications.
•Azis, Iwan J. 1998. "Transition from Financial Crisis to Social Crisis?" In Social Implications of the Asian Financial Crisis. EDAP Joint Policy Studies No. 9, UNDP Regional Project. Seoul: Korea Development Institute.
Elaborates on some repercussions of Indonesia's financial crisis on social variables, with a detailed analysis of the transition of original shocks into employment loss. Models the evolving events since the crisis started in July 1997.
•Baily and Scholtz. 1998. "Economic Crisis: Social Protection" (draft). Geneva: International Labor Organization.
•Ballie, Tamara. 1998. "The Impact of the Economic Crisis on Women in Indonesia." Mimeo. AusAID, Canberra, 31 July.
•Benazon, Keith. n.d. What Happened in East Asia? How Can It Be Understood and What Can Development Organizations Do? Sussex, U.K.: Institute for Development Studies.
http://www.ids.susx.ac.uk/ids/research/kbeas.html (15 October 1998).
Supports the case that there is not enough quality research being done on the social consequences of the crisis.
•Booth, Anne. 1997. "Poverty in Indonesia." SAAT Working Papers. New Delhi: International Labor Organization, SAAT.
•——. 1998. Responding to the Crisis: A Strategy for Indonesia. London: School of Oriental and African Studies, University of London.
•Clarck, John, Bruce Harris, Emmanuel Jimenez, and Caroline M. Robb. 1998. "Socio-Economic Impact of the Financial Impact of the Financial Crisis on the Philippines." Draft Paper. Washington, D.C.: World Bank.
•Commins, Steve, and Alan Whaites. n.d. "Who Will Bail Out the Poor?" World Vision Discussion Paper.
Deals with the impact of the East Asian economic crisis on the poor and the long-term need to view safeguarding of the situation of the poor as part of successful management of economic growth. Also reviews the social impact of the crisis, the ripple effect within the region, the crisis within the rural context, and the effect of the crisis on the situation of women and children.
•"Copycat Fears Over TV Suicide." 1998. South China Morning Post (12 November).
•Dae Il Kim. 1998. "The Social Impact of the Crisis in Korea." In Social Implications of the Asian Financial Crisis. EDAP Joint Policy Studies No. 9, UNDP Regional Project. Seoul: Korea Development Institute.
Reviews the current labor market developments and social issues in South Korea arising from the crisis, and the restructuring programs proposed as a remedy.
•Dhanani Shafig. 1998. Impact of Economic Crisis on School Enrollment. Jakarta.
•Djuhari Wiratakusumah and A. Akhmad Yani. 1998. Dampak krisis moneter pada pengungguran beberapa issues (Impact of monetary crisis on unemployment, some issues). Jakarta: Department of Manpower.
•Eiamlapa-Quinn, Rapin. 1998. "Social Impacts of the Thai Economic Crisis." Development Bulletin, no. 46 (Winter): 39-42.
Analyzes the causes of the crisis in Thailand and the government's responses, followed by an assessment of the social impact.
•Feridhanusetyawan, Tubagus. 1998. "Social Impact of Indonesia's Economic Crisis: Employment, Income and Poverty Issues." Paper presented at a workshop on Impacts of the Asian Economic Crisis, supported by the Ford Foundation. Thailand Development Research Institute, Bangkok, 23-24 November.
•Gardiner, Mayling Oey. 1998. "The Impact of the Financial Crisis on Indonesian Women: Some Survival Strategies." The Indonesian Quarterly 26(2): 79-90.
Explores the various dimensions in which Indonesian women have been affected by the crisis and the types of adjustment they have made. Assesses the impact of the crisis on women in relation to the major roles they play in society: their reproductive or domestic and private role, their productive and public role, and their role in the community. A call is made to address the plight of women as individual human beings, and not just as a mother, wife, or daughter.
•"Government to Overhaul Unemployment Policy." 1998. Korea Herald (28 August 1998).
•Gwin, Catherine. 1997. Development Aid in Transition. ODC paper, April.
http://odc.org/how_gwin.html (20 October 1998).
Does not directly mention the impact of the crisis but contains interesting background material.
