East asian labour market regimes in the context of global economic crisis

The global economic crisis caused by an improperly regulated financial sector giving way to excessive risk-taking behaviour has led to a worldwide crises, and widespread slow down and loss of jobs. The situation in East Asia is somewhat different from that in the western world in that finance bubbles had already been burst in the 1997 crisis and lessons learned from that. Nevertheless, developing East Asia is still dependent on western markets as destinations for exports as domestic markets remain insufficiently developed to absorb production of goods and services. In this situation, states such as Thailand, Vietnam and Cambodia look to examples from elsewhere in the region concerning the means of transforming themselves from being part of the factory age, which limits growth at the upward end of the middle income range, into the higher income range of economies. Examples include the Republic of Korea, Taiwan, Singapore and even to some extent Malaysia. This raises the question of the extent to which the examples of those other states, in which labour market management has passed further along a familiar trajectory, offer practical examples that can be applied in the developing states that follow behind them. Issues of relevance in this case include wage and compensation issues, management of unions and the freedom of speech, association and collective bargaining, as well as the interaction between the education system and the labour market.

The paper employs a critical-analytical approach based on a mixture of secondary data sources introduced into a framework for analysis.

It is found that significant differences exist between the various states concerned according to the analytical framework, which incorporates geographical and historical factors, including the role of the actors involved in the Cold War, as well as the diffusion of technology, the availability of capital for investment and other institutional factors. There are also important similarities to be noted.

The analysis is conducted at a macro-level and more variations might be found iffactors and data were to be disaggregated to the industry level or even further.

The analysis provides useful information for understanding the nature of investment regimes in the countries studied and the nature and structure of their labour markets.

Labour is often the overlooked factor when it comes not just to investment decisions (when aggregate costs are dominant) but also in economic and social development both from low to middle income and from middle to upper income levels.