Korea's proposed worker layoff plan is likely to unleash unrest
Seoul, Jan 20: A South Korean committee grouping labour, government and industry is likely to reach an accord covering worker layoffs and other issues on Tuesday, a panel member representing labour said.A working-level team had started drawing up a draft resolution which was expected to be adopted by a full meeting of the body due to begin at 4 pm (0700 GMT), said the official, who did not want to be identified. "As far as I know, the members of the committee have agreed in principle to adopt a resolution on Wednesday after watering down the way layoffs are described," the official said. On Monday the committee failed to reach an agreement afterlabour representatives strongly opposed including the word "layoffs" in the resolution. The committee was formed last week to find common ground on the massive economic restructuring required as part of South Korea's bailout led by the International Monetary Fund (IMF). The prospect of large-scale job losses is seen as one ofthe most damaging political
side-effects of the IMF-prescribed medicine. In return for a record $58.35 billion bailout, the IMF recommended that South Korea sharply cut its economic growth, slash fiscal spending and tighten up monetary controls, steps expected to lead to a massive increase in unemployment. Labour groups have instead that the government and big firms do more to ease the pain of restructuring, for instance by ensuring that an unemployment safety net is provided and workers laid off are reemployed once the economic situation improves. "As far as I know, the members of the committee have agreed in principle to adopt a resolution on Tuesday after watering down the way layoffs are described," the official said. On Monday the committee failed to reach an agreement after labour representatives strongly opposed including the word "layoffs" in the resolution. The committee was formed last week to find common ground on the massive economic restructuring required as part of South Korea's bailout led by the International
Monetary Fund (IMF). The prospect of large-scale job losses is seen as one of the most unpalatable political side-effects of the IMF-prescribed medicine. Meanwhile, South Korea will freeze some public utility charges until the end of June and strengthen inspections to stabilise consumer prices, the finance ministry said on Tuesday. The ministry said in a statement released after a meeting of economy-related ministers that consumer prices were expected to increase rapidly early this year before stabilising later on. The Presidential Blue House said in a separate statement that prices could rise by 30 per cent in the year, if nothing was done to check the present trends. The finance ministry said last year's sharp depreciation of the local won currency against the US dollar would be a big factor leading to higher prices in the first quarter. But it did not give projections. Despite the expected sharp price rises in the early part of this year, the government aims to keep consumer inflation for the entire yearat nine percent, the statement said. South Korea has agreed with the IMF to cap this year's consumer price index growth at or below 9 per cent versus last year's growth of 4.5 per cent. The agreement was part of the terms attached to the record-breaking $58.35 billion IMF-led bailout package. The ministry statement reaffirmed that the government wouldtighten liquidity controls and contain, as much as possible, any increases in public utility charges.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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