•Han Seung-Soo. 1995. Containing the Explosion: The Korean Experience. ODC paper, March.
Relates mainly to economic reforms.
•Hancock, Peter. 1998. "The Impacts of the Asian Crisis and Associated IMF Initiatives upon Rural Women Workers in Indonesia." Development Bulletin, no. 46 (Winter): 27-29.
Describes the suffering of rural women in Indonesia because of the crisis. Before the crisis, the income of rural factory women contributed significantly to their families as well as their communities. Therefore, any government effort to overcome the crisis should take into account employment creation in the rural areas.
•Harris, Bruce, and Caroline M. Robb. 1998. "Social Impacts of the Crisis on Households and Communities: Preliminary Findings in Indonesia." Draft Paper. Washington, D.C.: World Bank.
•Hendytio, Medelina K., and Vidyandika Moeijarto. Forthcoming. "Upaya mengatasi dampak krisis ekonomi mclalui program jaring poengaman sosial: Suatu evaluasi kebijakan" (Lessening the impact of the economic crisis through social safety net programs: A policy evaluation).
Discusses social safety net programs aimed at lessening the social impact of the crisis. Poor targeting and a lack of community participation are the main weaknesses found in the government's social safety net programs. Empowering poor people and maximizing their potentials are one aspect that should be considered in policy interventions toward the poor.
•Hull, Terrence H. 1998. "Indonesia's Family Planning Progams: Swept Aside in the Deluge?" Development Bulletin, no. 46 (Winter): 30-32.
Argues that Indonesia's family planning programs are in trouble, as the economic crisis has dramatically increased the cost of contraceptives and pharmaceuticals. The mobilization of domestic resources must be accompanied by structural and organizational changes to ensure improvement in the quality of care.
•"Hunger Triggers Ecology Crisis." 1998. Straits Times (30 October).
•ICFTU-APRO. 1998. Asian Economic Crisis. Singapore: Trade Union Forum.
High-ranking trade union leaders from East Asian countries highlight the various issues of the economic crises impacting workers and the role of trade unions. Proposes measures and plans that should be taken by governments and international institutions.
•ICFTU/APRO. 1998. "Building Recovery in Asia, Heading Off Global Recession and Preventing Currency Crisis." Statement adopted by the ICFTU/APRO Forum on the Asian Economic Turmoil, Singapore, 10-11 February.
Trade unions play an important role in lessening the impact of the crisis on workers and in the economic recovery. Unless the world supports a major effort to arrest the growth of unemployment and poverty and restart growth, the world economy could slide into serious recession. At the same time, weaknesses in the global governance of international finance and other institutional assistance need to be addressed.
•Illugo, Graeme. 1998. "Some Comments on the Employment Consequences of the Currency Crisis in Indonesia." ILO/UNDP Sectoral Employment Project, Jakarta, February.
•International Labor Organization. 1998a. Asian Labour Market Woes Deepening. International Labor Organization, December.
http://www.ilo.org/public/english/235press/pr/1998/42.htm (27 February 1999).
•——. 1998b. ILO Action on Social Responses to the Financial Crisis in Asia. International Labor Organization, September.
http://www.ilo.org/public/english/270asie/news/crisis.htm (19 October 1998).
A short article by the Regional Department for Asia and the Pacific Division of the ILO, referring to several other articles on social responses that may be of interest.
•——. 1998c. The Social Impact of the Asian Financial Crisis. Technical report discussed at the High-Level Tripartite Meeting on Social Responses to the Financial Crisis in East and South East Asian Countries, Bangkok, 22-24 April.
http://www.ilo.org/public/english/60empfor/cdart/bangkok/index.htm (19 October 1998).
Examines the social impact of the crisis in the three most severely affected countries—Indonesia, South Korea, and Thailand. The focus of discussion is on employment, the social fabric, and vulnerable groups in society. Also suggests priority areas for policy and institutional reform that need to be addressed immediately in order to overcome the problem.
•International Labor Organization/United Nations Development Programme. 1998. Employment Challenges of the Indonesian Economic Crisis. Jakarta.
