Unions threaten strikes in South Korea

From The Times

June 17, 2008

Leo Lewis, Asia Business Correspondent

The South Korean economy could grind to a halt this week amid calls for a series of crippling “domino strikes” aimed at closing down the country's biggest industries.

With hundreds of thousands of Koreans taking to the streets nightly to protest against proposed imports of American beef, President Lee's fledgeling Government faces its greatest threat - industrial action that could annihilate his reputation as the business-friendly “chief executive of South Korea” and could cost the fragile economy billions of dollars.

What began as small public demonstrations against Mr Lee's plans to restart beef imports from the United States - they were banned in 2003 after a BSE scare - have become an expression of deeper anger with the new President and his authoritarian style.

Mr Lee was voted in with promises to reform South Korea's troubled economy, but, despite a landslide election victory last December, his privatisation and pension reform plans have aroused the fury of the country's still-potent left wing. Increasingly vocal calls for his resignation betray fears that Mr Lee may be lining himself up as the “Thatcher of Korea”.

Rising calls for a general strike were strengthened yesterday as thousands of building sites across South Korea were silenced by striking cement lorry drivers. The Korean Confederation of Trade Unions (KCTU) is calling for similar action by 600,000 of its members.

Lee Seok Haeng, the president of the KCTU, said: “We will walk out like the baseball batting order goes, the first batter is the Korea Cargo Transport Workers' Union, the second batter is the constructors' and machinery workers, followed by the metal workers and the railway workers.” About 13,000 haulage drivers have staged three days of strikes. Their actions have stymied production at big electronics factories and steelworks and yesterday slowed down trade at the vast commercial port of Busan to a fraction of its usual rate. In addition, around 17,000 unionised construction workers went on strike yesterday. Losses suffered by the export-led economy over the past few days are calculated by analysts at the Korea International Trade Association to be about $500 million (£255 million).

The lorry drivers' principal complaint is that they bear the burden of higher fuel prices and a system of commission charges in a cut-throat cargo contract market. They say that their strikes will not end until the Government steps in to lower fuel costs and persuades employers to raise wages.

Whether Mr Lee can meet their demands is another question. He told a meeting of Asian and European finance ministers: “It is not too much to say the world economies are facing the worst crisis since the oil shock of the 1970s.”