Assesses the structural changes in employment and income prospects as a result of the economic crisis and proposes short- and long-term strategies for income generation and poverty alleviation.
•"Indonesia Faces Threat of �Lost Generation.'" 1998. Straits Times (16 October).
•International Monetary Fund. 1998. Social Dimensions of the IMF's Policy Dialogue. External Relations Department, International Monetary Fund.
http://imf.org/external/pubs/ft/pam/pam47/pam47.con.htm (20 October 1998).
A short article outlining the need for social safety nets in response to the crisis. Mentions IMF-supported adjustment programs.
•"Job Insurance: Its Time Has Come." 1998. Business Times (7 December).
•Jomo, K. S. and Diana Wong. 1998. "Social Consequences of Malaysia's Financial Crisis: Some Preliminary Findings." Paper presented at a workshop on Impacts of the Asian Economic Crisis, supported by the Ford Foundation. Thailand Development Research Institute, Bangkok, 23-24 November.
•Kemp, Neil. 1998. "Indonesian Economic Crisis: Impact on Education Provision." Paper prepared for DFID's seminar on Implications of the East Asian Crisis for Poverty Elimination, 15 July.
Hypothesizes that the biggest impact will be felt, both in terms of quality of educational provision and enrollment, by poor communities in urban and semiurban areas.
•Kittiprapas, Sauwalak, and Chedtha Intaravitak. 1998. "Impacts of the Asian Economic Crisis: Case of Thailand." Paper presented at a workshop on Impacts of the Asian Economic Crisis, Thailand Development Research Institute, Bangkok, 23-24 November.
•Korean Confederation of Trade Unions. 1997. Employment Situation Imperatives in Korea. Seoul: Korean Confederation of Trade Unions.
•Korean Labor and Society Institute. 1998. Labor on the Second Tripartite Commission. Seoul: Korean Labor and Society Institute.
•Kuankachorn, Srisuwan. 1998. "The Roots of the Thai Crisis: A Failure of Development." Development Bulletin, no. 46 (Winter): 36-38.
Describes the causes of Thailand's economic crisis and its impact. Assesses the development model of Thailand, which focused on rapid growth, large-scale development, and a total dependence on foreign capital. Considers the failure of the model as the main cause of the crisis.
•"Libraries Providing Job Information Growing Popular among Unemployed." 1998. Korea Herald (20 March).
•"The Lost Generation." 1998. Straits Times (20 November).
•Mamu, Richard. 1998. Economic Crisis in Indonesia: The Full Story. Gateway Books.
•Manning, Chris. 1998. Indonesia's Economic Crisis: Notes on Employment Strategies. Canberra: Australian National University.
•Manuelyan Atinc, Tamar and Michael Walton. 1998. Social Consequences of the East Asian Financial Crisis. Mimeo. Washington, D.C.:
Provides the World Bank's view on the linkages between the financial crisis and social crisis. Suggests four domains where a combination of immediate action and exploration of alternatives is central—distributional effects, direct public action, the consequences for the social fabric, and monitoring evaluation for every policy/program.
•Marshall, Katherine. 1998. "Social Dimensions of the East Asia Crisis—Some Reflections Based on Experience from the Adjustment Eras in Africa and Latin America." Paper prepared for the IDS East Asia Crisis Workshop, 13-14 July.
http://www.ids.susx.ac.uk/ids/research/marshall.pdf (15 October 1998).
Argues that although there is more data available than there was in any other previous crisis, such as in Africa and Latin America, much is not reliable. Stresses that the collection of reliable information is an area for urgent action.
•McBeth, John. 1998a. "Agriculture Returns to Roots." Far Eastern Economic Review (4 June).
Argues that over the past decade, Indonesian agriculture has been in steady decline, a situation that became worse when the economic crisis hit the country. The severe drought, economic crisis, and political turmoil have exposed fundamental flaws in the country's strategy for agriculture. However, the decline in agricultural products is mainly caused by government policy that ignores farming in favor of export-oriented manufacturing and costly high-tech experiments. Notes that a complete retooling of agriculture policy is needed to help revive economic activity.
•——. 1998b. "Crisis, What Crisis?" Far Eastern Economic Review (3 December). Internet edition.
Argues that despite Indonesia's slump, many of its farmers have been enjoying a boom, though for some it may now be fading. Spotlights the rural upturn in Sumatra and South Sulawesi.
•McCawley, Peter. 1998. "Human Dimensions of Indonesia's Economic Crisis and Foreign Assistance." Paper presented at the Conference on Recent Development in Indonesia, University of Queensland, Brisbane, 14 October.
Analyzes the underlying factors that caused the crisis in Indonesia and suggests policy measures to encourage economic growth across the region.
•Misra Satish. 1998. Towards Understanding the Asian Economic Crisis: Notes on the Economic and Social Dimensions of Economic Adjustment in Indonesia. Jakarta: United Nations Development Programme.
Argues that recovery in Asia should include both economic growth and an equity component.
•Moore, Mick. 1998. "Social Impact of the Asian Crisis: Some Issues and Questions." Paper presented at the IDS East Asian Crisis Conference, 13-15 July.
Discusses a range of dimensions of the social impact of the crisis, including the effects on the living standards of the poor, the level of public expenditure directed at the poor, and the nature and quality of social relations within poor households and communities.
•National Economic Action Council, Prime Minister's Department. 1998. National Economic Recovery Plan. Kuala Lumpur: Government of Malaysia.
Norriel, C. Carmelo. 1998. "Indonesia: Economic Crisis and Industrial Relations." February. Geneva: LEG/REL, ILO.
•Oxfam International. 1998a. East Asian "Recovery" Leaves the Poor Sinking. Oxfam International Briefing, October.
http://www.cca.org.au/oxfam/advocacy/eastasiabriefing.html (14 October 1998).
Focuses on the human dimensions of the crisis, with special emphasis on Indonesia, and on the absence of adequate social safety net measures. Suggests a framework for achieving recovery and poverty reduction.
•——. 1998b. The Real Crisis in East Asia. Oxfam International Briefing, April.
http://www.cca.org.au/pr/1998/equity.html (14 October 1998).
Argues that poverty should be at the center of policy discussions over responses to the crisis in Asia.
•Pak Po-Hi. 1998. "Responding to the Economic Crisis in the Republic of Korea." Working paper prepared for the United Nations Development Programme, May.
Reviews the socioeconomic context of South Korea's financial crisis, and examines its origins and nature and its impact on the country's economy and social situation. Discusses government policies and measures and the actions of the nongovernment sector (the private sector/civil society) in response to the crisis.
•Pasadilla, Gloria O. 1998. "Social Impact of the Asian Crisis in the Philippines." Paper presented at a workshop on Impacts of the Asian Economic Crisis, supported by the Ford Foundation. Thailand Development Research Institute, Bangkok, 23-24 November.
"Q & A: Korea's Economy Reinvented." 1998. Business in Korea.
•Quinn, Rapin Elamlapa. 1998. "Social Impacts of the Thai Economic Crisis." Development Bulletin, no. 46 (Winter): 39-42.
Analyzes the cause of, impacts of, and the government's responses to the crisis. A number of social issues have been raised in Thailand owing to the bad impact of the economic crisis. These include demand for tax reform, land reform, sociopolitical reform, caring for the marginalized, and maintaining good governance.
•Rahardjo, Yulfita, Friedhelm Betke, et al., eds. 1998. Dampak krisis moneter dan bencana El Nino terhadap musyarakat, keluarga, ibu dan anak di Indonesia (The impact of monetary crisis and El Niño on society, family, women and children in Indonesia). Jakarta: LIPI.
Focuses on various social dimensions and consequences on the Indonesian people of the multiple crises.
•Ranis, Gustav, and Francis Stewart. 1998. "The Asian Crisis and Human Development." Paper prepared for the IDS East Asia Crisis Workshop, 13-14 July.
http://www.ids.susx.ac.uk/ids/research/stewart.pdf (15 October 1998).
Contains an interesting section on the impact of the crisis and suggestions for how it should be handled. Also comments on the role of international institutions, pointing out that Japan should play a greater role with other countries in the region, and the concept of the creation of an Asian Fund.
•Ravalliou, Manson. 1998. "Appraising Workfare Programs." Washington, D.C.: World Bank, Development Research Group.
•"Religious Groups Open Shelters for Jobless." 1998. Korea Herald (10 March).
•Rizwanul, Islam. 1998. "Indonesia: Economic Crisis, Adjustment, Employment and Poverty." Discussion Paper No. 23. Geneva: International Labor Organization.
Provides a broad outline of possible emergency employment creation and safety net programs for those who are adversely affected by the current economic crisis. Presents an outline of a two-pronged program of emergency employment creation and safety nets for the poor.
•Robb, Caroline M. 1998. "Social Aspects of the East Asian Financial Crisis: Perceptions of Poor Communities." Paper prepared for the IDS East Asia Crisis Workshop, 13-14 July.
http://www.ids.susx.ac.uk/ids/research/robb.pdf (15 October 1998).
A concise overview of social problems that have emerged since the crisis, based on an analysis of social conditions undertaken in Thailand, Indonesia, the Philippines, and Cambodia from January to April 1998.
•Robb, Caroline M., and Chaohua Zhang. 1998. "Social Aspects of the Crisis: Perceptions of Poor Communities in Thailand." Informal Sector Strategy Paper. Washington, D.C.: World Bank.
•Robb, Caroline M., Shivakisma and Nil Vanna. 1998. "The Social Impacts of the Creeping Crisis in Cambodia: Perceptions of Poor Communities." Draft paper. Washington, D.C.: World Bank.
•Sangwon Suh. 1998. "Is a Time Bomb Ticking?" Asiaweek (6 February): 24-25.
A cover story outlining the frustrations of the unemployed and the displaced in Indonesia that could boil over, with drastic consequences.
•Sewell, John. 1998. The Changing Definition of Development and Development Cooperation. ODC paper, June.
http://odc.tidewater.html (20 October 1998).
Short overview of the changing nature of ODA.
•Siamwalla, Ammar, and Orapin Sophchokchai. 1998. "Responding to the Thai Economic Crisis." In Social Implications of the Asian Financial Crisis. EDAP Joint Policy Studies No. 9, UNDP Regional Project. Seoul: Korea Development Institute.
A comprehensive overview of the Thai economic crisis, from its origins to its economic and social impact, as well as policy responses by the Thai government and extragovernmental organizations.
•Soesastro, Hadi. 1998. "The Social Impact of the Economic Crisis in Indonesia." Development Bulletin, no. 46 (Winter): 24-26.
Identifies the social impacts of the economic crisis in Indonesia and the steps that need to be taken to eliminate the problems.
•"S. Korea's Sept. Jobless Rate Eases to 7.3%." 1998. Business Times (26 October).
•Sutherland, Peter D. 1998a. Answering Globalisation's Challenges. ODC paper, October.
http://odc.org/pdsview.html (20 October 1998).
Short article on globalization in general, mentioning the current crisis but also looking at future trends.
•——. 1998b. The 1998 Peter Jacobson Lecture: Managing the International Economy in the Age of Globalisation. ODC paper, October.
Mainly speaks of economic and financial reform, but with some reference to governance. Useful background material.
•Tambunlertchai, Somsak. 1998. "The Social Impact of the Financial Crisis in Thailand and Policy Responses." In Social Implications of the Asian Financial Crisis. EDAP Joint Policy Studies No. 9, UNDP Regional Project. Seoul: Korea Development Institute.
A study of the impact of the financial crisis in Thailand, and the policy responses of the government to tackle the crisis and alleviate the social impact.
•"Thailand's Street Children on the Rise." 1998. Straits Times (31 October).
•"Thai Students Drop Out of School." 1998. Straits Times (27 October).
•United Nations Development Program. 1998. Consumption Patterns and Their Implications for Human Development. Human Development Report.
http://undp.org/hdro/98.htm (20 October 1998).
Not directly responding to the Asian crisis, but a comprehensive look at the security problem.
•United Nations ESCAP. 1998. Asia and the Pacific into the 21st Century: Prospects for Social Development. Theme Study of the 54th Session of ESCAP, 20-28 April.
http://unescap/org/theme/index.htm (20 October 1998).
A substantive paper, good for background reading, but does not directly address the immediate impact of the financial crisis. Examines development trends and emerging issues with impacts on social developments, including demographic, economic, social, environmental, scientific, and technological trends, and makes suggestions for future prospects without mentioning the crisis overtly.
•United Nations FAO. 1998. Latest Report on Foodcrop Shortages Shows 30 Countries in Need of Emergency Assistance. September.
http://www.fao.org/NEWS/GLOBAL/GW9832-e.htm (15 October 1998).
Short country profiles and estimated 1998-1999 cereal import requirements of low-income food-deficit countries.
•Van Diermen, Peter. 1998. "The Social Impact of Indonesia's Financial Crisis." Development Bulletin, no. 46 (Winter): 21-23.
Focuses on the impact of the crisis on the Indonesian family. The compounded problems caused by the crises, such as unemployment, inflation, and political instability, have brought about severe impacts on the Indonesian family. To overcome the problem and improve families' welfare, Indonesia needs to sort out its financial system, attract capital, and provide a stable government and regulatory system.
•Vatikiotis, Michael. 1998. "Power to the People." Far Eastern Economic Review (9 July).
•Warr, Peter. 1998. "The Economic Crisis and the Poor: Thailand." Development Bulletin, no. 46 (Winter): 33-35.
Demonstrates the correlation between economic growth and poverty reduction. The rate of aggregate growth is an important determinant of the rate at which absolute poverty declines, even in the short run. Faster growth has been associated with faster reductions in absolute poverty.
•World Bank. 1998a. Addressing the Social Impact of the Crisis in Indonesia: A Background Note for the 1998 CGI.
After reviewing the facts of the interrelated crises, addresses three broad areas of actions: maintaining the viability and affordability of key commodities important to the poor, generating employment and maintaining incomes, and preserving key social services. Discusses the magnitude of the problem, the responses, and issues of implementation.
•——. 1998b. East Asia: The Road to Recovery. World Bank Group, September.
http://www.worldbank.org/html/extpb/rdorec/rtor.pdf (13 October 1998).
Analyzes the event that led to the crisis, the effects, and the prospects for growth in the region. Centers chiefly on the economics of the problem, but contains a section on social problems caused by the crisis.
•——. 1998c. Indonesia in Crisis: Macro Economic Update. Mimeo. Washington, D.C.
Describes the Indonesian economic crisis from the macroeconomic point of view and suggests ways toward a recovery. Suggests a five-point agenda of action for the near term, requiring a concentrated focus of government policy. These include protecting the poor, obtaining foreign financial assistance, dealing with the debt overhang, resuscitating the banking system, and improving good governance.
•——. 1998d. Responding to the Crisis: Backing East Asia's Social and Financial Reforms. World Bank Group, June.
A short article, primarily on how the World Bank is responding to the crisis. Outlines the main social consequences and points out key indicators to watch. However, main point is restoring confidence to the financial markets as a precursor to solving the social problems.
•——. 1998e. Social Consequences of the East Asian Financial Crisis, September.
http://www.org/poverty/eacrisis/partners/library/socconq/index.htm (13 October 1998).
A comprehensive paper that includes chapters on the effects of the social problems on households and the future impacts of the crisis on poverty. At least half the paper is devoted to what can be done about the problems, covering the themes of food, employment, and income security, in addition to social services for the poor. Recommends regular surveys and assessments to collect raw data, as well as vigilant monitoring and evaluation of public action.
•World Health Organization. 1998. Health Implications of the Economic Crisis in the South-East Asia Region: Report of a Regional Consultation. Bangkok, 23-25 March.
Contains a useful section on the health effects of the economic crisis in Thailand and Indonesia, as well as the managerial measures that have been taken or are being planned by the respective countries to address the crisis.

Table of Contents

Social Effects of the Crisis

Policy Measures and Actions

Annotated Bibiliography